Advantages Of Islamic Banking

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institutions and councils were formed by government to promote Islamic banking parallel to conventional banking. In 2001 in order to develop Islamic commercial bank in private sector and stand alone branches by existing banks to conduct Islamic banking in country state bank of Pakistan gives criteria. Al Meezan investment bank fully convert itself as Islamic commercial bank by acquiring Pakistan operations of society general. After gaining first license for Islamic bank Al meezan renamed itself as Meezan bank in 2002. After that in 2004 state Bank Pakistan develop separate Islamic banking department by merging its two division’s i.e. Islamic economics division of the research department with the Islamic Banking division of the banking policy…show more content…
Islamic banks administer stores (as Mudarib or venture administrator). Benefit or loss is shared amongst investor and the clients as indicated by a concurred proportion. It is found that clients are quickly moving from traditional banks to Islamic banks because of developing trust in the Islamic banking policies and practices. There are diverse sorts of clients (people, family units, corporate bodies, money related foundations and in addition government and private associations) that are enthusiastic to participate in long term associations with the Islamic banks (SBP,…show more content…
Islamic banks are effectively rivaling the traditional banks by catching a sensible offer of the business sector. Islamic banks gains huge development inside a most limited conceivable time. Also resources, deposits, financing and clients’ increases at very high rate in couple of years. Financing items offered by Islamic banks got to be prevalent among individuals because of adaptable terms and conditions. The amazing development of Islamic banks can be connected with the presentation of new financing items as indicated by standards of Shari’ah instead of Riba-based financing items offered by ordinary banks. It is accounted for that administration quality impression of Islamic banks is more prominent than ordinary bank in Pakistan because of popularity of IB items. It is said that Murabaha and Ijarah financing are extremely prominent among individuals. In any case, Mudaraba is a minimum favored alternative with 0% weight-age. It might be because of absence of strong financial environment. Expanding commitment of diminishing Musharika demonstrates the banks' carefulness to differentiate their portfolio by drawing in a greatest number of clients (SBP, 2007). Islamic banks are new contestants in the Pakistani saving money segment. A substantial number of individuals still unaware regarding the working system of Islamic banks. Banks make overwhelming offerings to draw in the clients and they ought to likewise address the particular needs

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