Islamic Financing and Its Impliaction for Pakistan
Introduction
Islam is a religion not only in the ordinary sense of the world, but also a complete code and system of life for any individual living in this world. While other religious preaching and practices provide general guidance only for the relationship between man and his Creator, Islamic teachings and methods guides man in his relations with ALLAH the Almighty and provide and guide them the norms which govern human beings temporary existence in this world.
Islam take into account an individual's political, social economic, moral and all other consequential aspects.Every society has its own social & economic system. Islam being a complete code of life as well as comprehensive and distinct social system, possesses a corresponding social & economic system of its own. Islamic economics system is fast developing into a different and distinct part of economics . Large number of Islamic financial & banking institutions have been apparent in various Muslim as well as in some non-Muslim countries around the world.
Islamic financing is an exception that has taken many spectators and viewers by surprise. Islamic Finance and banking is mainly refers to financing or banking activity that is dependable and homogeneous with the principles of Islamic law (Sharia) and its practical implementation through the progression and development of Islamic economic system. In Shariah Law term interest is denoted as Riba. Interest payment is prohibited in Islam. The main purpose or Objective of Islamic Banking and finance is to make positive contribution to the fulfillment of Socio-economic objectives of the society as a whole.
The flaw of the currently operative interest-based system in most countries of the world is that it create a strong justification for introducing of a new system for the international economy. In comparison to this Islamic banking and finance, which tries to introduce the principle of risk/reward-sharing higher the risk greater
Islam is a religion not only in the ordinary sense of the world, but also a complete code and system of life for any individual living in this world. While other religious preaching and practices provide general guidance only for the relationship between man and his Creator, Islamic teachings and methods guides man in his relations with ALLAH the Almighty and provide and guide them the norms which govern human beings temporary existence in this world.
Islam take into account an individual's political, social economic, moral and all other consequential aspects.Every society has its own social & economic system. Islam being a complete code of life as well as comprehensive and distinct social system, possesses a corresponding social & economic system of its own. Islamic economics system is fast developing into a different and distinct part of economics . Large number of Islamic financial & banking institutions have been apparent in various Muslim as well as in some non-Muslim countries around the world.
Islamic financing is an exception that has taken many spectators and viewers by surprise. Islamic Finance and banking is mainly refers to financing or banking activity that is dependable and homogeneous with the principles of Islamic law (Sharia) and its practical implementation through the progression and development of Islamic economic system. In Shariah Law term interest is denoted as Riba. Interest payment is prohibited in Islam. The main purpose or Objective of Islamic Banking and finance is to make positive contribution to the fulfillment of Socio-economic objectives of the society as a whole.
The flaw of the currently operative interest-based system in most countries of the world is that it create a strong justification for introducing of a new system for the international economy. In comparison to this Islamic banking and finance, which tries to introduce the principle of risk/reward-sharing higher the risk greater