MIDDLE EAST

QUESTIONS:

1) What is Islamic Banking and its backround.

Islamic bankink was born from the religion, religion has beeen always been the most important in the Middle East. It was norn after taking into consideration that normal banks win excess in interests and this religion doesnt support excess. This was how free interest banks were created, thanks to muslim countries. These banks base their accomplishment on the principles opf the Shariah and the aplications on the Islamic economics.

2) What are the key principles of Islamic Banking?

• lending money but without any interest or additional profit.



• lender must share profits and losses, in order to promote high risk negotiations.



• negotiations shoulbe free from uncertainty or risk, both parts should know correctly every detail.



• stop from helping any business which participates agaisnt the religion, like pork and alcohol.

3) How do these type of banks make profit if they dont ask for interests or profit?

These type of banks make money by buying and selling certain products that are permitted by the religion. The principal part of the negotiation is trade, and all types of trade include risk which is covered by the bank and shared with the costumer. The thing is all about sharing the risks between the bank and the costumer. They are qualifyed to capture a differentiated status with the stakeholders, capital and clients in order to share profits in a good way.

4)Explain the concept of ethical investment under Islamic law, who determines weather an activity is allowed or not?

This ethical concept sustains that all activities are done to help the environment and respecting the code of equity and fairness of profit. This banks benefit socially, because they give people opportunities they didnt had. They give incentives to companies that show social responsability. The Shariah is what allows or prohibits their activities because they are formed by it.

5)How does Islamic banking influence the economy in the middle east?

This banking method stimulates the culture because it creates bonds of partnership. Also because the idea of sharing profits and risks seems pretty attractive. The interesting social part is that they give opportunity to people who cant afford it thanks to its easy access.

6)Based on the resaearch and knowledge of this topic, what is the future of Islamic banking in terms of global expansion and growth?

This seems like a positive future for Islamic banking due to the opportunity it represents and its principal rules of equity and fairness. Due to this type of activities it would be good for other non-Islamic countries to addopt the idea because it would bring growth and development that to the big economic participation of the most needed.

REFERENCES:

• Image taken from: http://http://yahyasheikho786.files.wordpress.com/2009/09/2004-12-18-2004-12-18-islamic_bank.jpg
• http://http://www.islamic-banking.com/what_is_ibanking.aspx
• http://http://www.witness-pioneer.org/vil/Articles/economics/principles_of_islamic_banking.htm
• http://http://www.guardian.co.uk/money/2006/jun/13/accounts.islamicfinance
• http://4) http://www.witness-pioneer.org/vil/Articles/economics/role_of_government_in_islamic_economy.htm