Fundamentals Of Islamic Banking & Finance: Fill & Download for Free

Islamic banking means providing loans without charging any interest.RBI wants it so that it can boost the Indian economy because interest free loans will become affordable for majority of population in India which is mostly middle class.In some developed countries there is no interest for home loans,so RBI wants to try this method in India.Here's some stuff compiled from various sources -What is Islamic banking?Islamic banking is a banking system in accordance with the Shariat. In Islam, money has no intrinsic value – money, therefore, cannot be sold at a profit and is permitted to be used as per shariat only. The Islamic Law or Shariat prohibits paying any fee for renting of money (called riba) for specific periods of time. It also prohibits any sort of investment in businesses that are considered haraam or against the principles of Islam. It is largely believed that these principles have been derived from the Quran and have been in practice since then.How did modern Islamic banking evolve?The first successful example of an Islamic Bank was perhaps a financial institution called Tabung Haji in Malaysia which originally came into being due to high demand of interest-free money for pilgrimage (Hajj) since this was not possible by way of conventional banking system. Thus, in 1963 Tabung Haji came into being with a total of 1,281 depositors which increased to 8,67,220 depositors and with deposits over one billion Malaysian dollars. This paved the way for creation of more Islamic banks especially in Egypt where small scale Islamic Banks existed in the 1960s, catering primarily to the rural areas. The success of these banks led to the formation of the Naseer Social Bank in Cairo in the year 1972. In the same decade an International Islamic Bank for Trade and Development was proposed, which led to the creation of Islamic Development Bank with a view to promote economic development of the Muslim community in accordance with the Shariat laws.How can banks function without taking interest?Islamic Banks work on the principles of an interest free banking. Riba or interest under Islamic Law basically means anything in “excess” – the investor should not make an “undue” profit from the hard work of the other. But it is permitted to follow a system of reasonable profit and return from investment where the investor takes a risk that is well calculated. Thus, Islamic banks make available accounts which provide profit or loss instead of interest rates. The banks use this money collected by them and invest in something that isshariat compliant, that is not haraam and does not involve high risks. Thus, businesses involving alcohol, drugs, war weapons etc. as well as all other high risk and speculative activities are prohibited. Islamic Banking, therefore, acts as an agent by collecting the money on behalf of its customers, investing them inshariat compliant projects and sharing the profits or losses with them. The Dow Jones Islamic Market Index came into being in the year 1999 for investors willing to invest in shariat compliant projects.There are various products in Islamic Banking that cover the needs and requirements of the consumers. Some of them are Mudarbah (profit sharing – one party provides finances, the other provides expertise), Musharaka (joint venture – both parties share everything equally), Murabaha (cost plus profit), Ijara(letting on lease), Istisna amongst others.Really? Banking without interest? Come on.The concept of Islamic banking has often been criticised by both purists as well as modern conventional bankers. It is stated that the instruments in Islamic banking are essentially the same as the ones in traditional banking and have the same purpose with merely different terminology. It is often stated that in today’s time of profit maximisation there is a thin line between riba and profit. The modern Islamic Banks have found ways to work around the conventional instruments and include them in Islamic banking instruments. One such example is an instrument calledmudarabah, which is essentially nothing else but a mortgage and the banker ends up earning an interest in the form of mortgage interest rate on it. There are arguments that Islamic Banking was based on high ethical principles which no longer remain the same. AWorld Bank paper states that conventional and Islamic banking methods are very similar to each other. Another criticism is that the Islamic bankers find their way around the system and “manage” to get ashariatcompliance certificate from a scholar to invest in.However, Islamic banking across the globe is at a comparatively nascent stage and there are plenty of interpretations given by scholars worldwide with regard to various Islamic finance instruments. One cannot completely stick to the purist approach, as the Islamic finance system is centuries old and the modern Islamic Banking system is a recent evolution. The Islamic finance system has to evolve with time without violating the fundamentals of Islamic Finance system as per theshariat.India isn’t an Islamic country. So why have Islamic banking here?While Islamic Banking is prevalent and is common in Islamic countries, there are plenty of non-Islamic countries that are now opening Islamic “windows” in conventional banks. These are departments within the banks and they offer shariat compliant products to the customers. China, United Kingdom, United States, Germany are some of the countries that offer Islamic windows.The US has the American Finance House LARIBA which is a riba free and shariat complaint financial institution that is involved in auto, business, trade financing, hedge fund investing etc.The United Kingdom was the first non-Islamic country to permit a complete shariat compliant bank called the Islamic Bank of Britain to operate. In fact, UK was the first Non-Islamic country to have introduced Islamic Bonds known as sukuk in the year 2014.So how does India benefit from Islamic banking?Introduction of Islamic Banking was mooted by Raghuram Rajan in his report on the Financial Sector in the year 2008 where he recommended that interest-free banking techniques should be operated on a larger scale so as to give access to those who are unable to access banking services, including those belong to economically disadvantaged section of the society.There are many advantages in introducing an Islamic window in the banks. For instance, majority of companies in the Stock Exchange are shariat compliant (this number is more than the shariat complaint companies on the Stock Exchange in Malaysia), thus this would result in attracting huge funds in the domestic market alone.An Islamic Banking window will encourage many from the Muslim community to come forward and invest in projects thereby mobilising huge amount of capital which they may not be willing to put in the banks. This also means that India will be able to attract huge investments from West Asia and from those who invest only in shariat compliant projects.However, the Indian banking laws will have to be amended so as to incorporate the provisions relating to Islamic banking. For example, the Banking Regulation Act requires payment of interest which is against the principles of Islamic Banking. The Act also specifies “banking” to mean accepting deposits of money from public for lending or investment, thus excluding within its ambit the instruments of Islamic banking that promote profit and loss.The recent proposal of RBI for opening of an Islamic Banking window has received mixed reactions from many especially in the light of the recent Uniform Civil Code debate and is likely to take a political angle instead of a financial one.It is pertinent to highlight that investing in shariatcompliant projects though Islamic Banking windows is something that is mandatory in nature for Muslims, unlike personal laws. For everyone, it will just be an additional financial investment opportunity. It is important to remember that using banking services of one kind need not interfere with the use of another.

This man needs no Introduction.But still if you don’t know him let me tell you he is Shah Rukh Khan a bollywood megastar who is a Muslim and married to a Hindu. He considers himself to be a strong believer of Islam while he respects every religion and also Indulges into Hindu festivals with his wife.Recently he posted a picture of his son Abram who was seen to be worshiping Lord Ganesha.He was heavily trolled by Muslim bigots who said that it is HARAM [prohibited] in Islam.1. So the first message that i want to give to Indian Muslims is that hailing any Hindu deity or deity of any other religion is not wrong because they teach what prophet Muhammad teaches. they teach love, they teach peace, they teach us to coexists amidst all odds.Ironically the ones who were trolling SRK were actually committing Haram since the 2.256 sura in Quran says that there is no compulsion in religion.https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwiNuOeTqpbiAhXaF3IKHesrC3gQFjAAegQICBAB&url=http%3A%2F%2Fmquran.org%2Fcontent%2Fview%2F263%2F4%2F&usg=AOvVaw0VDsKLw2Vu0YhnTCsFIiqU2. I want to urge the Muslims that please don’t get swayed by politicians like Mayawati and Navjot Singh Sidhu who reduce you to a mere vote bank.These people are responsible for your miserable condition because they have appeased you over the years and never succoured you substantially.Prefer development over appeasement. Appeasement is temporary but Development is permanent.3. I am a Hindu and i am not a Kafir [ non believer of Islam]. Yes you read it right. Ask yourselves who is a Kafir. One who drinks, One who fosters hatred, One who pesters people in the name of religion. I do nothing as such.When i will die and go to almighty he will not check my birth certificate to see if i am a Hindu or Muslim but he will consider my deeds.According to me every good Hindu is a Muslim and vice versa. Because religion teaches you to love but the bigoted people endorse hatred.4. Don’t ever coerce your wife, sister, daughter to wear a Hijab because if you do so then believe me Allah will never pardon you.If they wear it by their will only then do i support it.5. Allah will hear you even if you don’t utter anything so there is no need of blaring loudspeakers that perturb the people around.Hundreds of years ago Azaan was called but then there were no loudspeakers.6. And lastly make Maulana Wahiuddin Khan your spiritual guruNot a terrorist sympathizer like Zakir NaikI was once a Islamophobe who used to hate the quranic teachings maybe because i never construed them the way they were meant to be interpreted but when i read Maulana Wahiuddin Khan ji’s answers on quora my perception of Islam changed.I still don't adhere to many Islamic teachings and many times denounce things written in the Quran but i love the fundamental message it gives.Thank you for reading my answer.All i want to say is united we stand and divided we fall. Let us stop hating each other on the basis of religion and build a world where there is no place for acrimony.edit: I have received comments saying that Islam revolves around killing of non Muslims.This notion is indubitably unfounded and erroneous. Those who think this have not even read Koran.As i have mentioned earlier 2.256 sura of Koran says that there is no compulsion in religion so there is no point of killing anyone.Koran condones violence only when done in protection.I am a Hindu by choice but it hurts me when someone has something specious to say in order to calumniate about other religions about which they remotely have any idea.

The only solution Muslims are offering is that Non-Muslims should respect Islam/Muslims more so that Muslims do not get ghettoized and radicalized. I fundamentally disagree with this solution of more appeasement. Please read below for my view on the problem and solution.The PROBLEM from Non-Muslim perspective is this: The only thing Muslims can offer the world is this " Give Muslims Respect. If not few Muslims will blowup themselves and others around them"..Muslims have only threats to offer. They have nothing positive to offer in any sense to western world. They have nothing incremental to add to the western world like Jews, Hindus, Sikhs, Buddhist, Taoist and Shinto followers. For example: Hindu/Jain Nonviolence model of Gandhi inspired Martin Luther King to plan his civil rights movement. There was immense pressure on Martin Luther King to make violence a key element of struggle which he forego and credit to Hindu/Jain model of Gandhi. This is good example of Hindu thought adding on top of western culture and not trying to topple western system completely down.Potential SOLUTION: Muslims should build positive narrative around their community and what it can offer to non-Muslim civilizations. For example: Muslims can focus on Islamic banking in western world, prove the model and then argue that this is much more humane way of setting up banking system rather than current corporate greed driven model. Things like this will gain respect and admiration of non-muslims. The current Muslim proposition of toppling the entire western culture down is very unappealing to majority of non-Muslim westerners.Conclusion: Simply Demanding respect is not going to work in this day and age. Acquiring respect through actions will be long lasting.(Another different answer worth reading:Keshav.R's answer to Why do people think that Muslims are the problem, not crazy terrorists but all 1.6 billion Muslims?)