Essay On Role Of Islamic Banking In Pakistan

Essay On Role Of Islamic Banking In Pakistan-60
Twenty-five years since the establishment of the first Islamic bank, more than 150 Islamic institutions have come into existence.Though most of these are in Muslim countries, there are some in Western Europe as well as in North America and Asia.In 1970s Islamic banking was not famous, but at the start of twenty century it is very common in all over the world.

Commonly, sukuk is known as ‘Islamic bonds’, but the correct translation of the Arabic word of Sukukis, ‘islamic Investment Certificates’ (Tahmoures, 2013).

The term ‘Islamic bond’ is being pointed out as the only difference between sukuk and conventional bond is that the regulation consistent with Islamic principle of financial trading apply to sukuk (Arif and Meysam, 2012).

Furthermore, instead of giving a fixed interest rate on the savings account, Islamic banks offer a share of the bank's profit, as a return on deposits and The early seventies saw the institutional involvement.

The Islamic Development Bank, an inter-governmental bank was established in 1975.

Despite of the differences between sukuk and conventional bond, Balkish, Azwan and Rabiatul (2012) stated that, both financial instruments have fixed term maturity, bear profit (coupon) and tradable at normal yield price.

However, sukuk must be related and attached to specific asset, service, or project for a certain time period.Most of the expansion has been contributed by the issuance of sukuk.According to Nazri (2012) in his presentation of Islamic Banking Operations and Regulatory Framework Workshop in Sri Lanka, sukuk is defines as certificates that represent the holder’s proportionate ownership in an undivided part of the underlying asset, where the holder assumes all rights and obligations to such assets.1.2 Problem Statement According to Dodik (n.d), there is only 20 total of results from Proquest searching of sukuk.Today, the increasing popularity of Islamic finance and banking product around the world, especially the issuance of sukuk, a great number of research has been attempted to investigate difference, application, and performance as related to sukuk.By continuing to use this site, you consent to the use of cookies.We use cookies to offer you a better experience, personalize content, tailor advertising, provide social media features, and better understand the use of our services.To learn more or modify/prevent the use of cookies, see our Cookie Policy and Privacy Policy.1.0 INTRODUCTION 1.1 Background Study The Islamic banking and finance sector is a fast growing industry, where it expanding and getting stronger each and every year.Conventional bond is a debt obligation issued by corporation or government in order to obtain financial resources (Zhamal, 2010).The issuer is obligated to pay back the bondholder a principal amount plus periodic interest payments or coupons, upon maturity.


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