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Research Article | Open Access
Volume 13 2021 | None
Navigating Financial Principles: An In-Depth Exploration of Islamic Banking and its Ethical Foundations
Bilquees Usman
Pages: 2642-2648
Abstract
This article delves into the intricate realm of Islamic banking, examining its ethical foundations and the principles that distinguish it from conventional banking systems. Beginning with an exploration of the historical context and emergence of Islamic finance, the article navigates through the fundamental principles governing Islamic banking, including Tawhid, Shariah compliance, profit-and-loss sharing, and ethical investment guidelines. A detailed analysis of key financial instruments such as Murabaha, Ijarah, Sukuk, and Takaful sheds light on the unique mechanisms employed within Islamic banking. A comparative examination with conventional banking highlights the distinct features and resilience of Islamic banking during economic uncertainties. Drawing insights from case studies, the article showcases successful examples of Islamic banking institutions, addressing challenges faced and strategies employed for sustainable growth. A comprehensive overview of the regulatory framework, including the roles of regulatory bodies and Shariah boards, underscores the importance of maintaining compliance within Islamic banking practices. The article also explores future trends and challenges within the Islamic banking sector, considering its evolving landscape and potential impacts on the global financial system. Emphasizing ethical banking principles, the article concludes with reflections on the broader implications of Islamic banking and its collaborative potential with conventional financial institutions. This exploration aims to contribute to a deeper understanding of Islamic banking, its ethical underpinnings, and its evolving role in shaping the trajectory of global finance.
Keywords
Islamic banking, Financial Principles, global finance, finance, ethics, and faith
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