The Concept Of Islamic Banking And Finance: A Literature Review - vcsonlinzes.cf

 

literature review on islamic banking

The findings from the literature show that there are six main reasons why customers prefer Islamic banking, namely understanding of Islamic banking concept, Shari’ah compliance, religious contradiction, quality and attractiveness of offerings, willingness to deal with Islamic banks and prospect and potentials of Islamic banking. Transcription. Islamic Banking in Sri Lanka- A literature review By Hiruni Nirmali, HongKong and Shanghai Banking Corporation,Colombo, Sri [email protected] & Dr. R. P. C. R. Rajapakse1 Senior Lecturer, University of Sri Jayewardenepura, Nugegoda, Sri Lanka. Literature Review: Islamic and Conventional Banks. words (11 pages) Literature Review in Banking. 14/03/18 Banking Reference this Disclaimer: This work has been submitted by a student. This is not an example of the work produced by our Literature Review Service.


Islamic Banking in Sri Lanka- A literature review - vcsonlinzes.cf


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By using this site, you agree to this use. See our Cookie Policy. Sign in to continue reading Islamic Banking in Sri Lanka- A literature review. By Hiruni Nirmali 2 years ago. Emailhiruninirmali yahoo. Email:champa sjp. Having introduced inthe local banks were venturing into the arena gradually and today there are state banks and commercial banks operating in Islamic Banking.

Hence it is very much important to investigate the present condition of the industry, which led the researchers to review the existing literature regarding Islamic banking in Sri Lanka. The search reveals that there exists a clear gap in literature regarding the determinants of performance of Islamic banking in Sri Lanka Key words: Islamic banking, Financial performance, Ratio AnalysisSharia 1. A high watermark of Islamic banking was established with the amendment of the Banking Act No.

The banks were venturing into the arena gradually and today there are state banks and commercial banks operating in Islamic Banking. In order to pursue industrial development in the Islamic Banking sector, literature review on islamic banking, the Central Bank of Sri Lanka has given permission to open up a fully fledged Islamic Bank and also a fully fledged Islamic Fund. Islamic Banking Principles Islamic Finance is regarded as Sharia compliant finance because it is developed based on the teachings in the Holy Quran and sacred scripture of the religion of Islam.

The Islamic law is known by the term Sharia and a key feature of this is the rule to avoid socially and morally harmful investment activities as well as consumption or lending of money based on interest. This kind of activity is considered detrimental to the economic equality.

Islamic Finance has alternative investments and financing that goes based on the mark ups and on the basis of profit and loss sharing. When considering the product portfolio of the Islamic Finance providers, Murabaha and Mudarabah and Two Tier Mudarabah are most popular.

In Murabaha, the bank agrees to buy back a product n behalf of its customer with the understanding that the customer will buy it back from the bank on a future determined date at an agreed price. This ind of agreements are mostly used in Trade Finance and vehicle literature review on islamic banking. Mudarabah refer to a partnership that is based on reward and risk sharing. In Two Tier Mudarabah, the financier would be re depositing the funds in another Sharia compliant organization or venture.

Researchers have found out that the most common financial product in the Islamic Finance Industry in Sri Lanka is Mudarabah.

Musharakah is another product that is same as Mudarabah but only difference is that partnership finance would be used. Literature review on islamic banking this, the bank and the customer would be jointly investing funds and 3 the skill like management capabilities in a particular project. Diminishing Musharakah is another product where the bank and the customer would own assets or capital under joint ownership with the mutual understanding that the customer will purchase the units of the asset at periodic intervals and at the end becomes the owner of the product.

This is commonly used for the purchase of property, plant and equipment. Ijara is also a product that is coming under Islamic Finance which is basically about Sharia compliant leasing. This is very common in Sri Lanka. Literature search 3. These assess the financial health of an organization and allow comparisons among companies as well as different sectors Slaper and Hall, literature review on islamic banking The main motive of an organization is to earn a profit for the betterment of the firm, which allows a firm to expand its activities and operations.

Also this is considered as the excess amount over costs of literature review on islamic banking business. Profit and Profitability are two different measures, where profit is an absolute figure, while profitability is usually expressed as a ratio, explaining the rate of profit using a base measurement, for example, assets, investments or equity.

Increase in profitability tends to achieve business success and hence the financial managers should focus on improving the profitability of the firm. Uremadu and Enyi, 3. However, there are also certain other measures used as proxies for firm profitability. According to the study of profitability determinants of Islamic Banks in Pakistan by Ijaz et al.

In the study of Kosmidou and ZopounidisROA was used as the dependent variable in measuring the performance of Greek Banks for the period The study on Thailand Banking sector by Sufian and Habibullah aimed at analyzing the impact of internal and external factors on the profitability of the bank measures in terms of ROA and ROE considering the period from The results showed that bank size, economic growth, and capitalization have positively impacted on the profitability while a negative impact was brought by the non-interest income, per capita GDP, credit risk and overhead costs.

Singh and Chaudhary have conducted a study for the period of concerning the profitability determinants of Indian Banks. The results revealed that investments, per capita income, index of industrial production, wholesale price index, foreign exchange reserves, and exports were having a positive impact on profitability of banks in public, private and foreign sectors.

The real interest rate as a macroeconomic variable was found to have a positive relationship too. Flamini et al. And also the macroeconomic variables such as regulations, market power, literature review on islamic banking, and systematic Risk are having an impact on the profitability. Bank size was found to reflect a positive relationship with the accounting profitability, literature review on islamic banking.

Same accounting profitability measures were used by Ostadi and Monsef in their study of Iranian banks and have concluded that the bank size and bank concentration had more impact on the level of profitability among the bank deposits, bank size, bank capital, liquidity concerns, and keeping money prerequisites that were used as independent variables.

The relative newness of the industry and the lack of information availability would have caused this gap of knowledge which would be aimed to be bridged with the aid of this study.

Islamic Finance Industry is a relatively new area to Sri Lanka. There is relatively less number of researches done with covering this field. References [1] Akhtar, M. Factors influencing the profitability of Islamic banks of Pakistan. International Research Journal of Finance and Economics, 66, Bank-specific and macroeconomic indicators of profitability-empirical evidence from the commercial banks of Pakistan.

International Journal of Business and Social Science, 2 6 Impact of internal factors on bank profitability: Comparative study between Saudi Arabia and Jordan. Factors influencing individual investor behavior: An empirical study of the UAE financial markets.

The Business Review, 5 2 Bank literature review on islamic banking and macroeconomic determinants of commercial bank profitability: Empirical evidence from Turkey.

Business and Economics Research Journal, 2 2 Determinants of bank profitability in the South Eastern European region. Athens, Greece. Concentration and other determinants of bank profitability in Europe, North America and Australia. Impact of financial reforms on efficiency of stateowned, private and foreign banks in Pakistan.

Applied Economics, literature review on islamic banking, 42 24 Determinants of commercial bank interest margins and profitability: some international evidence.

The World Bank Economic Review, 13 2 The determinants of commercial bank profitability in Sub-Saharan Africa. International Monetary Fund, literature review on islamic banking. Damodar, N. Determinants of Islamic banking profitability. The determinants of the Pakistan islamic literature review on islamic banking industry profitability: Panel evidence.

Islamic Banking and Finance Review, 1 Thirty years of islamic banking: History, performance and prospects. Measurement of bank performance in Greece. South Eastern Europe Journal of Economics, 6 1 Efficiency and bank profitability in MENA countries. Emerging Markets Review, 12 2 Assessing the impact of bank concentration and liquidity of Refah Bank branches on profitability during the period International Journal of Human Resource Studies, 4 1 Financial contracts, risk and performance of Islamic banking.

Managerial Finance, 34 10 Profitability determinants of banks in India. International Journal of Global Business, 2 literature review on islamic banking Evidence on the non relationship between concentration and profitability in banking. Journal of money, credit and Banking, 17 1 Bank specific and macroeconomic determinants of bank profitability: Empirical evidence from the China banking sector, literature review on islamic banking.

Frontiers of Economics in China, 4 2 O, Egbide, literature review on islamic banking, B. C, and Enyi, P, literature review on islamic banking. Related Publications.

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literature review on islamic banking

 

Dec 02,  · The objective of this article to review previous articles in Islamic banking in Bahrain. The aim of this paper is to know the level of the quality of previous studies conducted in Bahrain. The method used is Google scholar based on Literature review articles. The main findings show that Bahrain is Author: Jassim Aljowder. Literature Review: Islamic and Conventional Banks. words (11 pages) Literature Review in Banking. 14/03/18 Banking Reference this Disclaimer: This work has been submitted by a student. This is not an example of the work produced by our Literature Review Service. of Islamic banking practices will not be clear without an in-depth empirical review of the existing literature that is built based on real-life data. Theory and Practice of Islamic Banking Islamic banking and finance institutions are established based on sharia guidelines that abolishes interest.