The possibility of socioeconomic effect through prudent development of the Islamic banking system It is an undeniable fact that Islamic Banking has achieved a significant place in front of the conventional banking system and is growing at a rapid pace with the passage of time. In the economics and financial world, “banking” is referred to as the barometer of finance and economy and if the banking system performs in the right direction, the remaining economic and financial system is expected to go in the right direction as well. As far as the Islamic banking system is concerned, the Islamic banking…
Author: Muhammad Zeeshan Farrukh
 Shariah-driven modes of a partnership between Mudaraba and Musharaka must be considered The operations of the Islamic banking industry is increasing at a rapid pace and has gained a considerable share of the financial market all over the world. Now, as Islamic banking has captured a significant share in the local and global financial markets, there is a need to think ahead and do more towards achieving the real objectives of Islamic banking i.e. to strive for product development while keeping in view to achieve the goal of implementation of Islamic economic system. As the banking industry is the cornerstone…
Need to overcome hindrances for the true growth of Islamic banking, financing Islamic Banking and Finance practices are running and growing at a rapid pace and have been proven viable financial systems before the conventional economic and banking system. The present-day Islamic banking practices are Shariah compliant as these are being governed and supervised by eminent Shariah scholars throughout the world but the socio-economic objectives could not be achieved with these practices. What was the objective to start Islamic finance? The objective was to start a financial system that could lead to an Islamic socio-economic welfare system. The reason for…
The Islamic banking and finance industry is developing at a rapid pace in Pakistan. According to the Islamic Banking Bulletin issued by the State Bank of Pakistan, the market share of Islamic banking assets and deposits in the overall banking industry has been recorded at 19.5 percent and 20.5 percent respectively by the end of June 2022. In a short period of time, Islamic banking has achieved a lot against the conventional banking and finance industry. The present gestures of the State Bank of Pakistan and the Government of Pakistan towards the elimination of Riba from the economy and banking…
When we talk about Islamic banking and finance, we must first understand the reality and need for Islamic Banking and finance in the present world. In this respect, we must understand and think about some matters that may clear our minds and eradicate confusion. What is the reason for Islamic Banking to begin when the already conventional banking and finance are being run? What is the goal of Islamic Banking and finance that is not being achieved by conventional banking and finance? Before the emergence of modern Islamic Banking and finance i.e. in the mid of twentieth century, why the…
Pakistan was created in the name of Islam 75 years ago but unfortunately Islamic economic system has not been implemented in the country. The founder of the nation, Quaid-e-Azam Muhammad Ali Jinnah, told in his speech at the inauguration of the State Bank of Pakistan (SBP) on 1st July 1948: “The adoption of Western economic theory and practice will not help us in achieving our goal of creating a happy and contended people. We must work our destiny in our own way and present to the world an economic system based on true Islamic concept of equality of manhood and…
The State Bank of Pakistan has raised key interest rate by 125 basis points and now, the interest rate is 15%. SBP did it due to rising inflation in the economy. The inflation is rising day by day in the economy. In June 2022, the inflation rate recorded at 21.32 percent last as compared to the corresponding month of 2021. This is the simple economic formula that when inflation rate is high in the economy, it means that money supply is increasing in the economy due to which demand increases and when demand increases, the price also increases and subsequently,…