Islamic Finance and Banking - Example

The paper "Islamic Finance and Banking" is a perfect example of a report on finance and accounting. "Islamic banking refers to a system of banking activity that is consistent with the principles of Islamic law” (Kettel, 2011 p23). Islamic banking is almost always examined in contrast with Western banking systems that were pioneered by Western European nations which seems to have spread around the world through colonialism and global matters. Islamic banking is distinct because it contains some core elements and structures of running affairs in a way and manner that principles of Islamic traditions and ideas are kept and upheld by the practitioners (Hassan and Lewis, 2007).

There are many Islamic nations around the world that adhere to Islamic banking principles as the mainstream system and method of banking. There are also some non-Muslim countries in the world where Islamic banks exist to support the Muslim minority. This paper examines the elements of Islamic banking and how it differs from Islamic banking. It would view the critical elements and aspects of Islamic banking and what makes it unique and distinct from the different kinds of banking. The paper would then focus on Saudi Arabia and the key elements of the development of Islamic banking in Saudi Arabia.

The paper would examine the important elements and aspects of Islamic banking in this country and how it compares with banking in other countries around the world. The research would also move on to examine the position of Islamic banking and retail consumers. It would examine how the distinctive elements of Islamic banking appeal to consumers. It would identify why the retail consumers of financial services have a different attitude towards Islamic banking. Islam & Sharia Islamic banking is a form of banking that is carried out according to the principles of Sharia or Islamic Law (Latifa and Lewis, 2007).

The term Sharia is an Arabic word that can be translated loosely to mean the way to life or the way to the source of life (Latifa and Lewis, 2007). This means that Sharia is a body of rules and regulations that define the way a Muslim or practitioner of Islam must conduct his life and affairs. Sharia is a legal system for keeping up with the code of behavior of the Holy Quran and the Hadiths or the authentic traditions of Islam. Sharia is a practical guideline that is given to Muslims and it shows the important activities and things for living a righteous life according to Islam.