banking systems in the areas of lending and credit. The banking model in Saudi Arabia prevents the collection or paying of interest, since it is considered to be forbidden. In the wake of the recent financial…
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to examine the differences in the banking systems in terms of lending and credit and the underlying ethics of the financial principles and practices utilised in these systems. On the basis of this, it is proposed to undertake a detailed study of the morality in lending law based upon empirical data collected on the banking systems in Saudi Arabia and the U.K.
In order to address this research question, it is proposed to undertake a detailed examination of the lending and credit systems in both Saudi Arabia as well as the U.K by looking into how effective the respective systems have been in terms of encouraging and fostering repayment. The notable feature about Saudi banking systems is the fact that charging interest is forbidden because it is considered to be against Muslim law, hence ethical issues may play a salient role. In view of the financial crisis that erupted in recent years, where the morality and ethics of lending decisions were questioned, it might be of interest to assess whether the ethical element inherent in Islamic banking law practices in countries such as Saudi Arabia could influence lending and credit positively. This is the reason for choosing this particular topic for the study.
Banks are financial intermediaries that accept deposits and channel those deposits into lending activities. Modern banking commenced in the middle ages in northern Italy, where Jewish banking developed because the Christians considered it as usury to charge interest. During the medieval ages, three different kinds of banking systems developed, such as the pawnbrokers, moneychangers who also accepted deposits and commercial lending banks (Seims, no date). This was followed by the emergence of paper money and in the year 1844, bank notes became the official legal tender in England. In the present times, banking laws have been harmonised to a considerable extent with several instruments being developed by the League of Nations and the United Nations Commission on
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In the paper, we will discuss about the current financial practices of the country. Specifically, the paper is focused on the conventional financing practices and Murabaha financing practices. The first section of the paper is an introductory section in which some general information about mode of financing will be discussed.
These concepts, methods, processes and trends of the profession are described in sections 3.1 to 3.4 and the results of the literature review are concluded in section 3.5 3.1 DEFINITION OF THE CREDIT CRUNCH A credit crunch is defined by Bernanke and Lown (1991) as a decline in the supply of credit that is unusually large for a given phase of the business cycle.
The King of Saudi Arab functions as the chairman of the country’s Council of Ministers. But since the country is ruled according to the Islamic Laws, the King does not preserve any right to enact laws. He only “issues royal decrees in accord with the shari’a” (Matthes et al 2).
It is immune to political influence or pressure and the parties to the arbitration proceedings are duty bound to abide by the judgment regardless of how powerful or weak a state participant is. Secondly, arbitration is effective in settling disputes that cannot be effectively resolved in the judicial system on account of lengthy judicial processes.
This basic law defines both the government's responsibilities and rights. The monarchy in Saudi Arabia is hereditary. However, in 2006, an Allegiance Commission was created. The commission composed of Princes was mandated to select the future kings that would govern Saudi Arabia after the present crown prince has gained kingship.
The study focuses on the familiar change management principles to overcome resistance to change and facilitate cooperation within an organisation undergoing a radical transformation process and provides a potential model for similar organisations in the region.
The capital market is thus a recent phenomenon.
Saudi Arabia is a country with a certain amount of history of shares being offered and used by individuals. The procedures in the country started from 1954, and there was no organised market for trading
The Kingdom of Saudi Arabia is located in a vital maritime location facing the Arabian Gulf and the Red Sea. The Kingdom has approximately 2100 km of coastal beaches attracting tourists seeking a little fun in the sun. These beaches, characterized by a vast variety of marine life, also bring a great deal of benefit to the kingdom’s fishery industry.
Global markets have undergone rigorous changes in the past and current centuries. The speed of change has outpaced many business entities and their existence is under imminent extinction. Therefore, the interest of investors, shareholders, customers and shareholders