Question

Question 3:

In banking industry few banks are working with interest free banking system. In sultanate of Oman, Meethaq Islamic Banking by bank Muscat is the most popular and largest Islamic Banking window. Every Meethaq product goes through the process of Shari'a compliance certification by the Shari'a Supervisory Board and is created in line with the guidelines of the Central Bank of Oman. Critically analyze and explain the effect of Islam on this type of business operations/ Business ethics?

Answer 1

islamic bank are regulated without any implication of interest rate exchange in the systems as there is the lesser risk and there is a lesser rewards as well.

According to the fundamentals of Islam, Bank cannot accept interest because interest is considered haram in Islam so there need to be a contract which are defined on the basis of risk sharing

Risk sharing the process under which risk is shared between both the parties who participates into the contract.

This type of banking is a traditional approach of banking result not a modern approach because there is hardly any rewarding factor as main thing in today's banking is interest as it is rewarding in nature.