Question

Compare and contrast Sharia banking and Saudi financial management practices with Western banking and financial management practices.

What difficulties might a Saudi company encounter as it does business in countries that do not follow Sharia banking and financial management practices?

Answer 1

Sharia banking and Saudi financial management practices are Islamic models that run in many Islamic countries as well as secular countries. They provide high profit and high risk and are able to attract people more.

Let us talk about the difference between Islamic and western financial management practices.

Sharia banking services provide either deposits or credit for free interest and in exchange they share the profit. Whereas western financial services have some charged interest and it is not free.

The difference in their principle is such that Islamic financial services support religious, communal, reasonable profit and equity environment whereas western financial services follow principle of secular, individualistic, profit maximization and survival of fittest process.

The philosophical point of view of Islamic financial services is unity of God whereas of western financial services have economical rationalism.

The criteria of islamic financial services is dependent on the ethical laws that originate from Quran Full Disclosure Accountibility.

These were the differences between Sharia banking and Saudi financial management practices with the western banking and financial management practices.

Now let us see what problems Sharia banking is facing where countries do not follow their services. People over there play a huge criticism against Sharia laws. Also because this law has fast earning but high risk it is little hard to make the whole population of a country in the favor of this law. There are many prohibitions regarding this.

This we saw its little hard to convince and attract people where there is western banking flourished to follow Islamic law.