Question

Explain the rules and regulations for islamic and commercial banks .( use web to answer this question make sure you avoid plagiarism)

Answer 1

Islamic banking is a banking system, based on the principles of Islamic or Sharia law. The fundamental principles of Islamic banking are the sharing of profit and loss, and the prohibition of the collection and payment of interest by lenders and investors. The bankers ensure that their ideas do not deviate from the fundamental principles of the Quran. Islamic law prohibits collecting interest or "riba" due to this reason this it also known as non-interest banking,

Two fundamental principles of Islamic banking are the sharing of profit and loss, and the prohibition of the collection and payment of interest.

RULES AND REGULATIONS FOR ISLAMIC AND COMMERCIAL BANKS

1) The Licensing and supervision standards that are applicable to the US financial institutions also govern Islamic and commercial banks. Islamic financial institutions (IFIs) operate as state-chartered entities subject to state and federal laws regulating corporate governance and banking and insurance operations.

2) Regulations of Islamic finance in the US is market-driven; regulators respond on a case-by-case basis to applications and inquiries from Islamic Financial Institutions (IFIs) that want to offer Islamic financial products in the US.

3) An organiser of a shariah-compliant bank in the US must face the challenge of introducing new financial products or services to regulators, and must meet significant creditworthiness requirements.

4) A bank in the US must be licensed by either the OCC or a state banking authority and is supervised by the Federal Reserve and the FDIC. All deposit accounts offered by US banks are required to be insured by the FDIC to ensure the 'safety and stability' of financial institutions.

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