Question

In: Finance

Please provide a comparative discussion of the differences between Western finance and Islamic finance and provide...

Please provide a comparative discussion of the differences between Western finance and Islamic finance and provide at least 2 examples of how certain transactions in the western system would be reconfigured to comply with the restrictions governing the Islamic system.

Solutions

Expert Solution

There is a difference between western financing and Islamic financing as Islamic financing is fundamentally based upon the principles of Islam and Sharia law and they are not doing anything against the law of Sharia as law of saria will be prescribing various principles and acceptance of various elements as halal and haram in Islamic Financing.

Islamic financing does not support the principle of interest and they will be advocating that accepting or paying interest is haram in Islam because that is not in accordance with the Sharia law as interest is not considered in Islam whereas in western financing interest is the main principle according to which lending and borrowing is based upon so it is the major difference between western financing and Islamic financing.

Islamic financing also based upon the principle of risk sharing where the money is provided with the banks and banks will be sharing the risk with the customers whereas in the Western financing, risk sharing is no concept as risk is completely transferred to the commercial banks and there is no sharing of the risk so so this is another difference relating to Western financing and Islamic financing.

there could be certain transactions in the commercial world of Western financing that could be re figured in order to get in accordance with Islamic finance by eliminating the component of interest completely from the loan and they could also be entering into a risk sharing agreement rather than payment of interest.


Related Solutions

What are the differences between the Western and Islamic perspectives on corporate governance?
What are the differences between the Western and Islamic perspectives on corporate governance?
In what ways could Islamic finance be considered an alternative to conventional finance? Is Islamic finance...
In what ways could Islamic finance be considered an alternative to conventional finance? Is Islamic finance a viable alternative to conventional finance?
Make a comparative analysis between the following two set of Islamic bank financial statements: Dubai Islamic...
Make a comparative analysis between the following two set of Islamic bank financial statements: Dubai Islamic Bank, United Arab Emirates, and Sharjah Islamic Bank, United Arab Emirates 1. Find or google two different Islamic bank from two different countries. 2. Get the newest year available. 3. Not limited to UAE only. 4. Find if they prepared the: i. Statement of Restricted Investments ii: Zakat and charity fund statement. iii. Qard (loan) fund statement. iv. Roles of the sharia advisor. v....
Discussion Question 1: In this discussion please compare the differences between Human Resource Management and Strategic...
Discussion Question 1: In this discussion please compare the differences between Human Resource Management and Strategic Human Resource Management. Give us examples of each. Discussion Question 2: This week we will be looking at leadership. Discuss at least two approaches to leadership and why they are important to the study of management. Give examples of each.
Please provide a discussion of what is meant by Behavioral Finance, how it differs from traditional...
Please provide a discussion of what is meant by Behavioral Finance, how it differs from traditional finance, and give some examples of biases or other psychological frames that may be seen as having an impact on investment decision making.
State the differences between Market Mechanisms in ConventionalEconomics and Islamic Economics.
State the differences between Market Mechanisms in Conventional Economics and Islamic Economics. 
what are the practicabilities of Islamic finance in current finance market?
what are the practicabilities of Islamic finance in current finance market?
Discuss the differences between absolute advantage and comparative advantage.Please provide at least one example of each.
Discuss the differences between absolute advantage and comparative advantage.Please provide at least one example of each.
Discussion Prompt 1: Discuss the differences between deductive reasoning and inductive reasoning. Provide a unique example...
Discussion Prompt 1: Discuss the differences between deductive reasoning and inductive reasoning. Provide a unique example of each.
1.What are the differences and similarities between goods and services? Please provide some examples. 2. Please...
1.What are the differences and similarities between goods and services? Please provide some examples. 2. Please list and discuss the many components of a promotional campaign. How is it different for international marketing? What activities need to be changed to adapt to the foreign target market?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT