The number of Islamic financial institutions has risen to over three hundred institutions Islamic banking dissertation proposal more than seventy five country all over the world. For instance, does a profit sharing structure, as opposed to one that is primarily based on interest, result in more profitability?
The mean value of these ratios in Islamic banks compared to that of conventional banks would give a descriptive picture of how the profitability differs in Islamic and conventional banks. Sharia put forward the guiding principles for all aspects of human being in order to spread the concept of justice in society.
One fundamental aspect of this fast growth is that most of Muslims who are a quarter of the population on earth want to follow Sharia principles. In case of losses, there is a loss of time from the part that brought their expertise and a loss of capital for the bank.
They face a crucial challenge of improving their risk management strategies and corporate governance as they face a wide sort of interest rate, liquidity and non-payment risks. Funds are received from the investing public on the basis of Mudaraba, and the bank is allowed to use the funds any how they see fit.
In addition to, these countries economy structure rely on oil trading and governments also supporting the local investments in order to reduce the importance role of oil. Window is operating and accounting that separated from the conventional operations such as HSBC amanah, and Lloyds.
The two parties; sellers and buyers agreed about the price of the product at the sale time and cannot contain any charges for deferring payments . Empirical findings would also be utilised in describing these phenomenon, in order to come up with a coherent argument on the relationship between capital structure, profitability and risks.
Therefore, based on these theories and the following questions, this research would aim to study the capital structure of Islamic and conventional banks, and determine how exactly it affects profitability and risks. Ijarah means leasing and this contract is similar to sale contract but the different is that Ijarah is more sale of the usufruct for particular period of time rather than sale of a tangible asset.
They follow a varied range of accounting standards and practices. The bank then pools all profits from different investments, and shares these profits with savings depositors, based on predefined ratios.
Islamic banks are still very nascent compared to conventional banks. Extensive literature review would also be conducted on this effect to know what other theorists have found. Exchange contracts contain a variety of contracts which are similar to each other in terms of the outcome but are different from one another in terms of the exact legal requirements, obligations, rights and liabilities involved in or associated to them.
Both parties share the profits on a pre-agreed ratio, allowing managerial skills to be remunerated, with losses being shared on the basis of equity participation.
According to Olson and ZoubiIslamic banks differ from conventional banks in a number of ways: Whereas, branch similar to the window but using separate branches instead of the conventional branch network. Finally, social welfare contracts which promote the welfare for less advantaged people by contracts between society and individuals.
Another fundamental aspect is the growth of oil wealth with high demand for appropriate investments in the Gulf region. By identifying and obtaining the mean value of the capital structure across both types of banks, I would understand how the structure of Islamic banks differ to conventional banks.
Linear regression analysis would be conducted on data provided on all 10 Islamic and conventional banks differently to determine how well capital structure affects changes in profitability and risks. The Murabaha is a contract between the bank and its customer for the sale of goods at a price that includes an agreed profit margin, either a percentage of the purchase price or a lump sum.
The specific risks analyzed include market risk, credit risk, operational risk, liquidity risk, Sharia low risk, concentration risk and reputation risk.
Third, intermediation contracts which offer agents with group of tools to perform financial intermediation besides providing fee-based services for economics activities.
Before any of these analyses, about 20 Islamic and conventional banks would be identified and their annual reports would be obtained. However, foreign banks have to follow the central banks policy and regulations. Gulf Cooperation Council 3. The Mudaraba is a profit-loss sharing contract, with one party providing the capital and the other party providing its expertise to invest the capital and manage the investment project.
As opposed to conventional banking institutions that operate based on interest income, Islamic banks operate based on profit and loss sharing agreements PLS.The impact of risk management on profitability in Islamic banks against conventional banks.
Introduction ) Background of the study Since s Islamic banks is developing on the feet and leg.
The main objectives of this proposal is to find out the opportunities for development and growth of Islamic banking in UK and challenges which are currently faced by Islamic banking in the world and United Kingdom specially.
This Research Proposal was prepared by Mr Takkiddin, a Master of Islamic banking student at INSANIAH University College. He sores A+ for this excellence work.
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Since the establishment of theDubaiIslamic Bank inover Islamic banks have been established in 70 countries the world over.
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