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Financial Performance Of Islamic Banking And Conventional Banking In United Kingdom A Comparative Study

1423 words - 6 pages

Chapter 1: Introduction
1.1-Introduction to Chapter:
This chapter describes the brief introduction about research title, research aims, research objectives, research hypothesis, research context and research limitation used in this research.

1.2-Research Title:
Financial performance of Islamic banking and conventional banking in United Kingdom- A Comparative Study.

1.3-Research Aim:
The Aim of this research is to analysed and evaluate the financial performance of European Islamic Investment Bank (UK) with Allied Irish bank (UK) and Northern Bank (UK), In Terms of their Profitability, Liquidity, Risk & solvency & Efficiency Ratios which will give an insight comparison of overall financial performances of European Islamic Investment Bank with Allied Irish bank And Northern Bank.
1.4- Research Objective
Research Objectives are set of goals which researchers intends to make from the research conducted. By Comparing financial performance of Islamic bank with other two conventional banks researcher can measure the overall financial health over the given period of Islamic bank.
 To understand the financial performance of Islamic bank.
 To understand the principles of Islamic banking and apply the knowledge in practice.
 To make the audience aware of the importance of and concept of Islamic banking.
 Based on research findings to propose recommendations for better financial performance

1.5 -Research Overview:

The Term Islamic banking (which is also known as Islamic finance) refers to the way of doing commerce and transactions which are Sharia compliance. For Islamic banks to work it must fully comply with Sharia .This type of Islamic economic system has now become a point of central attention in Islamic world, which covers 16.67% of the global land. The Muslim population by the year 2050 A.D is expected to be over 2.6 billion or over 26% of the projected population of 10 billion. Under Sharia, Interest which is known as Riba is prohibited in all forms; this prohibition is strict, absolute and unambiguous. The holy Quran has clearly warned that those who do not forego interest (RIBA) which has already accrued and do not stop themselves from taking it any further, then they are at war path with ALLAH and His Last Prophet Peace be upon him. According to Muslims Scholars there are two types of RIBA namely; Riba Al Fadl and Riba Al Nassiyah.

 Riba Al Fadl is defined as the addition compensation without any consideration resulting from a Sale of commodity.
 Riba Al Nassiyah is defined as the addition money, which lender sets over and above the principle.

In 1963, Islamic banking was first introduced in a small town of Egypt, since then many Islamic banks were established in the Asia & Middle Eastern region. This System of banking was emerged when traditional banking system and financial organisation lacked to provide Sharia based investment options for the customers. The first association of Islamic banks was...

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