Islamic Banking as against Conventional means of banking LATEST 2021/2022

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The banking sector has been growing at a very rapid pace globally. The early Islamic banking started in the year 1975, where the Islamic Development Bank was set up. Though the base for Islamic bank i... ng grew decades ago, researchers termed Islamic banks as a way of misleading customers against conventional banking methods. The main focus was to provide funds to projects in the related member countries. After this, the first Islamic bank was established in the year 1979- Dubai Islamic Bank. Thereafter Islamic banking and investments started attracting investors with the assurity of major profits and religious guarantees. Initially banks used religious backgrounds and motives to attract customers to take and invest in Islamic products and services. Below are a few: (1) Conducting a few seminars to propagate the means and merits of Islamic banking. (2) Giving depositors and investors a return as against when compared to conventional banks. Islamic banks and conventional banks have been adopting different strategies that would help them to increase their profitability levels and achieve a higher market share. Islamic banking follows a principle of interest free financing and profit and loss sharing (PLS) whereas conventional banking purely works on interest based principle, (Ariff, 1988). In comparison to Islamic banks, conventional banks enjoy a lot more advantages. For example, conventional banks have a longer history, accept interests, do not share losses with customers more developed when it comes to technology and enjoy a fairly larger capital. This is the main reason we see more conventional banks adapting and offering Islamic products and services to attract and retain customers. According to Bashir (1999) and Bashir (2001), the performance of banks in the Middle East is generated by overheads, customer short term funding and non interest earning assets. OBJECTIVE OF THE STUDY: 1) To analyze the performance of the Islamic banking overall in the Middle Eastern countries. 2) To compare the performance between conventional banks and Islamic Banks. 3) To compare the performance between Islamic banks and the Islamic bankin products and services offered by conventional banks. 4) To try and measure the efficiency of Islamic banking in the Middle East between the period of 1970 to 2010 [Show More]

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