Prior to the current global financial crisis, Islamic banking and finance (in the eyes of many) was marginalized and not given much attention by many international and conventional financial institutions. While many “experts”, “scholars” and leaders in the field of Islamic banking have asserted that many institutions practicing Shariah principles have been left unscathed during the financial crisis, this is not a surprise to many, including those who patronize Islamic banks. All Islamic products are under the law of the Holy Koran and Shari’a (Al-Hamzani). And, relying on any unethical or manipulative business practices is prohibited. For example, investing in or deriving money from businesses such as tobacco, alcohol, and gambling are practically non-existent in Islamic finance. The sheer nature and principles of Islamic banking has not only saved it from the global meltdown, but has placed it in a new, bright spotlight amongst anxious consumers and financial professionals alike. According to many based in the Middle East and Gulf region, a good number of Islamic banks have managed and survived the global financial crisis quite well. Simply put: the strict principles and collective thinking behind Islamic banking has proven to be an honest, solid and profitable way of business. No gambling and speculation within the markets are allowed, therefore sparing these institutions from the collapse of financial systems around the world, most notably in America and continental Europe. According to one CEO based in the Gulf state of Bahrain, Adnan Ahmed Yousif, who runs the Al-Baraka Banking Group, “Islamic banks do not rely on bonds or stocks, and are not involved in the buying and selling of debt unlike most conventional European and US banks.” Yousif added: “Islamic banking is distinguished by the fact that it is prohibited from buying debts under Islamic Sharia law, therefore Islamic banks are safe from the effects of the global financial crisis. ” One noticeable impact as a result of the financial crisis is popularity. The term “Islamic Finance” stirs more conversation today than it did or would have even five years ago. Financial industry professionals, legal and regulatory and market participants are now more aware of what Islamic finance is, and many are seeking to join what is proving to be somewhat of a lucrative business. The Islamic banking system (not too long ago) was looked upon as something that hindered the growth and development of the financial markets. Today, these theories have been proven wrong, more so as global financial giants that once dominated the markets are either non-existent or have collapsed and been taken over.
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