Islamic banking has been thriving in recent years. The primary target market for these banks is basically the Muslims in Islamic countries, as well as Muslims in Non-Muslim countries. Many banks in Muslim countries and non-Muslims follow Islamic banking system, this banking sector has experienced a boom in the last years of the 20th century and also many Non-Muslims have benefited from the services of Islamic banks.
Although there are some differences in the practices of these banks, in General, most of these banks following Islamic principles are fully Shariah compliant. Since this area is still new and growing and therefore must have some kind of relationship with other banks that operate as conventional banks.
Here are the challenges for the Islamic banking sector:
1. A lot of legislation is needed for Islamic banking throughout the world and especially in non-Muslim countries; even in Muslim countries, some legal loopholes are present in its proper implementation.
2. complete economic models and Islamic banking have still to develop or are not in their stage of ripeness to provide a model of economic development and prosperity.
3. and developments and research in the most recent banking sector are in non-Muslim countries where their interest based banking past conventional instruments, will enjoy a very strong position so Islamic banking but less than conventional banks.
4. environment of these banks in the West have been rejected after 9/11 attacks on the WORLD TRADE CENTER, New York and later Prophet Mohammad (P.B.U.H.) protests in the Muslim world, widening the gap between Western investors and Islamic banking markets.
5. the market is good, but much less than conventional interest based on banks around the world, that is more than some countries.
The article is written by Ahsan Ayub and Maria Iqbal. Joseph and Mary worked for Marish hotels solutions and have written articles on various topics, including business, marketing, finance, entrepreneurship, technology etc. In addition to this, the company Marish hotels Solutions offers a wide range of services in the category of Business and IT solutions. The company also provides consultancy services for many small and medium-sized enterprises.