University of Hertfordshire

By the same authors

Islamic banking

Research output: Chapter in Book/Report/Conference proceedingChapter

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Islamic banking. / Karwowski, Ewa.

Handbook of Critical Issues in Finance. Edward Elgar Publishing Ltd., 2012. p. 180-186.

Research output: Chapter in Book/Report/Conference proceedingChapter

Harvard

Karwowski, E 2012, Islamic banking. in Handbook of Critical Issues in Finance. Edward Elgar Publishing Ltd., pp. 180-186. https://doi.org/10.4337/9781849805957.00031

APA

Karwowski, E. (2012). Islamic banking. In Handbook of Critical Issues in Finance (pp. 180-186). Edward Elgar Publishing Ltd.. https://doi.org/10.4337/9781849805957.00031

Vancouver

Karwowski E. Islamic banking. In Handbook of Critical Issues in Finance. Edward Elgar Publishing Ltd. 2012. p. 180-186 https://doi.org/10.4337/9781849805957.00031

Author

Karwowski, Ewa. / Islamic banking. Handbook of Critical Issues in Finance. Edward Elgar Publishing Ltd., 2012. pp. 180-186

Bibtex

@inbook{6671e2783e2441c48af9c4d35951cb26,
title = "Islamic banking",
abstract = "Islamic banking refers to banking practice that is in line with Muslim written and unwritten law, the Sharia. Generally, three main differences between mainstream and Islamic banking are observed (Khan and Mirakhor, 1992; Dhumale and Sapcanin, 2004): (1) interest rate payments are prohibited in Islamic banking transactions; and (2) so are collateral requirements; (3) a compulsory charitable tax, zakat, must be paid on profits. While the last point is not unfamiliar to Western bankers because of ethical banking practices, interest- and collateral-free banking seems incompatible with mainstream financial instruments and underlying economic models. Conventional economic theory often uses the concept of asymmetric information to explain the need for collateral and interest rates in bank lending (Bernanke and Gertler, 1989). The idea is that the bank has limited information as to what its client intends to do with the borrowed money, whereas the debtor has perfect knowledge of this.",
author = "Ewa Karwowski",
year = "2012",
month = "10",
day = "31",
doi = "10.4337/9781849805957.00031",
language = "English",
isbn = "9781849803700",
pages = "180--186",
booktitle = "Handbook of Critical Issues in Finance",
publisher = "Edward Elgar Publishing Ltd.",

}

RIS

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T1 - Islamic banking

AU - Karwowski, Ewa

PY - 2012/10/31

Y1 - 2012/10/31

N2 - Islamic banking refers to banking practice that is in line with Muslim written and unwritten law, the Sharia. Generally, three main differences between mainstream and Islamic banking are observed (Khan and Mirakhor, 1992; Dhumale and Sapcanin, 2004): (1) interest rate payments are prohibited in Islamic banking transactions; and (2) so are collateral requirements; (3) a compulsory charitable tax, zakat, must be paid on profits. While the last point is not unfamiliar to Western bankers because of ethical banking practices, interest- and collateral-free banking seems incompatible with mainstream financial instruments and underlying economic models. Conventional economic theory often uses the concept of asymmetric information to explain the need for collateral and interest rates in bank lending (Bernanke and Gertler, 1989). The idea is that the bank has limited information as to what its client intends to do with the borrowed money, whereas the debtor has perfect knowledge of this.

AB - Islamic banking refers to banking practice that is in line with Muslim written and unwritten law, the Sharia. Generally, three main differences between mainstream and Islamic banking are observed (Khan and Mirakhor, 1992; Dhumale and Sapcanin, 2004): (1) interest rate payments are prohibited in Islamic banking transactions; and (2) so are collateral requirements; (3) a compulsory charitable tax, zakat, must be paid on profits. While the last point is not unfamiliar to Western bankers because of ethical banking practices, interest- and collateral-free banking seems incompatible with mainstream financial instruments and underlying economic models. Conventional economic theory often uses the concept of asymmetric information to explain the need for collateral and interest rates in bank lending (Bernanke and Gertler, 1989). The idea is that the bank has limited information as to what its client intends to do with the borrowed money, whereas the debtor has perfect knowledge of this.

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U2 - 10.4337/9781849805957.00031

DO - 10.4337/9781849805957.00031

M3 - Chapter

SN - 9781849803700

SP - 180

EP - 186

BT - Handbook of Critical Issues in Finance

PB - Edward Elgar Publishing Ltd.

ER -