Differences Between Islamic And World Banking
Everyone wishes to get the best outcome for whatever amount of money he or she owns. Among the best ways to maximize, income is through banking where people deposit their money in banks and await the cash to gain interest over time. There are two internationally recognized forms of banking; world banking and Islamic banking. The two types of banking have their advantages and disadvantages, which make one more preferable to customers than the other. The essence of this essay is to screen these two forms of banking and ultimately determine which is better than the other ethically.
While much has been hypothesized regarding, Islamic banking, there is a need to note that it primarily connotes to banking activities that are closely aligned to legislation contained in the Islamic Sharia Law. It promotes the development of economics of the Islam nations making the best term to describe this form of banking to be Sharia-compliant finance. Sharia does not allow fees for loans or interests which are particular known as usury or “riba.” It does not matter whether the reimbursement is hanging or fixed. Dealing with businesses that specialize in services or goods which are against the Islamic religion are considered sinful. The twentieth century has seen the springing up of several banks that enforce these principles on both semi-private and private firms which were within an Islamic community.
World banking, also called universal banking is a concept mostly in the United States and the United Kingdom. A universal bank takes part in very many banking activities; it may, therefore, be right to term it conclusively an investment bank as well as a commercial bank. This type of bank has several advantages such as the trust of the investors because of the many stakes they hold in the bank. This form of banking also results in economic efficiency that include lower costs culminated with better products and higher output maximizing production of firms. It also promotes efficient resource utilization by investing firms through provision of advisory services.
Basing my findings on the above comparison, it is evident that the Islamic banking system seems more ethical than world banking. However, that is not the case. I find this method of banking discriminative and denies a good number of real businesses the opportunity that maybe they are the only ones who can give. Ethical means that they do not discriminate, and that is exactly what the world banking system offers: service for all. As much as they are strict due to their adherence to Islamic laws that are stern, the discriminative fact still stands eliminating it from the list of ethical businesses.