Emerging Trends in Islamic Banking

Abstract

Islamic banking has seen tremendous growth in the past two decades. The growth is due to various modes of Islamic finance. The basis of the traditional banking is based on the concept of debt and interest. In contrast the Islamic banking and finance modes draws its roots from the Islamic Shariah. While looking at the Islamic modes of finance it should be kept in mind that it is not solely practiced in Islamic countries or by Muslims. If we look at the new trends in the finance, we find out that the modes such as Venture Capital Finance and Securitization of the Islamic modes emerged from the western countries. The venture finance companies of the USA have billions of dollars at their disposal. At present the US is the biggest market for the venture funds. Development of this concept in Islamic finance would open up an arena of unlimited opportunities for Islamic financial institutions. The need of the hour is to implement these emerging trends in the Islamic banking and finance paradigm. In this concern the role of the State bank is of enormous value. In the past few years State bank has formed various policies to regulate and develop the Islamic finance market. Even the operations of State Banks can be run under the Islamic financial system. This thesis has explored many such topics in detail. In the end, this research paper gives recommendations as to how this system can be further improved by taking certain steps. In the long run, one can easily predict this system to prevail as it basic concept is to eliminate the unjust exploitation of the needy and poor people of the society.