Islamic banking is also known as non-interest banking. This kind of banking system is purely based on the principles of Islam. All the laws and guidelines of Islamic teachings come into Islamic banking. There are a lot of principles of Islamic banking. In these principles, there comes the prohibition of interest, ethical standards, moral and social values of Islam, and liability and risk of the bank. The users and investors of Islamic banking enjoy a lot of benefits. If you are not able to write an academic paper about Islamic banking, then you can get help from expert writers of the academic writing services. The main benefits of Islamic banking for its users and investors are given below;
1) Greater transparency
It is a fact that Islamic Shariah doesn’t allow anybody to get an advantage over the other. That’s why the base of the Islam banking lye on the transparency, accuracy, and disclosure. Due to this kind of the transparent nature of an Islamic bank, it is easy for its users and investors to clearly understand its surprise payments and other kinds of hidden charges.
2) Non-compounding of late payment charges
If we take an overview of all the banking systems other than the Islamic banking system, then we come to know that they have a compounding of late payment charges. On the other hand, these kinds of late payment charges are prohibited in the Islamic banking system. In Islamic banking system, these kinds of late payment charges are applied to only that balance of the customers that is due and payable. All the charges that are based on the prior basis are excluded in the Islamic banking system.
3) Clarity on maximum amount payable
The users of the other banking systems rather than Islamic banking system have to pay a huge amount on the sale-based financing products. In these kinds of sale-based financing products, there comes property financing and auto financing. In the Islamic banking system, the maximum and minimum amount of these sale-based finance products are determined upfront. Due to this reason, the customers get enough assurance that their amount of the sale-based financing products will never exceed from a stipulated maximum amount.
4) Strengthens financial stability
Unlike the conventional banking system, the decision making and casual approach over the investments are carried out in an effective way in an Islamic banking system. The companies that are risky are kept away from all the financial institutes that come into the Islamic banking. In Islamic banking, all the audits and analysis are carried out in a careful way. That’s why all the financial institutes are free from the risks. As a result, it is easy for them to enhance the financial stability.
5) Ethical and moral values
There are a lot of salient features of Islamic banking but ethical and moral values are considered as the best salient features of Islamic banking. These ethical and moral values are helpful in promoting the best relationship between the investors and users.
Some other benefits of Islamic banking for its users and investors are to assist the financial inclusion, to reduce the impact of harmful products, to promote the principles of financial justice, and to accelerate the economic development.
1) Greater transparency
It is a fact that Islamic Shariah doesn’t allow anybody to get an advantage over the other. That’s why the base of the Islam banking lye on the transparency, accuracy, and disclosure. Due to this kind of the transparent nature of an Islamic bank, it is easy for its users and investors to clearly understand its surprise payments and other kinds of hidden charges.
2) Non-compounding of late payment charges
If we take an overview of all the banking systems other than the Islamic banking system, then we come to know that they have a compounding of late payment charges. On the other hand, these kinds of late payment charges are prohibited in the Islamic banking system. In Islamic banking system, these kinds of late payment charges are applied to only that balance of the customers that is due and payable. All the charges that are based on the prior basis are excluded in the Islamic banking system.
3) Clarity on maximum amount payable
The users of the other banking systems rather than Islamic banking system have to pay a huge amount on the sale-based financing products. In these kinds of sale-based financing products, there comes property financing and auto financing. In the Islamic banking system, the maximum and minimum amount of these sale-based finance products are determined upfront. Due to this reason, the customers get enough assurance that their amount of the sale-based financing products will never exceed from a stipulated maximum amount.
4) Strengthens financial stability
Unlike the conventional banking system, the decision making and casual approach over the investments are carried out in an effective way in an Islamic banking system. The companies that are risky are kept away from all the financial institutes that come into the Islamic banking. In Islamic banking, all the audits and analysis are carried out in a careful way. That’s why all the financial institutes are free from the risks. As a result, it is easy for them to enhance the financial stability.
5) Ethical and moral values
There are a lot of salient features of Islamic banking but ethical and moral values are considered as the best salient features of Islamic banking. These ethical and moral values are helpful in promoting the best relationship between the investors and users.
Some other benefits of Islamic banking for its users and investors are to assist the financial inclusion, to reduce the impact of harmful products, to promote the principles of financial justice, and to accelerate the economic development.
