Can Islamic Finance Ever Become A Mainstream Product In UK Essay

Can Islamic Finance Ever Become A Mainstream Product In UK - Essay Example Presentation: The rise of the entrepreneur framework that centers around the securing of individual benefits has been for some time bolstered as the best financial approach for most nations to follow, on the grounds that market powers will in general parity out economies over the long haul. The financial framework in the UK additionally works under the entrepreneur model, wherein obtaining of benefits is an essential piece of the framework and â€Å"greed† or the â€Å"unbridled quest for wealth† has become the well known trademark for people and organizations (Ayub,2007, p. 31). The inspiration towards benefit is the foundation of the UK banking framework. The ongoing monetary emergency and corporate embarrassments, for example, Enron have in any case, dispersed the deregulation which existed already and offered ascend to stricter budgetary guideline of currency markets (Von Hagen and Ho, 2007). Deregulation of the financial framework has been accused for the theoretic al exercises of the securities exchanges and the unlimited use and issue of credit, which prompted the monetary emergency (Money morning, 2009). In the current monetary condition, the Islamic financial model offers a totally unique way to deal with banking and loaning, since it did not depend on the benefit inspiration that describes UK banks. The Islamic financial framework depends on sharia law, wherein the charging of enthusiasm on advances to pick up benefit is illegal and is viewed as repudiate the strict precepts of Islam. The inquiry that emerges in this setting subsequently, is: Can the Islamic financial framework offer a feasible money related decision in the U.K.? Since Islamic banks don't charge premium and subsequently give a chance to customers to obtain advances without enormous extra sums being charged as premium, would this be a progressively moral and fair type of banking? The examination question that will be inspected in this work is: Can Islamic Finance at any po int become a standard item in the U.K.? Banking framework in the U.K. In the U.K., the financial framework is commanded by four huge financial aggregates, Royal Bank of Scotland, HBOS, Barclays, and HSBC. The budgetary emergency of 2007 likewise influenced the administrative framework in the UK, creating a taking care of banking tasks (Gola and Roselli, 2009). In March of 2009, the Financial Services Authority in the UK set forward proposition which were equipped towards the redesign of the financial framework and its administering rules, particularly in controlling loaning models and cinching down on the unlimited utilization of credit, so as to forestall a repeat of the money related emergency (BBC News, 2009). For some buyers, the high financing costs on bank advances and charge cards are a noteworthy downside prompting misfortunes, which are particularly troublesome in the current recessionary condition. The use of Islamic law could in this way conceivably lead to the developmen t of a â€Å"balanced, maintainable and fair monetary order†, on the grounds that it can assist with giving a harmony among social and financial standards, as the Islamic framework depends on standards of profound quality, i.e, Islamic law doesn't permit assortment of enthusiasm for banking, for instance (Ayub, 49). Islamic banking The shariah or Islamic law is the predominant fundamental rule in all Islamic money related exchanges, since Shariah consistence is the raison d’etre of the Islamic monetary system.(Ayub, 43). Three striking Shariah standards impact the financial business, i.e, riba, gharar and gambling.This chance sharing model is the