Three Views on Islamic Finance Essay Example | Topics and Well Written Essays - 500 words

Three Views on Islamic Finance - Essay Example They point out that it is necessary for Islamic fiancà © to avoid riba by ensuring that differed debt payments are similar to the amount of loan. Islamic finance is also perceived by some to essentially be in a transitional state as it is somewhat in disunity with Shari’ah laws and as such, there are still a number of amendments that need to be made before it can finally be considered as being a primary financial mainstream. In my opinion, I support the first postulation that points out that it has been necessary for Islamic finance to replicate some of the conventional structures (El-Gamal, 2006). This is because failure to adopt such structures will essentially result in their returning minimal profit margins. On the current trajectory pointing out that Islamic finance is currently flying high albeit on what can be considered to be borrowed wings, I am of the opinion that this statement is essentially true. The popularity of Islamic finance has seen it quickly become quite popular in Islamic countries. However, the minimal profit margins that Islamic banks stand to make due to Shari’ah policies that cause them not to maximize on interest charges means that these banks are largely expensive, and not able to effectively compete with the more conventional banks which are well established not only in Islamic countries but also in the non-Islamic countries (Henry & Wilson, 2004). Speed should never be perceived to be a virtue in the event that it is determined that Islamic banking is going in the wrong direction. This is because it will be prone to make more errors whose eventual consequences might either cripple or completely destroy its structure.