Islamic Banking and Fiscal Growth -Secura India
Islamic banking industry is robust and shows enough profit these days. Nearly most of the countries follow Islamic Banking System as it is much faster than conventional banking system. Islamic Banking System demands for products and services that abide by Shariah law. Generally Shariah complaint investing helps in attaining high financial ratios of return and assets than conventional ones. Banking segment generally follows diverse banking models such as dual banking and Islamic banking panes within conventional banks. Shariah complaint investing and Islamic finance have marked a rapid growth in the finance and investment sector during last three decades.
Government has an eye on financial dealings with most of the gulf countries with the opening of Islamic banking in India as it helps attract million dollars of private equity. Islamic banking in India supports ethics and Socially Responsible Investment and is said to be a means for financing that lacks debt. Shariah Investing helps to raise Shariah compliant fund which is in accordance with the Shariah rule. Shariah Investing does not comply with the companies deal and uphold to be necessarily Shariah compliant instead; the funds should be in accordance with the rule. Shariah compliant fund can be managed as mutual fund investment or Hedge fund.
Islamic bank shows the way to economic growth by encouraging fruitful projects and also supporting the trade of goods. The prime factor behind Islamic finance is trading and Islamic Finance Company nowadays has marked up real opening to the changing phase of financial segment. Islamic finance company does not hold up debt which is produced through direct lending and borrowing. Islamic finance goes well with the profit and loss method that makes the industrialist liable for each and every loss that happens to his project thereby eradicating the injustice caused by interest-based financing. Owing to the mobilization of savings that are set aside from interest-based banks the economic growth of Islamic countries are very much improved by the Islamic financial system. People are motivated to invest from the fact that the profit gained from Islamic bank is much higher than the predetermined rate of interest gained from conventional banks.
As per the Islamic Banking principle, if somebody has come up with an improved project he can opt for finance and won’t be exposed to terrific risks. Islamic banking system manages risk in a better way by dispersing it among the financiers and the industrialists. Islamic banks have contributed much to the macroeconomic and financial steadiness by making more accessible credits. Thus, Islamic financial system can serve up as a means to promote economic growth and human welfare. It promotes risk-sharing as a substitute for debt-financing. Islamic banking, no doubt adds much to the macroeconomic stability for both developing and developed countries.
Most of the asset management company like Secura supports Shariah investments that hold Islamic finance in managing the assets which is in accordance with Shariah law. The main attraction of Islamic banking is the prohibition of interest and unethical investment. They are also characterized by the high productivity and the profit sharing methodology. Islamic Banking has found its pace to be the complete means of economic growth. For more information please visit http://www.securaindia.com/
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