BENCHMARKING OF FINANCIAL SOLUTIONS OFFERED BY ISLAMIC BANKS

Abstract

The basic objective of our report was to analyze the interest free banking in terms of Shariah analysis of the products of the banks under study at the operational level by drawing a comparison between the theoretical knowledge of Islamic finance inferred from Islamic Jurisprudence and its practical implementation and to come up with the weak areas and figure out the deviations in the practices ofthe bank from the literature and theoretical knowledge. The literature we specifically consulted and benchmarked for our study was in the form of books named as “Introduction to Islamic Finance”, “Guide to Islamic banking” by Mufti Muhammad Taqi Usmani and Dr. Mufti Muhammad Imran Ashraf Usmani. The financial products of the Islamic banks are being engineered on the basis ofIslamic modes permissible in the Shariah. So while applying these modes to the financial products, the basic conditions that validate those modes and the contracts made between the bank and the customer on the basis of those are required to be met to make the financial product Shariah compliant. Results keeping in view the above approach of analyzing the products of the banks, we took up the underlying modes one by one applicable to a specific product category and carried out our research on that to explore the differences between the practice and the theory. So our study lead towards the critical analysis ofsome ofthe lacunas and weaker areas found in the practices ofthe bank and reflect deviations from the theory