Abstract:
We have reviewed the history of Islamization of economy specifically with reference to banking. A historical perspective has been given that has provided impetus towards Islamic banking and the development of Islamic modes of financing both with in Pakistan and internationally. Admissible modes of Islamic finance that are in use have been reviewed with specific reference to their particular nature and the mechanism that is used in their operations. Next we have discussed issues faced by Islamic banks. Then we have discussed the prerequisites of Islamic banking and finance. In the end we have explored the accounting aspects related to Islamic finance with specific reference to Islamic modes of financing. We have compared conventional accounting with Islamic Shari ah and have concluded that conventional accounting needs to be modified to comply with Shari ah requirements.
