Abstract:
An overwhelming criticism on practice of Islamic finance is lesser application of Shari’a based (profit and loss sharing) modes of financing. This study is conducted to analyze the issue based upon available literature and data. It is found in the process that profit and loss sharing based modes of financing are very much practiced by Islamic finance industry in the form of deposits, house financing, Sukuk, equity funds and Mudaraba companies. As for direct financing by banks is concerned, share of PLS based modes of financing is very negligible, primarily due to non-conduciveness of existing business environment.
