Sharing of Risks in Islamic Finance

  • Ahmet Sekreter International Black Sea University

Abstract

For most of the people the prohibition on interest is the well known part of Islamic finance. Indeed, the concept of Islamic finance was not being discussed enough till financial crisis, after crisis it started to be seen as an alternative financial system for conventional finance. Sharing the risks is the main concept of Islamic finance and one of the main differences between conventional and Islamic finance. Depositors/savers do not bear any risk in conventional finance however Islamic finance has another solution which is called PLS (profit-loss sharing). Risks and profits between the parties involved in any financial transaction are shared by both financial institutions and depositors/savers with a pre-decided ratio.

Author Biography

Ahmet Sekreter, International Black Sea University

Chief Officer of International Relations Office

Lecturer of calculus

References

Aslam, Z. (2006 July 13). Key Center for Islamic Finance. Hardman & Co. Retrieved from http://www.nzibo.com/IB2/Islamic_Finance_Jul06.pdf
Dar, H. A. and Presley, J. R. (1999). Islamic Finance: A Western Perspective. International Journal of Islamic Financial Services, 1(1).
Hassan, K. and Lewis, M. (2007). Handbook of Islamic Banking. Edward Elgar Publishing.
Kassim, N. M. (2009, May 24). Sunday’s Zaman.
Tayyebi, A. (2008). Islamic Finance: An ethical alternative to conventional finance. The Association of Chartered Certified Accountants. Retrieved from http://www.acca.co.uk/pubs/general/activities/library/financial_reporting/other/tech_tp_if6pp.pdf
The Muslim Council of Britain. (6 October 2008). Business & Economics Committee.
Published
2011-12-06
How to Cite
SEKRETER, Ahmet. Sharing of Risks in Islamic Finance. IBSU Scientific Journal, [S.l.], v. 5, n. 2, p. 13-20, dec. 2011. ISSN 2233-3002. Available at: <https://journal.ibsu.edu.ge/index.php/ibsusj/article/view/199>. Date accessed: 25 june 2018.
Section
Legal and Social Sciences, Economics

Keywords

Islamic Finance; Conventional Finance; PLS