Awarness of Islamic Banking Culture in Pakistan

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Published information about principles of Islamic banking and finance and their applications is growing day by day. Pakistan is one of the 57 Islamic countries having a total population of over 170 million where majority of population practice Islam. Steps for Islamization of banking in Pakistan were initialized during 1977-78. Elimination of interest from the operations of specialized financial institutions took place in 1979 and from commercial banks during 1981-85. Commercial banks in Pakistan were cased to accept any interest baring deposits and all deposits were treated on the basis of profit and loss sharing since 1985. Islamic banking is defined as a banking system in consonance with the ethics and value system of Islam and is governed by the rules and regulations led by the Sharia’h. Main sources of sharia’h are Quran, Hadith, Sunnah, Ijmah, Qiyas and Ijtehad. According to Islamic sharia’h interest (Riba) is prohibited i.e. institutions are not allowed to offer a fixed rate of return on deposits and nor are they allowed to charge interest on loans , income from and investment in all un-ethical economic activities like investment in gambling, pork, alcohol etc are prohibited (Ayub, 2008). Financial activities in Islam are real asset backed with the ability to cause value addition. Most commonly used Islamic banking instruments in Pakistan are Mudaribah, Musharikah, Murabaha, Ijarah, Bai-Muajjal, and Bai-Salam. This study will help researcher cognize the awareness of Islamic banking culture as well as attitude toward Islamic banking in Pakistan.Background of the studyIslamic banking has been widely studies area since 1970s. Islamic banking was introduced to Pakistan in 1977-78. Interest elimination from the operations of spe...

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...ce, G. (1999). Islamic Ethics and the Implications for Business. Journal of Business Ethics, 18 No. 4, 345-358 Sources of Islamic Law. (n.d). Wikipedia. Retrieved February 27, 2010, from http://en.wikipedia.org/wiki/Sources_of_Islamic_law State Bank of Pakistan. (2009). Islamic Banking Bulletin. Islamic Banking Bulletin, 4 No. 3, 1-21 Usmani, M. T. (1998). An Introduction to Islamic Finance. Karachi: Idaratul Ma`arif. Usmani, M.I.A. & Zubairi, Z. (2002). Meezan Bank’s Guide to Islamic Banking. Retrieved February 26, 2010, from http://www.meezanbank.com/pages.aspx?iPageID=177 Venardos, A.M. (2005). Islamic Banking and Finance in South-East Asia: Its Development and Future. Singapore: World Scientific Publishing Company, Incorporated. ISBN: 9789812561527 9789812569394 Zaher, T.S., & Hassan, M.K. (2001). . Financial Markets, Institutions & Instruments, 10 No. 4, 155-199

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