Islamic Banks as Catalyst Of Economic Development

DRAGANOVĠC, Velid (2010) Islamic Banks as Catalyst Of Economic Development. In: 2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo.


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This paper discusses the current murabaha oriented practice of Islamic banks in the light of rules of Islamic law. Special attention is given to the issue of return rate to a depositor. That rate may be variable or fixed depending on contract. In both cases, analysis will focus on increasing return rate as a technique to mobilize deposits, increasing investment, and boast economic development. Mentioned issues will be related to benchmark models like LIBOR (London Interbank Offered Rate) in a case of fixed return rate and a question of risk management possibilities in Islamic finance in cases of profit-loss sharing products. Finally, a possibility of use of some forms of financial derivatives is analyzed in order to safeguard depositors from loss on profit-loss sharing deposits.

Item Type: Conference or Workshop Item (Paper)
Subjects: H Social Sciences > HB Economic Theory
Depositing User: Mr. Ibrahim Kinal
Date Deposited: 01 Feb 2012 14:31
Last Modified: 25 Feb 2012 18:03

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