Chapter 6: The ethics of banking and financial services
The historic growth of Islamic banking in various parts of the world has brought to the surface certain financial concerns. These concerns range from the validity of Islamic financial instruments to the nature and challenge Islamic banking faces in a free market economy. The allure of Islamic financial instruments is real and in response conventional commercial banks, like Citigroup, have begun to offer Islamic financial services. Simply put, this is because rising segments of customers demand them. These particular segments are either driven by spiritual, economic, safety, or psychological reasons or, most likely, Muslims in the West who seek a kind of spiritual peace of mind or who view religiously guided financial transactions as a means to minimize doubt about the legitimacy of their financial affairs. In countries with Muslim majorities, the Islamic financial sector has experienced a dramatic increase in the number of institutions and numbers of products they offer, as many people find that sector more attractive than conventional banking. In Malaysia, for example, the rate of growth in Islamic banking is between 20 and 25 per cent (Yousef, 2011a). In Pakistan, Islamic banking shares about 10–11 per cent of the market and is expected to reach 22 per cent by 2020 (Rizvi, 2013).
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