Proceedings of the 10th International Academic Conference, Vienna

ISLAMIC BANKING SYSTEM IN AFGHANISTAN

SAMEER AHMAD MASTOOR,

Abstract:

The banking sectors have played a vital role in Afghanistan, economic development in past one decade and Islamic banking is widely regarded as the fastest growing sector in the Middle Eastern financial services market. Billion worth of funds are now managed according to Shariah. As Islamic banking is a new concept in our country and all citizens of Afghanistan are Muslims and this document would also help other nations therefore its very import for them to know about Islamic banking and its products schemes. Islamic banking system must steer clear of interest. Theoretically speaking, there is no concept of loans and credits in Islam for financing trade, industry and agriculture except Qard Hassana and where profit and loss sharing is not feasible like interest free loans given by federal government to provincial governments for their developmental needs. Islamic banks, therefore, involve themselves in financing (short, medium, and long term) for the working capital requirements, and also contribute to the capital of an enterprise by participating in its equity. These financings are on profit and loss sharing basis. Islamic banks also mobilize resources on profit and loss sharing basis as distinct from interest payments to depositors on predetermined rates. Prohibition of interest is ordained in Islam in all forms and intent. This prohibition is strict, absolute and unambiguous. So with this reference the project titled has been conducted, based on the primary research in Maiwand Bank, (MB) and literature review and secondary data from various sources. Division has been prepared to get a better insight into the Islamic Banking practices applied by MB with reference to DAB guidelines provided to them to practice accordingly. With reference to this context, this research project is been prepared to find out customers satisfaction and awareness about Islamic banking in Afghanistan. This research project includes meaning and definition of Islamic Banking, Riba, and Islamic banking procuts such as Musharaka, Mudarabah, Murabaha, Ijarah, Salam and Istisna.

Keywords: Islamic Banking System in Afghanistan

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