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A Comparative literature survey on Islamic Finance and Banking

A Comparative literature survey on Islamic Finance and Banking INTRODUCTION Islamic finance was practiced predominantly in the Muslim world throughout the middle ages.  European financiers and businessmen   later adopted many concepts, techniques, and instruments of Islamic finance. In contrast, the term ‘‘Islamic financial system’’ is relatively new, appearing only in the mid-1980s. In fact, all earlier references to commercial or mercantile activities conforming to Islamic principles were made under the umbrella of either ‘‘interest free’’ or ‘‘Islamic’’ banking. This, no doubt, prohibits  the receipt  or payment  of interest as the  nucleus  of the  system, but  is supported by other  principles  of Islamic doctrine  advocating  risk sharing, individuals’ rights and duties,  property  rights, and  the  sanctity  of  contracts.   Similarly, the Islamic financial s...