ISLAMIC FINANCIAL INSTITUTIONS: INOCULATION AGAINST THE CRISIS
ON THE EXAMPLE OF THE PERSIAN GULF STATES VLADIMIR SENKOVICH Postgraduate student of the Institute of Africa of the Russian Academy of Sciences Islamic finance Keywords:, GCC, sukuk The fundamental difference between Islamic finance and traditional finance is the prohibition of all forms of interest payments. In addition, it is necessary to mention a different basis for risk allocation, namely: the client and the bank jointly bear the risks of any investment on previously agreed terms, and also share both profits and losses. An Islamic bank is prohibited from making interest-bearing loans to other banks, and its investment activities must comply with Sharia law. In recent decades, the Gulf States have achieved impressive results in comprehensive modernization, including in the financial sector. The authorities of the Arabian monarchies have learned from the periodic fluctuations in oil prices, and therefore, since the 1980s, they have been making efforts to diversify their economies, develop the manufacturing industry and services, including financial ones. In a relatively short period of time, the countries of the Cooperation Council for the Arab States of the Persian Gulf (GCC) managed to create a fairly competitive financial services industry on the world market. However, it is worth noting that the complex formation of national financial and economic systems is not fully completed. The rapid development of the Islamic banking system since the mid-1970s has been a consequence of rising oil prices. Despite the fact that the introduction of the Islamic financial model began much later than in Iran or Malaysia, the growth of the Sharia-compliant financial industry in the GCC in recent years has been impressive. More than half of deposits in Saudi Arabia and about 40% in other GCC states are managed under sharia law1. Significant growth in Islamic finance in the GCC was achieved, among other things, thanks to state support, the scale of which varies significantly in ... Read more
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13.08.2023 (256 days ago)
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