publication . Article . 2014

Proper Implementation of Partnership Facilities in Islamic Banking Using Project-Based Funding

Mohammad Naghi Nazarpour; Yahya Lotfinia;
Open Access Persian
  • Published: 01 Oct 2014 Journal: تحقیقات مالی اسلامی (پیوسته), volume 4, issue 1, pages 107-134 (issn: 2251-8290, eissn: 2588-6584, Copyright policy)
  • Publisher: Imam Sadiq University
Abstract
One of the strong points of Islamic banking, compared to conventional banking system, is the bank's sharing of both profits and losses of funded activities in the framework of collaborative agreements. The proper implementation of partnership facilities requires respecting religious as well as financial and economic codes. As shown by the evidence, the objections made against the activities of Islamic banking in granting partnership facilities confirm banks’ inability to respect the religious and legal codes of such facilities. Therefore, proposing methods to help Islamic banks implement partnership facilities properly has always attracted the attention of Islamic financing experts. One of the markets that can assist banking systems in the proper implementation of partnership facilities is capital market. This descriptive-analytical study was carried out using library resources. It aimed at verifying this hypothesis: “Project-based funding can assist banks in the proper implementation of partnership facilities through the three stages of demand assessment, monitoring and implementation, and audition and clearance.” In fact, this type of interaction between project-based funding and Islamic banking not only facilitates banks' participation in various economic sectors in order to grant participation facilities, but also prepares the ground for the funds to collect money through charging for banking services.
Subjects
free text keywords: capital market, islamic banking, participation facilities, project-based funding, lcsh:Islamic law, lcsh:KBP1-4860, lcsh:Finance, lcsh:HG1-9999
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