Islamic Financial System

What is the definition of Islamic banking?

• Islamic banking is a banking system based on the principles of Hindu law

• Islamic banking is a banking system based on the principles of Buddhist law

• Islamic banking is a banking system based on the principles of Jewish law

• Islamic banking is a banking system based on the principles of Islamic law (Sharia) and guided by Islamic economics.

Explain the structure of the financial system in Malaysia.

• The financial system in Malaysia is structured with a central bank, commercial banks, and fast food restaurants.

• The financial system in Malaysia is structured with a central bank, commercial banks, and car dealerships.

• The financial system in Malaysia is structured with a central bank, commercial banks, Islamic banks, insurance companies, and capital market institutions.

• The financial system in Malaysia is structured with a central bank, commercial banks, and clothing stores.

Discuss the development of Islamic banking in the modern era.

• Islamic banking has not seen any development in the modern era

• The development of Islamic banking is solely due to the influence of Western banking systems

• Islamic banking in the modern era is based on interest-based financial products

• Islamic banking in the modern era has been developed through the establishment of Islamic financial institutions, introduction of Islamic financial products and services, and adoption of Islamic finance principles by conventional banks.

What were the banking practices in the age of Prophet (SAW) and His Immediate Companions?

• Encouraging high interest rates

• Based on Islamic principles such as prohibiting interest (riba) and promoting risk-sharing and ethical investment.

• Allowing unethical investment practices

• Promoting individual profit at the expense of others

How does Islamic banking differ from conventional banking?

• Islamic banking focuses on maximizing profits at any cost

• Islamic banking operates on the principles of Shariah law, which prohibits the payment or receipt of interest, and focuses on ethical and socially responsible investments.

• Islamic banking does not follow any specific principles

• Islamic banking allows the payment and receipt of interest

What are the key principles of Islamic finance?

• Unlimited interest rates

• No ethical standards

• Debt-based financing

• The key principles of Islamic finance include prohibition of interest (riba), risk-sharing, ethical and moral standards, and asset-backed financing.

Explain the role of Shariah compliance in Islamic banking.

• Shariah compliance has no role in Islamic banking

• Shariah compliance is only for show and does not impact Islamic banking operations

• Shariah compliance ensures that Islamic banking operations and products adhere to Islamic law (Shariah) principles.

• Shariah compliance is only necessary for non-Muslim customers

Discuss the challenges faced by Islamic banking in the contemporary world.

• Consider the impact of globalization, regulatory challenges, lack of standardization, and limited product offerings.

• Impact of climate change on Islamic banking

• Technological advancements in Islamic banking

• Increased government support for Islamic banking

What are the major Islamic financial instruments used in the market?

• Mudarabah, Musharakah, Murabaha, Ijarah, and Sukuk

• Stocks, Bonds, Mutual Funds, ETFs, and Options

• Bitcoin, Ethereum, Litecoin, Ripple, and Cardano

• Real estate, Commodities, Precious metals, Forex, and Cryptocurrency

Explain the concept of profit and loss sharing in Islamic banking.

• In Islamic banking, profit and loss sharing refers to the bank keeping all the profits and the customer bearing all the losses.

• In Islamic banking, profit and loss sharing refers to the customer keeping all the profits and the bank bearing all the losses.

• Profit and loss sharing in Islamic banking means the bank takes all the profits and the customer has no share in the losses.

• In Islamic banking, profit and loss sharing refers to the sharing of profits and losses between the bank and the customer.