CONCEPTUAL FRAMEWORK OF SHIRKAT (MUSHARKAH) & IT’S CONTEMPORARY ISSUES IN ISLAMIC BANKS OF PAKISTAN
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Date
2018
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UMT,Lahore
Abstract
Although, Musharakah and Mudarbah are the two primary Islamic modes of finance in Islamic banking system but the Islamic banking industry is partially failed to promote these Islamic modes of finance in its practice. The essence of Islamic banking is participation in the risks and returns of investment projects by utilizing participatory Islamic financial contracts like Musharakah. Partnership modes of financing are far better than the general trends of Islamic banks.
To achieve the level of excellence, it is compulsory for the industry to move from Shariah compliant modes like Murabaha and ijara towards participatory (Shariah based) modes like Musharakah. Musharakah still is viewed to be extremely risky. It appears to be the major reason of not practicing the Musharakah in Islamic finance. It is an essential requirement to develop risk management techniques to solve other issues related to implementation and growth of Musharakah.
The given research shed light on conceptual framework of shirkat (musharkah) & it’s contemporary issues in islamic banks of pakistan and will consider those factors that made the marginal application of Musharakah based financing by the Islamic Banks possible.