Are Pakistani Islamic Banks Really Interest-free?
The performance of Islamic banks is considered as a realistic evolution from the study of history. Islamic banking is actually the system of banking that is purely based on Islamic jurisprudence. It has become an undeniable reality, and it is evident from the increasing number of Islamic banks. The...
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| Format: | Article |
| Language: | Arabic |
| Published: |
Bahauddin Zakariya University
2022-02-01
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| Series: | Pakistan Journal of Islamic Research |
| Subjects: | |
| Online Access: | http://pjir.bzu.edu.pk/website/journal/article/61fb97f267c43/page |
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| _version_ | 1850177380054728704 |
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| author | Zubair Ahmad Moeed Ahmad Sandhu Nadeem Ahmed Sheikh |
| author_facet | Zubair Ahmad Moeed Ahmad Sandhu Nadeem Ahmed Sheikh |
| author_sort | Zubair Ahmad |
| collection | DOAJ |
| description | The performance of Islamic banks is considered as a realistic evolution from the study of history. Islamic banking is actually the system of banking that is purely based on Islamic jurisprudence. It has become an undeniable reality, and it is evident from the increasing number of Islamic banks. The discriminatory features of Islamic banking are the prohibition of riba (interest) and Profit and Loss Sharing (PLS) according to Shariah principles. The current study investigates the impact of conventional banks’ deposit rates on investment rates of Islamic banks in Pakistan. Also, the study attempts to resolve the puzzle that Islamic banking is interest-free or interest-based by using the data from Islamic and conventional banks in Pakistan from 2010 to 2016. From the analysis, it is found that the concept of Islamic banking is not much different from that of conventional banking in Pakistan. Besides, investment rates of Islamic banks are caused by deposit rates of conventional banks, but not vice versa. Furthermore, the results showed that the Islamic rates do not have any impact on conventional banks’ deposit rates. But in case of non-Islamic banks, deposit rates have a significant impact on Islamic rates which shows that different economic policies and religious factors also affect the fluctuation in investment rates. |
| format | Article |
| id | doaj-art-a3c074b4e3ce4fb7bca2b9c9504bfe5a |
| institution | OA Journals |
| issn | 2070-0326 2618-0820 |
| language | Arabic |
| publishDate | 2022-02-01 |
| publisher | Bahauddin Zakariya University |
| record_format | Article |
| series | Pakistan Journal of Islamic Research |
| spelling | doaj-art-a3c074b4e3ce4fb7bca2b9c9504bfe5a2025-08-20T02:18:58ZaraBahauddin Zakariya UniversityPakistan Journal of Islamic Research2070-03262618-08202022-02-0119261fb97f267c43Are Pakistani Islamic Banks Really Interest-free?Zubair Ahmad0Moeed Ahmad Sandhu1Nadeem Ahmed Sheikh2Assistant Professor, Institute of Management Sciences, Business Administration, Bahauddin Zakariya University, Multan.Assistant Professor, Institute of Management Sciences, Bahauddin Zakariya University, Multan.Associate Professor, Institute of Management Sciences, Business Administration, Bahauddin Zakariya University, Multan.The performance of Islamic banks is considered as a realistic evolution from the study of history. Islamic banking is actually the system of banking that is purely based on Islamic jurisprudence. It has become an undeniable reality, and it is evident from the increasing number of Islamic banks. The discriminatory features of Islamic banking are the prohibition of riba (interest) and Profit and Loss Sharing (PLS) according to Shariah principles. The current study investigates the impact of conventional banks’ deposit rates on investment rates of Islamic banks in Pakistan. Also, the study attempts to resolve the puzzle that Islamic banking is interest-free or interest-based by using the data from Islamic and conventional banks in Pakistan from 2010 to 2016. From the analysis, it is found that the concept of Islamic banking is not much different from that of conventional banking in Pakistan. Besides, investment rates of Islamic banks are caused by deposit rates of conventional banks, but not vice versa. Furthermore, the results showed that the Islamic rates do not have any impact on conventional banks’ deposit rates. But in case of non-Islamic banks, deposit rates have a significant impact on Islamic rates which shows that different economic policies and religious factors also affect the fluctuation in investment rates.http://pjir.bzu.edu.pk/website/journal/article/61fb97f267c43/pageDeposit ratesConventional banksInvestment ratesIslamic banksIslamic financePakistan |
| spellingShingle | Zubair Ahmad Moeed Ahmad Sandhu Nadeem Ahmed Sheikh Are Pakistani Islamic Banks Really Interest-free? Pakistan Journal of Islamic Research Deposit rates Conventional banks Investment rates Islamic banks Islamic finance Pakistan |
| title | Are Pakistani Islamic Banks Really Interest-free? |
| title_full | Are Pakistani Islamic Banks Really Interest-free? |
| title_fullStr | Are Pakistani Islamic Banks Really Interest-free? |
| title_full_unstemmed | Are Pakistani Islamic Banks Really Interest-free? |
| title_short | Are Pakistani Islamic Banks Really Interest-free? |
| title_sort | are pakistani islamic banks really interest free |
| topic | Deposit rates Conventional banks Investment rates Islamic banks Islamic finance Pakistan |
| url | http://pjir.bzu.edu.pk/website/journal/article/61fb97f267c43/page |
| work_keys_str_mv | AT zubairahmad arepakistaniislamicbanksreallyinterestfree AT moeedahmadsandhu arepakistaniislamicbanksreallyinterestfree AT nadeemahmedsheikh arepakistaniislamicbanksreallyinterestfree |