Answer to Question #111378 in Finance for abdelrahman

Question

Do the cultural and social economic contexts of countries influence the decision making in
banks

Answer 1

Yes, the cultural and social economic contexts of countries is influence the decision making in

banks. For example, Islamic banking (English islamic banking, Arabic. مصرفية إسلامية) - banking activities consistent with the principles of Sharia, and its practical application through the development of the Islamic economy. A more correct term for Islamic banking is financial activity based on Sharia principles.

Sharia prohibits the receipt of a fixed interest or interest for the provision of a loan (known as “riba” or usury), regardless of whether the loan payments were fixed or floating. Investing in enterprises that provide goods or services that are contrary to Islamic principles (eg pork or alcohol) is also haraam (“sinful and forbidden”). Despite the fact that these prohibitions have historically been applied to some extent in Muslim countries and communities to prevent non-Islamic practices, only in the late 20th century were several banks founded to apply such principles to private or semi-private commercial institutions in Muslim society.