Abstract
This research aims to determine the viability for the operation of Islamic banks within the Omani banking system. By looking into various opportunities for Islamic banking in Oman and given the unique rules on transactions (fiqh muamalat) of Islamic banking based on the Shariah precepts or the so-called Islamic law. As the establishment of small and medium enterprises (SMEs) is rapidly growing in Oman, many SMEs can draw support from Islamic banks. The study used a mixed method approach to answer the research questions. Do the participants patronize Islamic banking over conventional banking?. The study compared both conventional and Islamic Banking. The population of the study represented bank officers, bank employees and customers. The sample of the study (n=100) participated in the survey. Another selected sample participated in interviews. Findings revealed different views over Islamic banking. Islamic banking is careful to provide products and services. Also, they are found to be capable of offering products and processes that answers the need of certain aspects with a risk management framework that is distinct from what normal banking provides. The study findings support the need for Islamic banking systems as it would be easier to spread Islamic banking and financing.
Highlights
For many years, the basic principles of economics and society have been challenged by the Muslim faith especially capitalism, where the Muslim faith tries to expose the different weaknesses of capitalist societies
The significant components of Sharia include the prohibition of charging Riba, or interest that comes from loan money (Siddiqi, 2004; Kpodar & Imam, 2010), and application of Gharar that comes from contractual ambiguity especially in onerous contracts
By looking into the concept of Islamic banking, the general business condition in Oman, the product and services it offers, as well as the corresponding risks involved in establishing relationships with Islamic banks, this paper investigates on the opportunities for Islamic Banking in Oman
Summary
The basic principles of economics and society have been challenged by the Muslim faith especially capitalism, where the Muslim faith tries to expose the different weaknesses of capitalist societies. Since their liberation, Muslims have carried on their faith through various undertakings for which they have become successful participants of societies. The significant components of Sharia include the prohibition of charging Riba, or interest that comes from loan money (Siddiqi, 2004; Kpodar & Imam, 2010), and application of Gharar that comes from contractual ambiguity especially in onerous contracts. The extent of these prohibitions includes avoidance of establishing businesses that is involved in selling forbidden goods and services such as alcohol and gambling
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Islamic Banking and Finance Research
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
