Islamic Finance & Critical Success Factors Essay

I Would like to take this opportunity to thank solely those people who contributed their conviction and effort and provided their insight in enabling the compilation of this communicate, it is with much regret that all of their names cannot be mentioned individually here, however special mention needs to be made of genuine individuals, without whose input this report would have not been possible.Mr Baratha Devanarayana course coordinator and project supervisor of the Advanced Diploma in Business concern programme at the National Institute of Business Management (NIBM) for the support and advice given in capability structuring and format design of the report. Would also like to mention Mrs Zeti Akhtar Aziz, Governor of savings bank Negara Malaysia and Mrs Shamshed Akhtar, Governor of the State Bank of Pakistan whose knowledge and valuable insight on the Muslim pay industry as leading professionals in the field have provided the basis on which the compilation of this report has been made possible.Executive Summary Muslim pay is a financial system based on Shariah law or Islamic law which mandates the prohibition of charging or payment of interest encourages risk and profit sharing between all parties to a contract and emphasizes the need of ethical investment which contributes to the greater good of society as a whole.Islamic finance is now one of the fastest growing financial segments in the international financial system today with an estimated annual egress rate of 15 to 20%. Industry assets worldwide be currently estimated to be between $1. 3 trillion and its industry assets and overseas portfolios are estimated to reach 4 trillion in the medium term. Diverse financial products and services, progress in developing regulatory frameworks and intensify international linkages are driving industry growth.The critical success factors for Islamic finance to foster the growth of the industry, the application of these critical success factors and there p otential applicability in the Sri Lankan context will be analysed, a comparison between Islamic finance and the conventional system on some sanctioned indicators for competitiveness, social development and development finance will be made and the Sri Lankan and regional potential of Islamic finance will be analysed as the research undertaking of this adopt.The progress that has been made on certain aspects of the Islamic financial system both locally and globally, the importance of Sri Lanka fostering the growth of the Islamic finance industry are some of the issues discussed in this study. As a prelude to the research part of this study the recent developments of Islamic finance both globally and locally and the historical development of Islamic finance will be looked at to facilitate an understanding on how the system has evolved from a single fundament a few decades ago to a global industry with a global presence ventilation from the Middle East to Asia and the West.