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ABSTRACT
The main objective of the study is to analyze critically the Islamic banking system of Bank Muscat in Oman. The research is mainly based on secondary data collected from the bank. The data gap is filled by the primary data collected through personal interviews with the office bearers of Bank Muscat in Buraimi, Oman. The study reveals that the Bank Muscat has a special line of Islamic banking products and services. Islamic Banking Management at Bank Muscat is a highly professional body. The Islamic Banking Management extends consultations for planning and provides appropriate solutions to the problems as and when arise. The Islamic Banking Management develops Islamic banking activities in accordance with their business plans and strategic trends. The Bank Muscat provides loans and investment to their personal and business customers in addition to everyday banking transactions. Bank Muscat has the ultra modern banking facilities with best service standards and highly qualified male and female professionals.
Keywords: Islamic, banking, products, services.
1.INTRODUCTION
Islamic banking is a banking system that is consistent with the principles of Sharia and its practical application through the development of Islamic economics. A more appropriate term for 'Islamic banking' is 'Sharia compliant Finance'. There are two basic principles behind Islamic banking are the sharing of profit and loss and, significantly, the prohibition of the collection and payment of interest. Collecting interest is not permitted under Islamic law. Sharia prohibits the fixed or floating payment or acceptance of specific interest or fees (known as riba, or usury) for loans of money. Investing in businesses that provide goods or services considered contrary to Islamic principles is haraam (sinful and prohibited). Due to lack of Islamic practice these principles have been applied in varying degrees by historical Islamic economies. In the late 20th century a number of Islamic banks formed to apply these principles to private or semi-private commercial institutions within the Muslim community. Having access to banking products which are Shari'a compliant is important for many people in Oman and beyond. This is why Bank Muscat has designed a special line of Islamic products and services, ranging from everyday banking transactions to loans and investment for personal and business customers.
An early market economy and an early form of mercantilism, called...