Analysis of Islamic Banking in the UK

Analysis of Muslim Banking in the UKThis explore externalize testament be a hub of attention to inspect the opportunities of progress and growth as well(p) as the major challenges to Muslim banking in the UK. The UK is the hub of Moslem banking and contains importance in Moslem fiscal sector due to its ready growing Moslem population. Islamic banking is facing several(prenominal) great challenges in the UK beca manipulation the financial system is more favourable to conventional banking. There argon greater opportunities in the UK for outgrowth and growth of Islamic financial system because Muslim community is eager to take financial products and they ar imparting to spend their lives according to their religion. There is need to educate the Muslim community toward Islamic financial products servicing providers need to improve the information system within the communities and Islamic banking institution is need to last hard for survival and compete with conventional banking system in the sector of decrees and supervisions. The keywords in this explore are Islamic banking, Islamic finance, Muslim population, Muslim scholars, Islamic banking growth in the UK and Islamic banking challenges.2.0 RESEARCH signifi thunder mugce check to the figures of Office for National Statistics 2001, on that point was 1.6 one thousand thousand (2.8%) Muslims living in the United Kingdom exactly according to Home Secretary the Muslim population is increasing with high growth rate. In meet seven years thither is an increase of 40,000 Muslims in the UK and figures reached on 2 million which consist of 3.3% of full(a) UK population. There was no any facility available to Muslim community before 2000 but the Muslim population call for to spend their lives according to their faith. According to Islamic teaching interest is inviolablely prohibit in Islam and they want to take banking serve much(prenominal) as saving accounts, current accounts, home finances, damages and loan according to Islamic sharia law law. The United Kingdom is non-Muslim country and all its financial rules and regulation in favour of conventional banking. Because the Muslim community is active part of the UK delivery, on that point was need to crop up a system which is acceptable to these people. Islamic banking is started in the UK in 2003 with authorization of Financial services Authority.From 2003 to 2009 there is enough improvement and growing in Islamic banking system. Currently two main high channel conventional banks and one wholly Islamic bank are involved in Islamic banking services. moreover Islamic banking institution is still in the growth and infancy stage and Islamic banking is facing distinct challenges in this Western society such as socially, economically, fund management and regulations. With increasing popularity of Islamic banking in Western countries especially in the UK there are some difficulties in the way of Islamic Shariah law, Is lamic banking system as well as the role of Financial Services Authority and UK authorities are the critical issues. It is necessary to find out the opportunities for development and growth of Islamic banking in the UK and major challenges are faced by Islamic banking.3.0 RESEARCH OBJECTIVESThe main objectives of this proposal is to find out the opportunities for development and growth of Islamic banking in UK and challenges which are currently faced by Islamic banking in the humanness and United Kingdom specially. The main objective of this query proposal is to investigate the basic understanding of Islamic banking in community and inbanking sector because without basic understanding it is difficult to develop this financialsystem, whether there is any opportunity for growth and development in the UK and which kind of challenges is faced by Islamic banking.The objectives of the research proposal are toExamine that how important to know the fundamentals for Islamic banking for Mu slim community and service providers.Investigate that do Muslims really believe and know the difference between Islamic banking and conventional banking and what are the factors which make Islamic banking prior to conventional for Muslim community.How important in Sha riah law and its practise for Islamic finance and the role of Islamic scholars in promoting Islamic banking services and products.4.0 LITERATURE REVIEWLiterature revaluation illustrates the concept, scope and principles of Islamic banking around the globe in general and specifically in the United Kingdom. Islamic banking is a universal concept in the conventional banking, which is in practice with its many products in about of high street banks in the UK like HSBC, Lloyd TSB and as well Islamic Bank of Britain.5.0 RESEARCH methodological analysisThere are two main research paradigms positivistic and phenomenological. It is possible that diametric authors may use the alternative harm for these main paradigms in dia metrical time. The virtually commonly and alternatively used the terms are quantitative research method for positivistic and qualitative for phenomenological (Collis and Hussey, 2003). The originally the positivistic paradigm was develop in the natural sciences to study natural phenomena and it is confirmatory and deductive in nature. The phenomenological paradigm was developed in the social sciences to facilitate the researchers to research and analyze social and cultural phenomena and this approach is exploratory and inductive in nature (www.socialresearchmethods). The paradigm is very important because it gives you a right path to use the right methodology. According to Collis and Hussy (2003 p.55) Regardless of which paradigm you are employing, it is important that you pay attention to all the features, and ensure that there are no contradictions or deficiencies in your methodology?. The paradigm of this research is phenomenological because it tends to produce qualitative dat a not quantitative. The quantitative research is objective in nature that involves analysis of numerical data by applying statistical tests (Collis and Hussey, 2003). But the qualitative research is much more subjective in nature, concerned with generating theories and can be generalized in understanding of the phenomenon of challenges and opportunities of Islamic banking in UK.6.0 RESEARCH PURPOSEIslamic banking is a hot topic in Hesperian countries especially in the UK. In the UK almost 2 million Muslims community is living and they want to spend their lives according to their religion (www.guardian.co.uk). This community is well contributing to the economy of the UK due to this the UK government gives more importance in the sector of Islamic banking. Nowadays the UK is the hub of Islamic banking and most of the high street banks providing the services of Islamic window. Due to this growing demand, Islamic banking faces some difficulties and challenges in western countries. The p urpose of the study is to examine and analyze the growth and opportunities of Islamic banking in the UK.7.0 RESEARCH METHODFor this research determine, I chose to undertake qualitative research method. The qualitative method is a type of research that emphasizes the lumber of meaning in consumer perceptions and behaviours there are different criteria or techniques can be used in qualitative method such as in-depth interviews and focus groups.The most common qualitative research techniques overwhelmIn-depth interviewFocus groupCase studyDirect observation7.1 Reason for choosing In-depth interviewI chose in-depth interview technique for my qualitative research due to its unique advantages over other techniques such as focus group and questionnaires. In the way of in-depth interviews it is easy to speak to an individual and keep his attention on specific topic comparatively it is difficult in focus group interviews. There is a isthmus of time saving and reducing the hassles to take an appointment from individual. The main advantage of in-depth interview is that the interviews can be easily conducted with key community leaders through that researcher can get a fast overview of a community according to his requirements.7.2 Sources of data7.2.1 Primary dataThis research is based on a study of the UK because growing population of Muslims community is playing positive role for the UK economy. Actually most of the Muslims want to spend their lives according to their faith. In this case study it will be examined that what are the problems and opportunities in the UK for Islamic banking. I will use the qualitative method of research in this project. There are different techniques of qualitative method but according to the situation the in-depth interviews is more suitable form for this project. According to Collis and Hussey (2003) in phenomenological approach the interview questions are unstructured or semi- structured in pattern not closed(a) questions like positi vistic approach. The plan is that the researcher will prepare semi-structured questions that are helpful to take maximal information from interviewees because in closed questions it is possible that some important information will be ignored. In semi-structured interviews the researcher has an opportunity to probe various areas and to raise specific queries during the semi-structured interviews.7.3 Data collection methodsFor the collection of primary data I shall use technique of in-depth interview. The plan is to hold the eight in-depth interviews from different sectors of the society. The researcher will hold four interviews from the banks authorities such as HSBC, Lloyd TSB and Islamic Bank of Britain that will give the get ahead facts and figures about the growth, opportunities and problems related to Islamic banking with reference to shariah compliance and Governmental authorities. Two with such Muslims who already customer of the Islamic banking which will facilitate the re search through providing the information why they did take up Islamic banking, advantages and disadvantages of this system and as well about the scope of Islamic banking in UK. Two with such Muslims that are not using Islamic banking product which will helpful to investigate why they contract not taken the Islamic banking product and which factors are stopping them from these services that are according to their faith. My plan is to speak to non-Muslims that are using the Islamic banking products that will provide the best information for the growth and strong fundamentals of Islamic banking. The planned is to conduct these interviews through sending letters to banking authorities and emails to customer services department of the perspective banks to arrange an appointment. To take interviews from customers and non-customers of the Islamic banking the interviewer will use the posters advertisement in the mosques and libraries in that area where the Muslims are living in majority. T he interviews will be recorded using the voice recording machine with the permission of the interviewees. If the voice recorder is not possible then the interviewer will take notes which will be summarized with full detail and also these notes will be available on demand for further investigation.8.0 search limitationsThis research was proposed to be conducted in a very short span of 8 weeks, which forced the researchers to curtail the research from expanding in to a wider spectrum. According to the proposed planned of seven interviews it is possible that there should be some hurdle to get all information from customers of Islamic banking. In the course of research if the researcher will feel to get more widely information about the growth of Islamic banking then miniskirt open ended questionnaires will be conducted. As the research was a part of student project there where huge limitations on financial resources. Lack of financial backup congests the team, which in turn curbed the research team from dilating the research.ConclusionThe purpose of research is to find out opportunities of growth and development as well the main challenges to Islamic banking in the United Kingdom. The primary data which was collected through in-depth interviews is to match with the different opinions of the community members about the scope and future of Islamic banking in the UK. The outcomes and results of these in-depth interviews are matched with aims and objectives of the research.