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Three ideal types that emerged from the data, the virtuoso, pragmatist and sceptic, are a used as a heuristic device to characterise the various interests driving trust in Islamic banking, and illustrate the heterogeneity of Islamic banking practices.
An example that can be seen is that equity financing is used instead of debt financing.
Furthermore, instead of giving a fixed interest rate on the savings account, Islamic banks offer a share of the bank's profit, as a return on deposits and The early seventies saw the institutional involvement.
Islamic banking, a niche financial sector that has captured the imagination of the financial elite and ordinary consumers alike, is unique in its regulation through the shariah.
Primarily, it presents an added-value derived from its prohibition of riba (interest) in favour of profit from trade (al Bay) or leasing (ijarah).
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Islamic banking is based on the Muslim precept that interest, riba, is prohibited.In the case of Bank Islam, this means the indigenous needs of the Muslims.INTRODUCTION The basic concept of Islamic banking which is also known as 'interest-free banking' is based on basic ethical standards with just one main difference- Muslims are not allowed to pay or receive interest.First, for those who perceive and are attracted to the added value of Islamic banking, trust in the shariah regulation and expertise, as underwritten by the state, is the first condition to their choice.Trust lubricates their choice by reducing complexity, mitigating risk and bridging the gap between knowledge and faith.This study views the aforementioned circumstances that consumers find themselves in, on the one hand, and the banking practices they participate in, on the other, as interacting elements of a socially determinate whole.Trust, I suggest, is the common thread underpinning the everyday banking practices within the interacting elements of a socially determinate whole.Last, the study notes that shariah regulation has contradictory corollary effects: it is both functional and dysfunctional.Whilst it functions in enabling the growth of Islamic banking, it also contributes to social fragmentation within Malaysian society.In 1983 an Islamic Bank named Bank Islam was established in Malaysia.This was the first Islamic bank to be supported by a Government and be legislatively accommodated within a mixed financial system.