Islamic finance: current position and its future on the traditional finance market

Abstract

The objective of this research is to get to know the core principles and concepts of Islamic financial system and to analyze its appearance in non-Muslim coun-tries in order to see the perspectives of Islamic banking on western market. The reason of choosing such topic is explained by rapid growth of Islamic financial institutions in both Muslim and Western countries.

This research includes introduction of the main types of contracts of Sharia-based banking, comparison those to ones used in conventional banks; analyz-ing the risks that face Islamic financial institutions in western countries, nuances of the regulation and, in the end, propagation of Islamic banking through the world.

The result of the research shows that Islamic financial institutions have the tendency to spread further in Europe and in Russia. That means financial authorities and traditional banks of those countries have to be prepared to such innovation and be ready to face some obstacles.

The area of Islamic banking is not explored in depth. That is why the problem of lack of relevant information was faced during that research. the research method used, the research material, results and conclusions.

Academic articles, books, web sources and presentations were used as sources. All the sources are carefully chosen due to the excess of irrelevant information about the research field.