Comparative analysis of Islamic banking to Maltese conventional banking

Abstract

Islamic banking is one of the fastest growing financial sectors and refers to banking activities that are complying with the principles of the Shariah law, contradictory to conventional banking we are accustomed to. With the majority of Islamic banks in the EU based in the UK, following Brexit, Malta may have the opportunity to be able to compete in a large market, using its geographical position to bridge between North Africa and Europe. The study attempt to understand the fundamental nature of Islamic banking. An attempt is made to highlight the main differences between Islamic banking in comparison to conventional banking. The principles of Islamic banking are contrasted to conventional banking principles in order to establish whether it would be necessary to establish a complete new secure regulatory framework specifically for Islamic banking or else include exceptions for Islamic banks in the current Maltese regulatory framework.