International Trade under Islamic Banking

Abstract

The crucial area of this study is to identify the international trade under Islamic banking using data of period 2000-2014. Islamic banking is growing with very fast speed in Pakistan. In Dec. 2011, Islamic Banking Industry Assets reached to 641 Billion Pak Rupees and growing with the pace of more than 30 percent every year. There are two modes of financial instrument, namely; debt creating such as Murabahah, Salam and Istisna, and non-debt creating such as Mudarabah Musharakah, and Diminishing Musharakah. This research work will elaborate the working of these financial instruments along with their support in international trade.

Keywords: international trade, Islamic banks, conventional banks, imports, exports

JEL CLASSIFICATION: B23; R28