Constraints in the Application of Partnerships in Islamic Banks: The Present Contributions and Future Directions

Business & Economic Review: Vol. 6, Issue 2: 2014 pp. 47-62

16 Pages Posted: 30 Apr 2016

See all articles by Muhammad Nouman

Muhammad Nouman

University of Agriculture, Peshawar

Karim Ullah

Institute of Management Sciences - Peshawar

Date Written: October 2014

Abstract

Partnership is considered as the essence of Islamic banking. Therefore, Islamic banks are supposed to rely on the partnership contracts for acceptance of deposits and investment of funds. In practice, Islamic banks adopt partnership contracts for accepting deposits. However, these are rarely used while investing. Islamic banks rely heavily on non-partnership contracts for investment of funds all over the world. The present paper provides a critical review of the extant literature on the rare use of partnership contracts by Islamic banks for investment purposes. This review highlights the contributions that extant literature has made to the current knowledge about the constraints in the application of partnership contracts in Islamic banks. From this review, concentrations of research efforts are identified and directions for future research are proposed.

Keywords: constraints, partnership, contracts, Islamic bank

Suggested Citation

Nouman, Muhammad and Ullah, Karim, Constraints in the Application of Partnerships in Islamic Banks: The Present Contributions and Future Directions (October 2014). Business & Economic Review: Vol. 6, Issue 2: 2014 pp. 47-62, Available at SSRN: https://ssrn.com/abstract=2772563

Muhammad Nouman (Contact Author)

University of Agriculture, Peshawar ( email )

Peshawar
Peshawar, Khyber Pakhtun Khwa 25000
Pakistan

Karim Ullah

Institute of Management Sciences - Peshawar ( email )

Sector E-5, Hayatabad, Phase VII
Hayatabad
Peshawar, KPK 25000
Pakistan

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