Abstract

The basis for Islamic finance lies in the Shariah. In this paper we point out the co-evolution of institutional
change and the banking expansion in Islamic countries; there are certain parallelism between the quantitative and
qualitative developments of the Islamic financing industry and the emergence of supportive institutions. There
are certain convergences of Islamic banking products and institutions towards traditional banking functioning but
keeping their principles. The Islamic financial institutions are effective instruments towards financial and
economic integration at regional and global level. The Islamic economy has also showed a lesser impact of the
global crisis than the western economy.

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