Introduction (Research Topic)

Write a phd research proposal on Islamic Finance based on uk.

Islamic banking is a subject which many non-Muslims have rarely known and understand even less. However, several UK businesses have recognized the importance of Islamic banking and finance during the trading process (Hanif 2014). The growing demand of the Islamic finance has now received full support by many countries and thus results the global development of the Islamic economy and finance in the world of commercial dealings. With decades of experience of Islamic banking and finance, the institutes have developed several products that play an instrumental role and contributed in raising their share in the market. Thus the Islamic banking products has received the global acceptance especially trade between Islamic countries. On the other part, the non-Muslim countries are likely to have indirect interaction with an Islamic bank or financial institution when an importer in an Islamic country arranges credit for the global purchase through such an institution. According to Naser, Al Salem  and Nuseibeh (2013), the principles of Islamic finance are quite capable of responding towards the need of international trade financing. This paper will explore the usefulness of the Islamic banking products in the context of international trade.

With this research, the researcher will provide a brief literature review for the understanding of the importance of Islamic finance and its emerging role in the international business. After developing the research questions, the researcher will facilitate the methodology for conducting the research with the help of the several tools and techniques.

It is difficult for the non-Islamic countries to adopt the Islamic law for the need of modern commerce (Abedifar, Molyneux and Tarazi 2013). It is problematic to follow the Islamic finance to that financial institute who has already followed the guidelines of the national legislation. To attain the competitiveness, Islamic financial institutions have developed several products. However, it is imperative that services and financial instruments need to develop on a regular basis. In the development process, majority of the institute are facing challenges in compliance with Sharia.

The aim of the research is to explore the prominent role of the Islamic Banking Products which are directly influence on the international trade in different countries.

Thus the objectives of the research are as follows:

• To identify the salient characteristics of Islamic finance
• To identify the beneficial aspects of  Islamic banking activities over the conventional bank
• To understand the role of the Islamic financial products in the context of the international finance

To meet the research objectives, the researcher need to address the couple of questions of the research:

• What are salient characteristics of Islamic finance?
• How does the Islamic banking activity beneficial over the conventional bank?
• How do Islamic financial products help to the international trade?

Based on the conventional Islamic laws, the Islamic finance was first conceptualized in the early 1890s (Iqbal and Molyneux 2016). Later the several principles of the Islamic finance have been following in different financial institutions such as bank, capital markets and many other financial institutions. By 1977, the emerging number of Islamic banks has made formulation with the “International Association of Islamic Banks” for the facilitating cooperation between banks from different parts of the world. Now the system of the Islamic bank has been acquired assets of US$55-$90 billion (Abedifa et al.2015). There are more than hundred “interest free” Islamic banks presently active in the international market such as countries like Malaysia, Singapore, India, China and many other countries (Venardos 2012).

Problem Statement

By following the guidelines of Syariah, Islamic banking system has followed the legal and ethical rules in their different banking activities. The main product used in the contemporary cross-border Islamic trade finance is the “murabaha contract” (Hassan, Kayed and Oseni 2013). This product is normally defined as the process by which the bank buys goods on the request of client which are sold at the negotiated price to them (Uppal  and Mangla 2014). Generally, all the payments are made through the installments following the deferred payment basis. This arrangement is called “cost-plus-profit contract” where the financial institute no longer shares the revenues, rather it assumes capacity of a classic financial intermediary. Istisna, another type of forward sale contract of Islamic finance instruments, generally buy a project that is under construction and will be accomplished and delivered on the future date (Abdul-Rahman 2014). It was previously assumed that “Murabaha contract” would play an active role in the field of corporate financing. However, evidence suggests that most funds of Islamic banks are in fact employed in several businesses, rent and leasing (“ijara”) activities which offer fixed returns for the bank (Hoggarth 2016).

The modern “murabaha contract” experiments number of possible Islamic alternatives to Western trade financing using “interest-based letters of credit” (Imam and Kpodar 2013). On the other hand, the Islamic financial institution on behalf of the buyers pays for goods in full in advance and Salam, the “forward contract” is delivered in future. The biggest advantage of the trade settlement for Islamic bank is that the cash or security movement can occur in several ways such as “cash in advance” or “prepayments”, “documentary credits”, “documentary collections” and “open account”( Hossain 2016). Moreover, the Islamic banks are often used contracts which provides the global safety and security which helps to establish the global client base. In order to secure the financial liability, the Islamic bank has provided a complete safeguard by the use of the contracts like “Wadia”, “Hiwala”, “Kafala” and “Rahn”.  It has been observed that the nominal legal basis may be the conventional contract of “murabaha” in the context of “import-export financing” (Gundogdu and Gundogdu 2016). However, the complexity of the international activities involved lies in “fresh interpretations” of the basic texts of “Shariah” in place of the establishing economic and social climate.

To conduct this research in a systematic manner, the researcher will follow a conventional research framework where different techniques and tools have been used in this section. Generally, the researcher approaches several techniques to gather information related to the research topic such as “surveys”, “interviews”, “public research” and many other research techniques (O’Leary 2013). Thus the selection of the appropriate research technique is indeed a significant mater which certainly helps to address the research objectives.

Research Aim and Objectives

In this research, the researcher will choose the “exploratory research method” where the focus will be given on the discovery of unique insights and ideas as opposed to collecting accurate data (Yin et al. 2016). By this research method, the researcher will explore the role of the Islamic Banking Product and highlight the contribution in the international trade activities. Furthermore, the researcher will follow the “deductive approach” where the researcher will test theories, concepts and the fundamental ideas about the research topic.

Activities	1-2weeks	3-4 weeks	5-6 weeks	7-8 weeks
Selection of area of the research
Formulating research aim, objectives and questions
Conducting a brief literature review
Collection of data analysis
Conclusion of the research

It is important to accomplish the research within the schedules time frame (O’Leary 2013). After accomplishing the fundamental steps, the researcher will get the comprehensive outcome of the research. The research topic is primarily selected at the initial stage of the research. After this, the researcher will formulate the aim and objectives of the researcher. Based on the objective of the researcher, the research will construct a couple of questions which needs to be articulate during the process. In the second part of the researcher explores the detail analysis to understand the impacts of the Islamic banking products in the context of the international trade. After the detailed literature review, the researcher will follow the systematic research method in the methodology section of the research. However, more data will be needed for detailed analysis. Thus the brief data analysis will be conducted in the data analysis chapter of the research. In this chapter, the “secondary research method” will be followed for analyzing and evaluating the gathered information of the research.  After the analysis, the research will complete the task and the objectives of the research will be addressed. In this way, the researcher will follow the systematic process to conduct the research successfully.

According to Ciarocco (2016), “Success of conducting research depends over the outcomes that are gained by the researcher at the end of the research”.  Thus the researcher needs to collect and analysis adequate data and information in the section of the research. The research will follow the “mixed data collection method”. The data related to the research topic will be accumulated or gathered by following the “observing methods” and “in-depth” interviews”. All these approach will be incorporated under the primary data collection method. This method will help to establish direct communication with the key respondents and can observe different opinion about the significance of the Islamic finance and related products of the Islamic financial institutions (Palinkas et al. 2015). On the other hand, the prior history of Islamic finance can be explored by the “secondary data collection method”.

Research Questions

In this research, the researcher will analysis both “primary and secondary” information in order to evaluate the prominent role of Islamic Banking Products to help the international Trade. In the primary data collection method, the researcher will conduct the “in-depth interviews” and “survey questionnaires” to the Islamic banking professionals associated members of “International Association of Islamic Banks”. On the other hand, the data will analysis by the researcher which are already gathered from the research publications, books, financial reports, articles in the “secondary research section”.

By the end of the research, the researcher will gather information about the role of the contemporary Islamic banking products in the context of the international business. After the completion, the researcher will get knowledge about the several products of Islamic banking which are played a significant role in the cross-border transactions in the context of the international business.

References

Abdul-Rahman, Y., 2014. The Art of RF (Riba-Free) Islamic Banking and Finance: Tools and Techniques for Community-Based Banking. John Wiley & Sons.

Abedifar, P., Ebrahim, S.M., Molyneux, P. and Tarazi, A., 2015. Islamic banking and finance: recent empirical literature and directions for future research. Journal of Economic Surveys, 29(4), pp.637-670.

Abedifar, P., Molyneux, P. and Tarazi, A., 2013. Risk in Islamic banking. Review of Finance, 17(6), pp.2035-2096.

Ciarocco, N.J., 2016. of Resource Assignment: Presenting a Research Proposal.

Gundogdu, A.S. and Gundogdu, A.S., 2016. Exploring novel Islamic finance methods in support of OIC exports. Journal of Islamic Accounting and Business Research, 7(2), pp.78-92.

Hanif, D., 2014. Differences and similarities in Islamic and conventional banking. International Journal of Business and Social Sciences, 2(2).

Hassan, M.K., Kayed, R.N. and Oseni, U.A., 2013. Introduction to Islamic banking and finance: principles and practice. Pearson Education Limited.

Hoggarth, D., 2016. The rise of Islamic finance: postâ€Âcolonial marketâ€Âbuilding in central Asia and Russia. International Affairs, 92(1), pp.115-136.

Hossain, A.A., 2016. Inflationary shocks and real output growth in nine Muslim-majority countries: Implications for Islamic banking and finance. Journal of Asian Economics, 45, pp.56-73.

Imam, P. and Kpodar, K., 2013. Islamic banking: how has it expanded?. Emerging Markets Finance and Trade, 49(6), pp.112-137.

Iqbal, M. and Molyneux, P., 2016. Thirty years of Islamic banking: History, performance and prospects. Springer.

Naser, K., Al Salem, A. and Nuseibeh, R., 2013. Customers Awareness and Satisfaction of Islamic Banking Products and Services: Evidence from the Kuwait Finance House (Note 1). International Journal of Marketing Studies, 5(6), p.185.

O’Leary, Z., 2013. The essential guide to doing your research project. Sage.

Palinkas, L.A., Horwitz, S.M., Green, C.A., Wisdom, J.P., Duan, N. and Hoagwood, K., 2015. Purposeful sampling for qualitative data collection and analysis in mixed method implementation research. Administration and Policy in Mental Health and Mental Health Services Research, 42(5), pp.533-544.

Uppal, J.Y. and Mangla, I.U., 2014. Islamic Banking and Finance Revisited after Forty Years: Some Global Challenges. Journal of Finance.

Venardos, A.M., 2012. Islamic Banking and Finance in South-East Asia: Its Development & Future (Vol. 6). World Scientific.

Yin, Z., Valdez, A., Mata Jr, A.G. and Kaplan, C., 2016. Developing a field-intensive methodology for generating a randomized sample for gang research. Free Inquiry in Creative Sociology, 28(1), pp.81-90.