S&P: Profit and Loss Sharing May Begin Gaining Ground In Islamic Finance

islamic finance

ISLAMIC banks might be inching closer to applying the principle of profit and loss sharing, says Standard & Poor’s Ratings Services in a recent report.

“We’re seeing global financial systems moving toward liabilities bailing-in through the introduction of resolution regimes and the requirement that some banks set aside a certain amount of loss-absorbing liabilities,” said Standard & Poor’s Global Head of Islamic Finance Mohamed Damak.

“We believe Islamic finance might be headed in the same direction, especially since economic conditions in some core markets for Islamic finance are becoming more challenging.”

“Although profit and loss sharing has not been widely applied by Islamic banks to date for numerous reasons, we believe this will change in the next few years if and when local regulators for Islamic finance core markets--which include the Gulf Cooperation Council countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates), Malaysia, and Iran--start implementing resolution regimes.”

Send me the newsletter!

You'll love our posts In-sha Allah. Check your email to 'Confirm' subscription

Share for the sake of Allah!

Popular Articles


106 Reasons: 'Why I Converted to Islam'

Jan 31, 2015 Editors
Dubai's Islamic affairs department recently published a book in which over a 100 people…
Birds tawakkul

In Allah We Trust: What Tawakkul Really Means

Mar 13, 2015 Amena Tanveer
"At-Tawakkul ‘ala Allah" is the Islamic concept of complete reliance on Allah or…

Talbiyah: What does Labbaik Allahumma Labbaik mean?

Sep 08, 2016 Editors
Jaabir ibn ‘Abd-Allah رضي الله عنه‎‎ said, describing the Hajj of the Prophet ﷺ: “Then he…

The Right Way to do Ruqyah

Nov 18, 2014 Sister Aiysha
Jump to: Introduction Different Cures Impermissible Ruqyah Permissible Ruqyah Ruqyah is a…