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Bitcoin in Islamic Banking and Finance

Bitcoin in Islamic Banking and Finance

AAOIFI realised the shortage of professional work force in Islamic financial institutions, and in 2008 started two certified programmes to enhance the skill level of Islamic financial institutions’ staff: Certified Islamic Professional Accountant (Islamic accounting), and Certified Sharīʿah Advisor and Auditor (Sharīʿah supervisory). Some other educational institutions that were found to be playing an important role in educating, organising seminars, publishing journals and research papers on Islamic banking relevant issues included: Durham University in the UK, International Islamic University in Pakistan, International Islamic University in Malaysia, and King Abdul Aziz University and Islamic Research Training Institution (IRTI) in Saudi Arabia. However, Hasan (2008) has pointed out that the publications from the Islamic Research Training Institute in Saudi Arabia were generally more informative than analytical or evaluative. Furthermore, his analyses also showed that the structure of the PhD programme at International Islamic University Malaysia was not satisfactory. There were also a lot of reservations about the requirements and qualifications for the post of Sharīʿah scholar. Some considered that the scholar’s experience of giving fatwa was more important, and some emphasised a background in Islamic studies or legal qualifications. The point to mention here is that leading Islamic finance scholars are planning to prepare global certification for Sharīʿah scholars, which will make it easier for banks to find qualified advisers. This step should increase consumer trust among those (such as conventional bank users in Malaysia, Pakistan, Saudi Arabia, UAE and UK) who are currently neutral or disagree with the statement that Sharīʿah advisory board members are competent to give authentic advice. In order to create deep-rooted
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Journal of Finance and Accounting

Journal of Finance and Accounting

Reference [33] ascertained a CV of board gender diversity in the US banking sector of 90.90 percent. Reference [34] studied effects of board structure on the financial institutions in Kenya found CV of 73.85. Reference [35] evaluated board characteristics of the Fortune 500 firms and found firm size had a CV of 0.7022 which translate to 70.22 percent. Reference [25] evaluated impact of board gender diversity on the performance of listed firms from 47 different countries globally found CV of 116.76 percent. From these studies, the least study had a CV of 41.25 percent in Hong Kong and the highest had 116.76 percent in globally sampled countries. Table 1 shows the descriptive analysis of board gender diversity of the Kenyan commercial banks for the year 2008 to 2017.
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Micro Finance for Women Empowerment- Role of Banking Sector in Karnataka

Micro Finance for Women Empowerment- Role of Banking Sector in Karnataka

arrangements. However, the full accounting of individual freedom goes beyond the capabilities of personal living. For example, if we do not have the courage to choose to live in a particular way, even though we could live that way if we so chose, can it be said that we do have the freedom to live that way, i.e. the corresponding capability? Another important point made by Sen (1990) is that for measurement purposes one should focus on certain universally-valued functioning, which relate to the basic fundamentals of survival and well-being regardless of context. Taking the example of universally valued functioning like proper nourishment, good health and shelter, Sen asserts that if there are systematic gender differences in these very basic functioning achievements, they can be taken as an evidence of inequalities in underlying capabilities rather than differences in preferences.
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Synergistic Development of Accounting, Finance and Government in the Chaotic Environment: Integrated Reporting, Money Theory and Financial Crises Diagnostic

Synergistic Development of Accounting, Finance and Government in the Chaotic Environment: Integrated Reporting, Money Theory and Financial Crises Diagnostic

Conducted by J. Stiglitz analyzes the causes and consequences of financial crises have allowed the author to assert [2] that in all cases, there is a common component: financial sectors behaved very badly and failed to assess creditworthiness and manage risk as it is expected from them. The banking system is a major player in the money market and, therefore, globalization and modern society integration, which contributed the fundamentally new requirements for monetary policy formation in the individual countries and international financial institutions, led to the need for improvement. As Sheng E. said [6] the growth banking system past, based on retail deposit products, systems whose activity was directed on funding credit needs, borrowers become a Difficult ground and Global ground chain supply under this risks destabilizing in form "effect CTU domino" that can be compared to those that took place in Japan spring last year.
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A comparative analysis between two system calendars in Islamic banking system

A comparative analysis between two system calendars in Islamic banking system

Concussively, profit earned by the bank using IC in IHF is lesser than profit earned by using GC. Ideally, when applying IC in the banking system, the calculation would be more lower for the zakat payment. This is because the calculation of zakat is shorter than in IC compared to GC. Indeed, using IC for the basis of zakat payment is more appropriate due to shariah compliant procedures in yearly zakat calculation. As explained by Saksono [25], the practice of Islamic finance nowadays is actually flawed because it ignores the IC as the basis of accounting and zakat calculation. The issue zakat deficit payment have become a serious problem and to Muslims, it is a spiritual debt to the Al Mighty. This is a collective debt which Muslims have to pay and unfortunately it is not well aware globally.
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Bitcoin in Islamic Banking and Finance

Bitcoin in Islamic Banking and Finance

In this way, a BMS can be seen as an accounting system. BMSs like Bitcoin exist as myriad copies of a piece of software that run on users' computers, communicate with each other over the Internet, and have copies—that are updated approximately every ten minutes—of the history of every transaction that has been completed within the system since its inception. If anyone's transaction history differs from others' it is considered to be incorrect and it is replaced with a copy of the correct record. To subvert the system, one would need to control more than half of the entire network and to corrupt the record in precisely the same way across that majority. (Nakamoto 2008) When discussing Bitcoin, the capitalized term (Bitcoin) refers to the software and the network of users, and the lower-case (bitcoin) refers to the unit of account in the system. Here, XBT—following the standard for currency abbreviations defined by ISO 4217 (International Organization for Standardization 2008)—is used interchangeably with bitcoin. Pluzhnyk & Evans (2014) approach the Bitcoin system as a provider of transaction confirmation services and treat XBT as liabilities of that service provider that are used as a medium of exchange and sometimes as a store of value. Given that the system is self-contained, all of the conventional balance sheet accounts—on the asset side: cash, accounts receivable, inventory, fixed assets; on the liabilities side: accounts payable, notes payable, long-term debt, paid-in capital—are equal to zero. Nonetheless, markets for XBT are active 24/7 with no breaks for holidays, and the market cap for Bitcoin can be calculated from the most recent price and the total amount of XBT in existence. This value currently is measured in the billions of USD. Considering that these XBT liabilities have market value, it holds that the Bitcoin system must hold some asset of equivalent value. Pluzhnyk & Evans (2014) invoke goodwill to describe this intangible asset, and argue that it derives from users' expectations of Bitcoin's usefulness in future transactions. Evans (2014a) notes that the current market value (P) of XBT is driven by users ‘continually updated expectations concerning three factors: the value of future services and cost savings (F) enabled by Bitcoin; the market consensus of the appropriate discount rate (r), which includes ever-changing premiums for myriad sources of perceived risk; and the time (T) until Fis realized, such that:
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Journal of Finance and Accounting

Journal of Finance and Accounting

In the study on the impact of liquidity on profitability for 10 listed IT companies of Poland for the 2003-2011 period found a statistically positive significant relationship of receivable collection period, and inventory conversion period with profitability [27]. While the another study on the 8 listed trading companies of Sri Lanka for the 2008- 2012 periods found a significant relationship between liquidity and profitability. The study observed that the current ratio had a significant correlation with return on assets and return on equity and quick ratio was only significant with return on assets while liquidity ratio was insignificant with both of the return on assets and return on equity [28]. But in the study of liquidity –profitability relationship in Bangladeshi banking industry found no significant relationship between liquidity and profitability over the period [29] while [27] found a positive relationship of receivable collection, inventory conversion period with profitability such as return on assets (ROA), return on equity (ROE), and the return on sales (ROS).
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Bitcoin in Islamic Banking and Finance

Bitcoin in Islamic Banking and Finance

When investigating the CG framework under legal and regulatory compliance of the two banking streams, all the national and international regulations that govern CB1 is also applicable to IB1. But all the regulations that govern IB1 are not applicable to CB1. IB1 is required to follow the directives and standards issued by the Central Bank Sri Lanka, Accounting and Auditing Organizations for Islamic Financial Institutions (AAOIFI) and Islamic Financial Service body (IFSB), whilst CB1 is only subject to follow the directives issued by Central Bank and they are not governed by AAOIFI or IFSB. This is due to the fact that AAOIFI and IFSB are international bodies that regulate only the Islamic FIs. Therefore, the research authenticates that all the national and international regulations that are applicable to CBs are also applicable to IBs. Unlike CBs, IBs are required to follow the regulations that are applicable to Islamic financial institutions. Further when analyzing the taxation regulations and its implications, CB1 is subject to corporate tax and other taxes that charged on a commercial bank. IB1 has a similar taxation treatment as CB1 as IB1 also subject to current tax, deferred tax, value added tax on financial services and economic service charge. Though IB1 subject to every tax implications as CB1, additionally they are charged with a tax called the Zakat Tax. The explanation for charging Zakat tax on IB1 is to ensure the equal distribution of wealth among the various groups in society. Further, IB1 has a separate fund called Zakat fund to accumulate the Zakat tax of the bank. IB1 distributes this fund to the poor in the society through religious institutions with an aim to achieve its motives of ensuring fairness and social justice to Islamic community. CB1 is only subject to corporate business tax and they are not entitled to Zakat tax as IB1. Findings suggest that IBs are also subject to the provision of tax legislation that are relevant to CB1 and thus additionally to Zakat tax.
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The Performance Of Finance And Competitiveness: Study On Banking And Finance Company In Indonesia

The Performance Of Finance And Competitiveness: Study On Banking And Finance Company In Indonesia

The Impact of Leverage toward Banking Competitiveness Statistic test result with t-test shows that leverage variable has negative impact and significant to bank competitiveness. The meaning is the increase leverage will decrease bank competitive. It is because bank debt mostly is the saving of the third party like what commonly happens in banking so that the debt becomes investor consideration in evaluating competitiveness based on market performance. The term lever is taken from mechanic lever that makes us able to lift a load more than if we do it alone. The meaning of leverage itself literally is lever. Lever is usually used to help lifting a heavy load. According to Horne & Wachowics (2012) the use of leverage is meant to increase (lever up) profitability. Other definition of leverage according to (Syamsudin, 2001) is: company ability to use assets or funds that has a fixed load to increase income level of company owner. Based on those definition it can be concluded that leverage is a company ability level in using assets and or fund that has fixed debt (debts or special stock) in order to create company goal increasing income level for the company owner. Leverage policy appears if company in paying its operational activity uses loan fund or fund that has fixed load like interest. By increasing leverage level, the certainty level of return gained will be higher. However, at the same time, the higher leverage level, the higher risk faced and the higher return or income level expected. However, institution ownership does not moderate the relation between leverage and competitiveness of banking in Indonesia because institution ownership does not function as external control mechanism, only as external institution investor that has expectation in banking stock return in Indonesia.
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Constructing meaning in the service of power : an analysis of the typical modes of ideology in accounting textbooks

Constructing meaning in the service of power : an analysis of the typical modes of ideology in accounting textbooks

According to Arnsperger and Varoufakis (2006) neo-classical economics is characterized by methodological individualism and methodological instrumentalism: In terms of individualism, Arnsperger and Varoufakis (2006) argue that neo-classical economics maintains “the idea that socio-economic explanation must be sought at the level of the individual agent”. As Tinker et al. (1982, p.182) note, neo- classical economics expresses “a shift away from macroscopic problems… towards a microscopic emphasis on the behavior of individuals”. In terms of instrumentalism, Arnsperger and Varoufakis (2006) state that neo-classical economics assumes “all behavior is preference-driven or, more precisely, it is to be understood as a means for maximising preference-satisfaction”. Further, “agents’ current preferences are separate from the structure of the interaction in which they are involved” (Arnsperger and Varoufakis; 2006: see also, Cooper, 1980). According to Berle (2007, p.39) neo-classical economics assumes that corporations have “the same motivations and [act] in the same way as the classical entrepreneur- businessman” or individual agent – i.e. they are preference, or more specifically, profit driven. It is, in part, these axioms which, according to Tinker et al. (1982, p.183), maintain the neo-classical assumption “that maximizing behavior by economic agents… [leads] to the maximization of social welfare”. The implausibility of this assumption, in relation to agents and markets, is succinctly and robustly addressed by Gray et al. (1996, p.17). According to Hogler and Hunt (1993, p.178), one of the most influential manifestations of a neo-classical perspective in accounting is agency theory, extensively “shaping organizational thought and research over the past decade”. In this respect, “agency theory, with its emphasis on the separation of ownership and control… assumes that agents (managers) act in their own self-interest” (Hogler and Hunt, 1993, p.178). Due to the “inevitable divergence” between the interests of the principal (shareholder) and those of the agent (manager), “the principal is motivated to monitor the conduct of the agent and to provide incentives which align the agent’s interests with the principal’s” (Hogler and Hunt, 1993, p.178. see also Hogler and Hunt, 1990). According to Ghoshal (2005, p.80), agency theory “underlies the entire intellectual edifice in support of shareholder value maximization”.
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Essays on technical analysis in stock markets : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Finance at Massey University, Albany, New Zealand

Essays on technical analysis in stock markets : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Finance at Massey University, Albany, New Zealand

I thank Dr. Jerry Ho and Dr. Mei Qiu for all the teaching opportunities, and the School of Economics and Finance Albany administration team for all your support that made this journey enjoyable. I also thank Dr. Min Bai, Dr. Christo Ferreira, Jolyn Chen, David Jaud, Aymen Sajjad, Sarah Dodds and Fred Musika for sharing our PhD lives.

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Attributing consequences to accountancy: Pacific insights

Attributing consequences to accountancy: Pacific insights

A slump in prices about 1930 affected the viability of private trading in copra on Nikunau. As this jeopardised the import of goods that Kain Nikunau had become used to, an intervention occurred in the form of boboti. This was steered by district officer Maude but had a strong grass roots element, including in terms of capital contributed by members and administration, including accounting. By the mid-1930s, several boboti were handling virtually all the trade in goods and copra with Tarawa, whence the Burns-Philp Company controlled most of the importing into and exporting from the central and southern Gilbert Islands. Prices of goods sold were calculated by making a mark up on wholesale import prices, and copra was bought at export prices minus a discount. While it was always possible for Kain Nikunau to share profits, they were deliberately kept low through low mark ups and discounts and were appropriated for re-investment in the enterprise itself. These co-operatives were boosted by the price of copra increasing when war in Europe loomed but they collapsed when trade was halted by the Pacific War (Macdonald, 1971, 1982; Maude, 1949).
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The Philosophy of Islamic Banking and Finance

The Philosophy of Islamic Banking and Finance

In case of profit sharing modes of Islamic finance, focus would be on the profitability and rate of return of the concerned investment. Financial resources would be directed to the most productive investments. This would increase the efficiency of the financing process and also reinforce efficiency in the real sectors. In credit-purchase and leasing modes of Islamic finance, money is not given outright, but rather commodities are given in return for debt obligations. Credit expansion in the face of increasing credit-purchase of assets and commodities would be tied directly to higher demand for assets and commodities, which would have a direct bearing on aggregate supply. Consequently, credit finance under Islamic finance would be less inflationary in comparison to conventional banking and finance.
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Is the MENA banking sector competitive?

Is the MENA banking sector competitive?

Regarding H value (the sum of price elasticity: PF, PK, PL), we find that all H values in the models are less than one and greater than zero, and both hypotheses where the H value is equal to unity and the H value is equal to zero are rejected, indicating that commercial banks operating in the MENA economies were earning their revenues (total revenue to total assets and interest income to total assets) under monopolistic competition for the period of the study. The H-statistic for Table 3 varies between 0.73 and 0.83 for total revenues (TR/TA) and ranges between 0.86 and 0.90 for interest income, suggesting evidence of monopolistic competition. More specifically, Wald tests H = 0 and H = 1 for banks operating in 11 MENA economies included in the sample reject perfect and monopoly conditions of the banking industry, whilst the value of the H-statistic is also not negative. In particular, results of the Wald tests ( H = 0 and H = 1) in eight out of nine tested models confirm that banks operate under monopolistic competition, providing support for hypothesis (H1) that commercial banks in the MENA region increase revenue due to monopolistic competition. Findings of the H-statistic are in line with those in other studies in MENA economies and other emerging markets (Gunalp and Celik [23]; Hauner and Peiris [29]; Turk-Ariss [7]). A monopolistic competition structure can be considered consistent with product differentiation, in spite of their main business being fairly similar.
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Islamic banking and finance in Nigeria: issues, challenges and opportunities

Islamic banking and finance in Nigeria: issues, challenges and opportunities

Nigeria in particular stands to benefit from flow of cross border of financial resources not only from the traditional sources; Western Europe and the United States, but from oil-rich Middle East – home to vast investment resources, and Asian countries – with Malaysia as the global hub of Islamic finance, as well. Already, Nigeria and Nigerian businesses are making giant strides aimed at tapping vast capacities at the Islamic Development Bank (IDB) and other avenues for long term capital flow through sukuk market. Recently, for instance, on the 15 th March, 2012, the Nigeria’s Vice President Alh. Namadi Sambo while declaring open the first IDB-Nigeria Business Forum conference states that: “I want to see more capital injected into our businesses from the bank in support of infrastructural development and general economic development. On his part, the President of IDB Group, Dr. Ahmad Al-Madani, announced the bank’s approval of $98 million for the implementation of the Bilingual Education Program in Nigeria. This, according to him, is in addition to several intervention projects the bank was undertaking in Nigeria, which among others include: the National programme for Food Security, Zungeru dam project, Mambilla hydroelectric dam project, Lagos-Ibadan Expressway and National Railway Rehabilitation project as well as the Shagamu-Benin dual carriage project.
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Impact of Artificial Intelligence on Banking Sector in India

Impact of Artificial Intelligence on Banking Sector in India

Amer AwadAlzaidi (2017). Department of Information Systems, University of Jeddah, Research on Artificial intelligence is a cutting-edge technology that has been forefront in technological revolution worldwide. Artificial intelligence systems have potential in transforming all operations of banking industry is seen as (AI) and is received with enthusiasm due to its capability of taking human-like decisions and avoiding human like errors. Artificial intelligence has been adopted in some sectors more widely than others. Banking sector is amongst the few sectors that had shown moderate level of acceptance and adoption of this technology. Dr. Simran Jewandah (2017), Associate professor, Chandigarh University. How Artificial Intelligence Is Changing The Banking Sector –There is a growing need to use Artificial Intelligence (AI) and the Indian banking Sector is gradually shifting itself towards using AI. This can be due to the fact that banking is still a manpower-led sector, with operations that require human involvement. Yet the Indian Banking sector understands the need to cut down cost and the expenditure on redundant tasks. The Indian banking sector is exploring the ways by which it can harness the power of AI to improve the processes and enhance the Customer Service in the long run. The paper seeks to explore the areas where the AI is being used in the Banking Sector; the adoption has been gradual, when compared to other sectors.
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Three Failed Attempts of Joint Rankings of Research in Economics and Business

Three Failed Attempts of Joint Rankings of Research in Economics and Business

the categories business, business and finance, industrial relations & labor, and management. As 261 is much smaller than 191+213=414 we cannot infer exactly how many economics and business journals he actually applied; if his list (see Table 1) is representative for his sample, then the ratio between economics and business journals is 2:1. The weights for the journals are derived according to the so-called invariant method from the cross-citations between journals. This implies that the weights are heavily determined by the underlying population of considered journals. If the number of business journals is much smaller than the economics journals, the number of considered citations is substantially smaller for business. This gets even worse knowing that the journals of the field logistics, operations research, and production are not well-represented in the SSCI but only in the SCI-X (Dyckhoff and
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Maturity transformation risk, profitability and stability in Islamic banking: A new macro-prudential liquidity perspective

Maturity transformation risk, profitability and stability in Islamic banking: A new macro-prudential liquidity perspective

debt might lead to severe asset shocks and a rapid drying up of liquidity in economic downturn. As their primary function, financial firms raise debt that has to be rolled-over constantly, which is used to finance assets. They found that, during stressful conditions, when asset prices deteriorate, banks find it much more difficult to roll over the debt. Therefore, banks with higher debt face more severe liquidity risk that may lead to a run on banks. Similarly, expanding Diamond and Dybvig’s (1983) work, He and Xiong (2012) also highlight the debt rollover risk. He and Xiong’s study assumes that a bank has debt maturities spread over time, with various creditors and that these creditors are exposed to an intrinsic risk of bank failure during the next contract period if other future maturing creditors choose not to rollover their debt contracts. This may result in a run on lenders and banks being unable to rollover their debts, leading to liquidity dry up in the market. Consequently, a lack of funding sources provides banks with incentives to hold more liquid assets and restrict them to perform their normal liquidity creation function, in order to fulfil depositors’ demands. Gordon and Metrick (2012) have examined the relationship between liquidity and credit risk in securitized banking. The empirical results show a substantial increase in refinancing rates and funding haircuts in wholesale market caused perceived credit risks in the form of subprime loans. Although investors exhibit asymmetric information regarding the actual subprime risks held by banks, the fear of decrease in their investment value, which caused non-availability of short-term market funding resulted in severe liquidity problems for the banks in the recent global financial crisis.
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The Guide to Islamic Economics, Banking, and Finance

The Guide to Islamic Economics, Banking, and Finance

An ordinary conventional housing loan is given on the basis of debtor/creditor relationship. Whereby, the amount of loan is being charged interest, normally quoted at a certain percentage above the Base Lending Rate (BLR) over the loan period, repayable in periodic installment. The BLR will fluctuate up or down and it will affect the total loan cost. Simultaneously, arrears in conventional loans are normally capitalized. However, under the Islamic banking scheme, since the BBA concept is being applied, a seller-buyer relationship will be established and the selling price is fixed upfront. The sales price is then repaid in periodic installments and the agreed installments will remain fixed throughout the financing period. As such, a customer’s inte rest rate risk is eliminated. Furthermore, arrears will not be capitalized.
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Bitcoin in Islamic Banking and Finance

Bitcoin in Islamic Banking and Finance

The future for both credit risk management and Takaful is very bright and promising as western scholars and investors are paying more interest to them, especially to counterfeit problems associated with the conventional financing system. In 1990, the establishment of the Institute of Islamic banking and Insurance (IIBI) in UK is an important indicator of the importance and rise of this vital economic activity around the world. In USA the situation is more favorable for Islamic finance system as we see a list of conventional commercial banks that are operating Islamic banking and insurance system i.e. HSBC, Devon Bank of Chicago, Deutsche Bank, JP Morgan Chase, and University Bank -Ann Arbor. These banks along with their conventional banking are offering Islamic banking system to its clients. Mortgages from Islamic Banking units of these conventional banks have been purchased by Freddie Mac and Fannie Mae companies. Also, many universities are keen to develop this topic due to its high demand in world job market. We should expect shariah compliance Islamic finance scholars to educate the common to abolish the myths which hinder the large Muslim community about Islamic finance products and play a progressive role in assisting economic and financial experts in order to widen the use of these Islamic techniques to cope with the conventional financial products.
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