The Role of Islamic Capital Market in the Economic Growth and Development of Global Economy – A Select Study
Raising the fund and activities of investment in the Islamic Capital Market abides to Islamic principles and laws known as “Shariah”. The Islamic religious law Shariah states that the market should be free from activities that are prohibited in Islam such as gambling, usury and ambiguity. The money transactions in the market are carried out in a way that should not lead to any conflicts with the ethics of Muslims faith. Islamic capital market plays a vital role in the economic growth and development of the country. The Islamic capital market functions as a similar and equivalent market to the conventional capital market. This plays an important and balancing role in the Islamic banking system in expanding and deepening the Islamic financial markets in Islamic world as well as other parts of the world. In this contemporary world, market became more complex and Islamic finance has recognized itself as a progressively significant factor of the global financial system with a remarkable growth record over the past decade. The Islamic capital market being a part of Islamic financial system plays a vital role in offering various modes of investment and financing opportunities to individuals as well as for corporations. Divergence of financial instrument and innovation of product in the Islamic capital market can enhance the value and raise the risk-return options for the stakeholders. The paper mainly focuses on Islamic Capital Market which is operated as per the Islamic principles and growth of Islamic Capital Market in this contemporary world.