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OL Assignment 16.2

Group Number: 11 is presenting a case study on a central bank offering special financing opportunities for Muslims. The central bank recognized that mainstream banks had been slow to offer sharia-compliant financing to Muslims, who are forbidden from paying or receiving interest according to Islamic principles. The group argues that it is fair for the central bank to target this minority religious group with new, specialized banking opportunities as it does not deprive other communities and helps include more customers. However, the case also demonstrates ethnocentrism as the Muslim community expects banks to adhere to their religious beliefs, and it shows how in-group collectivism relates to the central bank's plans to respect the cultural beliefs of the community. Other local banks may react

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593 views2 pages

OL Assignment 16.2

Group Number: 11 is presenting a case study on a central bank offering special financing opportunities for Muslims. The central bank recognized that mainstream banks had been slow to offer sharia-compliant financing to Muslims, who are forbidden from paying or receiving interest according to Islamic principles. The group argues that it is fair for the central bank to target this minority religious group with new, specialized banking opportunities as it does not deprive other communities and helps include more customers. However, the case also demonstrates ethnocentrism as the Muslim community expects banks to adhere to their religious beliefs, and it shows how in-group collectivism relates to the central bank's plans to respect the cultural beliefs of the community. Other local banks may react

Uploaded by

Ankit Kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Organizational Leadership Assignment

Group Number: 11
Ankit Kanaujia 18BM60140
Abhishek Tiwary 18BM60142
Rutuja Sarage 18BM60144
Ankit Kumar 18BM60146
Neelabh Garg 18BM60148

Case Number: 16.2 A special kind of financing

1. Why do you think banks in the United States have been slow to offer financing
expressly for Muslims??

Downton The principles of Islamic finance were set forth in the Koran. Koranic law
forbids paying or receiving interest. These principles stress that money is only a
medium of exchange and should not be used to make more money. Further, the provider
of capital and the user of capital should share equally in the risk of a business venture.
However, banks in United States were not accustomed to the
way Muslims viewed money as a medium of exchange and were operating on standard
banking policies and principles. Thus banks in the United States had been slow to offer
financing expressly for Muslims..

2. Do you think it is fair to offer a minority group a special banking opportunities?

Yes, it was fair to offer a minority group a special banking opportunities because of the
following reasons –
1. The central bank was not depriving any other community form banking and
financing as new opportunities were created without affecting existing
opportunities.
2. The attempt was made to genuinely involve Muslims into financing services
creating an image that banks are not limited to few communities but for all
3. If new opportunities were not provided by the bank, then the Muslims would have
gone to another medium which simply means loss of considerable customer base
Further Central bank used simple market segmentation methodology to determine
where it is lacking and what new should be done..

3. How does ethnocentrism come into play in this case?

Harold This case is a good example of ethnocentrism. In this the Muslims expects their
religious beliefs or culture to be honored regardless of the business's policies or
practices. They are not trying to blend with existing financial institutes instead they
want the banking systems to formulate policies in adherence to principles of Islamic
finance.

4. How does in-group collectivism relate to Central Bank’s finance plans?

In-group collectivism refers to beliefs that people express pride, loyalty and
cohesiveness in their organizations or families or culture or community. These beliefs
are highly considered and practice in various part of the world. And in this case Central
Bank also considered cultural beliefs of a community and its viewpoint on how they
see money as a medium of exchange.

5. How do you think other banks in the community will react to Central Bank?

There could be both positive and negative reactions. Positive reactions because other
banks will try to emulate Central bank if they find that these new opportunities are
helping Central in bank in acquiring new customers. Negative reactions could be there
due to loss of their customers due to these policies of Central bank.

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