Chapter: is presented and evaluated previous literature used in


1 Literature Review:In this part (section) is presentedand evaluated previous literature used in the performance of commercial banks. Literature review refers to the collect ofthe results of the different writer relating to the present study. It takesinto through the research of the past researchers those are related to thecurrent research in any path. Here are the view of the old researches relatedwith the actual study.In theirstudy on “Financial Performance of Selected Public Sector Banks  explained that the banks have to re-orienttheir strategies in the light of their own strengths and the kind of market inwhich they are likely to operate on. In the perspective of this domestic andinternational development, the banking sector has to chart out a perfect pathfor the development in its own. (M. Dhanabhakyam, Feb-Mar-2016,).

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Based on the literature review of these authors can conclude that ingeneral there are two general approaches to measuring the representation ofbanks. The first approach is based on accounting data, is the main financialcoefficients applying to banks while the second approach is based oneconometric techniques. (Gulf, 2014).

Islamic banking is banking or banking activity that is balanced with theprinciples of Shariah law and its practical appeal through the development ofIslamic economics. Shariah prohibits the fixed or floating payment oracceptance of specific interest or fees (known as riba, or usury) for loans ofmoney. Investing in businesses that provide goods or services calculatedcontrary to Islamic principles is also haram (“sinful andprohibited”) Although these principles have been applied in varyingdegrees by historical Islamic economies due to lack of Islamic practice, only inthe late 20th century were a number of Islamic banks formed to apply theseprinciples to private or semi-private commercial institutions within the Muslimcommunity. Islamic banking has the same motive as conventional banking exceptthat it operates in accordance with the rules of Shariah, known as Fiqhal-Muamalat.

Amongst the common Islamic concepts used in Islamic banking areprofit sharing (Mudarabah), safekeeping (Wadiah), joint venture (Musharaka),cost plus (Murabaha), and leasing (Ijara). Some of the salient features ofIslamic Banking may be collect above