Recent events in the Islamic world have captured the attention of the general public in the west to an unprecedented degree. Many of these events are widely misunderstood or misconstrued by them. This could be attributed to the ignorance of westerners concerning things Islamic, including the culture, art, geography, history and politics of Islamic countries as well as the precepts and conditions of the Islamic religion. Westerners often fail to comprehend the unshakable conviction that Muslims have in the superiority of their religion; the Islamic belief that there is but one God who is the sole creator and ruler of the destiny of men; the belief in the necessity for manifest acts of common worship and devotional requirements for the Islamic faithful; and the belief that conscientious application of the sacred law of Islam is not only necessary for one's ultimate salvation and deliverance but also for the fulfillment of human existence on earth. To the Muslim faithful, a mere intellectual grasp of the religion is not sufficient; thanks must be rendered and obedience must be shown in the most profound manner [1,2,3,p. 7,4,5,6].

Today's business executive or manager should have a fundamental understanding of Islam, not merely to expand his/her intellectual horizons but as a practical business necessity [2.7,8,9]. He/she needs to comprehend the whole posture of Islam in its historical and environmental context. This is true for several reasons. First, there is a growing economic, political and cultural interdependence in the world; Muslim and non-Muslim nations of the world are becoming increasingly and inextricably linked. A significant share of the world's fossil fuel resources. which are of crucial importance to western economies, are located in and controlled by Muslim countries. Second, many Islamic countries. particularly those in the OPEC group, have proven to be of extraordinary strategic military importance to the west. Third, the oil-fueled boom of the mid-1970s caused many Arab and Muslim countries to experience a rise in national income and in cash balances available for investment worldwide. The impact of these developments on world financial and. trading patterns is immeasurable.

A final reason why managers need to understand Islamic economics is that there are about 720 million adherents of Islam in the world; they comprise approximately 20 per cent of the world's population and represent all known races. Muslims constitute a majority in over 35 countries and inhabit a nearly contiguous stretch of land from the shores of the Atlantic in the west to the confines of China and Malaysia in the east. Further, the religion is spreading or being revived in many parts of the world. Unfortunately, the forms of revivalism all too often have conformed to and reinforced the stereotypical image of the Muslim in the west: extreme theological ethnocentrism, strident fundamentalism, and religious chauvinism[3,p. 2,4,5,9,10,11].

The purpose of this article is to help broaden the understanding of contemporary business people of the principles of Islamic economics. The first section is an introduction to Islam and the second contains a general discussion of the Islamic religion. Emphasis is placed on the basic principles and key ethical practices of the religion and the ways that it differs from other great western religions. The third section focuses first on the general economic tenets and then on the economic basics of Islam. Specifically, this section explains how a system forbidding the payment or receipt of interest is being made viable in the modern world. The final section brings together the major findings of the study and presents the conclusions.

Islamic Religious Foundations

To Islamic believers, there is great pride in belonging to a unifying faith that has contributed to the social solidarity and cultural development of such a large part of the world. They see their religion first as a guide for a righteous way of life and for an eternal reward in the hereafter. They also see it as the generator of an original and rich civilization [12, p. 7] .

The Islamic ideology was first pronounced through the Prophet Muhammad in Mecca in the Holy Book, The Koran (or Qur’an) , in 610 AD, much later than either Christianity or Judaism. Muslims consider Muhammad to be the messenger of Islam - the appointed mouthpiece of God. The Koran is the principal inspiration and basic guidance of Islam. It not only yields dependable historical information on the life and genius of Muhammad, but it is thought to be the law of God, the literal word of God, since it came directly from heaven. It represents the supreme embodiment of the sacred beliefs of Islam [3,11,12, pp. 78-107].

Islam brought together Muslims regardless of colour, national origin, or economic or social status in a fellowship constructed on monotheism and egalitarianism a faith in one God (Allah), equality among men, and the subjection of the individual to the good of the greater societal whole. The term' 'Islam" means submission, that is, the believer's submission to Allah. In the eyes of believers. Muhammad, like Abraham, Moses and Jesus, was a prophet who delivered the message of the true God. However, unlike the Christian conception of Jesus (the Son of God), Muslims do not consider Muhammad to be a divine figure, though he has earned the respect and reverence of countless millions of people. Rather, Muhammad was a mortal commissioned by God to deliver God's sacred message to mankind. Muhammad's objective was not to supplant but rather to complement the mission of his predecessors, Jesus and, especially, Abraham. In fact, Muhammad taught that Jesus and Moses were the most important bearers of God's hallowed message to his people in the Testaments and the Torah[3,12 , pp. 88-105,13, p. 2].

Islam, like Christianity and Judaism, is regarded as a basic variant of the Abrahamic faith. Some observers see in all three the same religious themes. Islam bears particularly close historical and theological ties to Christianity. derived as they were from the common fount of Judaic and Hellenic beliefs. However. there are important differences. including the fact that Christianity clearly places less emphasis on communal solidarity than does Islam [12, pp. 3. 27].

The powerful appeal of Islam lies in the fact that it is an all-embracing way of life governing the totality of the Muslim's being. As God's surrogate in this world, a person is not a totally free agent but is circumscribed by religious principles - a code of conduct for interpersonal relations - in his/her social and economic activities. Religion is paramount in all areas of life, even the most trivial; the moral and spiritual element is not divorced from everyday behavior. The Muslim lives within a social structure shaped by Islamic values and is guided in his/her daily affairs by standards and rules of moral conduct forged in the cauldron of Islam. There are numerous Islamic dictates and prohibitions regarding secular transactions and human relationships. Islam is as much a socio economic-political system as it is a religion[I,2,6,7,p. 11.9.11,13, p. 119].

Islamic theology is primarily based on writings in the Koran : the final recension (or review) of God's testament. It is also based on complementary information from: (a) prophetic sayings (the hadith or traditions - utterances and unspoken approvals attributed to Muhammad by reliable witnesses), and (b) ideal human conduct (the Sunnah or way - reported acts and allowances of the Prophet). In addition to these non-canonical texts, another source_ of Islamic guidance is the sharia - the laws derived from both the Koran and the Sunnah. The sharia is considered sacred law grounded in divine revelation. There is general agreement among Muslims on these primary sources of guidance though the different Islamic sects or branches may disagree over the liturgical authenticity of many hadith. The Koran, hadith and Sunna in combination shaped the institutions attending the rise of Islam to socio-economic and political heights of attainment[2,3,6,14].

There are also two secondary sources of guidance in Islam. The first is the ijma - a historical consensus of qualified legal scholars regarding the adoption of existing doctrine to new socio-economic conditions. This art has significance in many Muslim countries today. The second is the ra'y, which is one's own determination of right and wrong based on analogical reasoning. This art is now largely discredited[2,3,6,14].

Islam is a religion studded with socio-religious injunctions and ordinances based on logic and rationality. The themes of reason, proof and deduction emanating from within a predetermined frame of reference are found throughout the Koran. A holy verse states that God called reason a religious law. and another states that he called the mind religion. Muhammad contended that there was congruence between revelations mentioned in the Holy Book that were received at different times and through different prophets. Similarly, Islamic exegetes (Ulama) today contend that there is internal coherence between Koranic writings and the hadith [1, 3].

A cardinal principle of Islam is that there is to be no coercion in religion. In most Muslim countries. Islam is a religion with the strongest claim to human rights. The Prophet himself as well as the early caliphate (his successors) ordained it to be the duty of the state to protect the rights, property and churches of subjects, regardless of nationality or place of abode, Muslim and non-Muslim alike. Even when the early Islamic state was expanding, albeit by the sword. the conquered Jews and Christians became protected minorities who could practice their own religion and exercise some degree of autonomy under their religious head. It would be difficult to find a system, including democracy. that is so tolerant of minorities or which puts the state so completely at their service. One of the foundation stones of the Islamic religion is the responsibility of the individual to the welfare of others in the world society[2,9,11,13, p. 2,15].

In countries where Islam is the state religion, the belief in Islam and its civil and ceremonial codes creates consensus; there is no distinction between secular and religious law; and religion permeates the whole fabric of society. both public and private. The dichotomy of church and state is alien in a truly Islamic context. Islam is considered to be the final revelation and the primal religion, not just' 'a"
religion. The Koran has all the religious and moral truth required of mankind from birth to judgement. This belief has set the tone for Muslim scholarship and serves as the foundation for the Muslim states' prohibition on the practices of non-Muslim religion[1,3,8,11].

The following are considered to be the basic fundamentals of Islam (do's and don'ts):

(1) Acknowledging there is no god whatsoever but God. This is the essence of Islam: 

There is no God, but God.
Thy Lord hath decreed, that ye worship none save Him. . .
Set not up with Allah any other God. lest thou sit down reproved. forsaken.

The Islamic religion has as its foundation submission and obeisance to the will of the omnipotent and omniscient creator, the one and only God. who admits of no consorts or associates in the worship and adoration of him[12. pp. 103.112].

(2) Honoring and respecting parents:

And lower unto them the wing of submission through mercy, and say: My Lord! Have mercy on them, seeking mercy from the Lord, for which thou hopest, then speak unto them a reasonable word.
If one or both of them attain old age with thee, say not" Fie" unto them nor repulse them, but speak unto them a gracious word.

No message which the Prophet received from Allah is so thoroughly underscored in the revelations as honoring and respecting parents. In this area. the familiar and communal responsibility of believers is expressed in its purest form[12. pp. 112,126].

(3) Respecting the rights of others:

Give the kinsman his due, and the needy, and the wayfarer. . . But if thou turn away from them, seeking mercy from the Lord, for which thou hopest, then speak unto them a reasonable word.

The Koran speaks often against such injustices as the wealthy lording their wealth over the poor, or the strong taking advantage of the weak and helpless[12 , p, 112].

(4) Being generous but not a squanderer:

. . .squander not (thy wealth) in wantonness. Lo! the squanderers were ever brothers of the devil. and the devil was ever an ingrate to his Lord.
And let not thy hand be chained to thy neck nor open it with a complete opening, lest thou sit down rebuked. denuded. Lo! thy Lord enlargeth the provision for whom He will. and straiteneth (it for whom He will)[12. p. 113].

(5) Avoiding killing except for justifiable cause:

Allah defendeth those who are true. . . sanction is given unto those who fight because they have been wronged.. .Those who have been driven from their homes unjustly only because they said: Our Lord is Allah.
 Slay not the life which Allah hath forbidden save with right. Who so is slain wrongfully. We have given power unto his heir. but let him not commit excess in slaying. [12 pp. 50. 113].

(6) Not committing adultery:

And come not near unto adultery. Lo! it is an abomination and an evil way [12. p.113].

(7) Safeguarding the possessions of orphans:
Come not near the wealth of the orphan save with that which is better till he come to strength: and keep the convenant. Lo! of the covenant it will be asked.

Muhammad himself was born to a father who died soon afterwards, and with the death of his mother was orphaned at age six, He undoubtedly understood very well what poverty accompanied by orphanage meant. Revelations regarding orphans, minors, the needy and destitute, as well as slaves and their treatment and liberation form the cornerstone of the social structure of Islam [12. pp. 38. 112].

(8) Dealing justly and equitably:

Fill the measure when ye measure. and weigh with a right balance; that is meek. and better in the end.
And if you give your word. do Justice there unto. . .

The faithful are enjoined to be honest in their dealings with others, to be true to their commitments, to honour their promises and to be truthful. trustworthy and reliable [12. pp, 113.128].

(9) Being of pure heart and mind:

Your Lord is best aware of what is in your minds. If ye are righteous then lo! He was ever forgiving unto those who turn unto Him! It is your righteousness that reaches him.

A firm commandment of Islam is to be beneficent. to be good in communal relations and to act rightly in all circumstances. The faithful are admonished to be constantly mindful of God's will in all dealings [12. p. 113].

(10) Being humble and unpretentious:

And walk not in the earth exultant. Lo! thou canst not rend the earth. nor canst thou stretch to the height of the hills. . .and follow not that where of thou hast no knowledge. Lo! the hearing and the sight and the heart - of each of these it will be asked.

Unto me it has been revealed that you should be humble that ye may not be proud over others. The faithful slaves of the Beneficent are they who walk upon the earth modestly and when the foolish address them answer: Peace [12. pp. 113.130].

Islamic Economics
In recent years. many Islamic countries have proposed an Islamic economic system which reasserts traditional Islamic values. These countries want a complete system that covers specific patterns and areas of social and economic behaviour for believers which does not involve a reformulation of Islamic ideology or a compromise of its tenets. Economic practices are made to conform to Koranic dictates, with no reinterpretation of the basic doctrine[5,6].

The process of Islamisation of economic systems involves a stamping of economic institutions with a particular Islamic identity. The process seems to be gaining momentum over time. New institutions have been established, such as Islamic banks and development assistance agencies, with the aim of translating Islamic economic ideals into practical business solutions[8,16,17].

As noted previously. Islamic economics is closely related to and is part of the Islamic concept of life. Both the Koran and Sunna have much to say on economic questions. The welfare of people while on this earth and their welfare in the hereafter are inextricably intertwined. Islamic teaching in the economic sphere deals with a wide-ranging set of welfare issues: justice, mercy, well being, wisdom, and stress on fraternity and equality. It also addresses purely economic issues such as the system of economic decision making, saving, investment. capital accumulation, the incentive system, the proper role of government. property rights. inheritance laws, the allocation of resources, the types of economic freedom man enjoys and other fundamental economic issues which have a deep-rooted significance for the Muslim faithful [1,3,11,13. p. 119,16,17].

In sum, the moral teachings of Islam lay down ethical guidelines for the effective control of all economic behaviour. Economic institutions should facilitate the achievement of the goals and objectives of Islam. Economic activities and undertakings are assessed and measured in moral terms and must be conducted in consonance with the ethos and norms of the Islamic value system. There must be a positive line of action leading towards the ultimate aim of welfare dispensed judiciously and tempered with wisdom. Specific ordinances, some obligatory and others prohibitive, serve as guides to economic actions.

Principles Governing Economic Practices
It is Islamically legitimate to engage in material pursuits aiming at welfare. Commercial institutions relating to the sale of goods, hiring of workers. warehousing goods, wages, interest, exchange, banking and the like have been well understood in the Islamic world for many centuries. Many have Islamic origins.

There are several basic principles that serve as the foundation of Islamic economics. First. Islamic economics contraindicates acts resulting in harm, corruption and exploitation of the weak. Islamic economics, more than capitalism or socialism. emphasizes man as part of a collectivity and attempts to balance and harmonize the individual's spiritual and material needs equitably against the needs of society at large. Islam stresses the virtue of total integration of morality in man's dealings with other human beings in any endeavor undertaken. It literally encompasses the relationship of Islamic adherents to each other and to their society from birth to death. In the area of economic activity as well as personal morality, Islam places great emphasis on selflessness as a form of gratitude towards God [1,3,7, p. 11,12. p. 1].

An overriding concern with social justice, stress on contractual obligations. the sanctity of one's word and the correct patterns of income and wealth distribution pervades Islamic economic thought. This is the basis of repeated admonitions regarding the needy, destitute, prisoners, wayfarers, orphans and one's parents and relatives: the appropriate tax policy and general orientation of government expenditures: the importance of meeting one's contractual obligations; and the precise execution of very strict trust and inheritance laws. In Islam. no individual or institution is left a victim of human vagaries and uncontrolled greed. The selfishness of the rich and powerful is denounced repeatedly (1,2,7, p. 11,111).

Second, Muslims are not averse to legitimate profit through trade and other kinds of business. Muhammad was not hostile to commerce as he himself was a businessman for most of his life. and some of his most eminent followers were merchants who imported, exported, and facilitated the transit of goods. The merchant has always been a respected member of the Islamic community, and like the artisan and members of other professions receives particular commendation in the Koran[3,5,6,7, p. 13,11].

While giving express approbation to certain occupations, the Koran sanctions any other licit occupational pursuit based on free will that does not involve usury, fraud and profiteering. In economics as in other areas, the belief is that Allah in his divine justice allows man the freedom to pursue actions on which he will be judged. Man is the author of his own economic vices and virtues and thus of his own crimes and punishment. Man's economic actions rest on the basis of his good deeds. his faith in Allah and his own conscience. There is clear reasoning behind this thinking. Muhammad wrote that a wide range of economic choices motivates man to be creative and to use his intellectual and physical endowments for the betterment of his life and his society. With the exception of certain doctrinally unacceptable practices (gambling, speculating, or trading in prohibited items such as alcohol or arms). man should be free to choose his trade or business of his own volition [7, p. 13,11, 12, p. 172].

Third, Muslims have what seems to westerners to be a unique concept of property. Islam assumes that wealth is a favour from Allah, who created and so owns everything. Man is merely an agent with only temporal possession of material things. This belief is demonstrated in an often-quoted Koranic verse: "To him belongs, whatever is in the heavens and whatever is in the earth and whatever is in between and whatever is beneath the soil", The shariah provides commandments on how this trust is to be fulfilled. Those holding property are regarded as trustees or bondsmen who are entitled to receive profits therefrom. However, they are admonished to honour and please Allah by managing and using property entrusted to them in a responsible, righteous, socially beneficial and prudent manner; and to neither abuse, destroy, nor waste it. Wealth is to be used in moderation and is to be shared with the less fortunate through payment of the Zakat and the discreet giving of alms to the poor and needy generally [3,4,6,7, p. 6,9].

Those holding wealth are particularly admonished not to misuse it for dubious pleasure. Allah does not look with favour on those who spend and use resources wastefully and extravagantly. Further, property is not to be hoarded or accumulated as an end in itself; rather, it is to be viewed as a means of serving society as a whole. Avariciousness, cupidity and indifference to the poor and needy are cardinal sins [7, p. 6,9,13, p. 127].

Fourth, it should be noted that the Koran speaks approvingly of demarcated free enterprise, while quite straightforwardly discouraging the kind of central planning that characterizes socialistic and communistic economies. A relevant Koranic verse reads: "O ye who believe, consume not your property between yourselves unlawfully; it being lawful to acquire property through trade with mutual consent' '. Another quotation sanctions the acquisition of legitimate wealth: "Wealth rightly acquired is a good thing for the righteous man' '. The Koran does not condemn the accumulation of wealth, only the failure to use it to help others [1 ,3,4,9.11].

The protection of the rights to property including ownership of the means of production, is deeply embedded in Islamic ideology. Private property is not to be confiscated, even at death. This contradiction to socialist philosophy is seen clearly in a passage dealing with laws of descent and distribution: "For everyone leaving an inheritance we have appointed heirs, parents, and near relations, and also husbands and wives with whom you have made firm covenants. So give each of them appointed shares." Even if the inheritance laws do not have a socialistic intent, they ensure that substantial estates soon get dispersed and prevent the concentration of wealth through massive intergenerational transfers to heirs and beneficiaries of the testator's choosing. Obviously, the inheritance laws serve as a major check on the accumulation of property [1,3,4,9,11,13, p. 120].

The Islamic emphasis on private property and individual initiative manifests itself in other ways. The Koran says that all men are created equal, but that some are endowed with more talent, energy, ambition and wealth, so there are bound to be differences in degrees of economic success. Simply put, some people possess more personal ability, aspirations and resources than others. There is no Koranic objection to pecuniary incentive and no assumption is made that all citizens in an Islamic society should consume at the same level. Thus, the Islamic religion accepts maldistribution of wealth and income and justifies it in the interests of efficiency. with the caveat that the wealthier people in society should be aware of their obligations to poorer people [1,4,6,9,15].

While the Holy Word speaks of the obligatory payment by the affluent of levies to feed and help the needy and wayfarers, it discourages transfers intended solely to equalize wealth. A relevant injunctive Koranic passage reads: . 'Allah has favoured some of you above others in the matter of worldly provision; but those more favoured will by no means restore a portion of their provision to those under their control", Such an injunction is again contrary to socialist thinking. Here is one reason why the Zakat. a capital levy or wealth tax designed to cover most of the activities of a modern welfare state, but very regressive in character, is favoured over income tax, a progressive tax whose effect is to redistribute income and wealth [6,9,15,18].

Basic Characteristics
The full impact of the Islamic religion can be derived only from the political, social and economic institutions it sired. In the area of economics, ten fundamental characteristics - dictates, prohibitions, and injunctions - which distinguish the Islamic economic system from others are as follows:
(1) Muslims must pay an annual Zakat, an alms or poor tax that is assessed as a capital levy, not as a graduated income tax. Zakat means giving back to Allah a portion of his bounty as a means of purification or expiation for what the believer keeps for himself. It is also a means of avoiding the sufferings of the next life. Paying the Zakat - which is in many ways similar to the Christian tithe - is not only a commendable virtue but an imperative religious obligation. It is a duty rather than a mere ritual act. While the mode of paying the Zakat and the percentage levied are worked out according to carefully laid down and specifically defined rules, generally, peasants must pay from 5-10 per cent of their produce and others must pay 2.5 per cent of their income and savings. The Zakat contribution is over and above the secular tax.
(2) An obligation consecrated in Islam is that believers. must pay food, clothing and other maintenance costs for certain categories of relatives, including one's wife, needy parents, and female children until they are married and male children until they reach the age of puberty.
(3) Believers are obliged (have an inalienable right and a communal responsibility) to provide charitable assistance to relatives, orphans, neighbours and the destitute. Individual fortunes are intertwined with and inseparable from the fortunes of the family and the entire community,
(4) Muslims are enjoined to work diligently to earn their own livelihood and
to provide for dependants.
(5) Workers earning a wage or salary, employers earning a profit, and administrators are urged to do their work faithfully and loyally, and to exert the utmost effort to produce the highest quality product or service possible.
(6) The faithful are exhorted to observe the conditions laid down in the shariah
for the validity of business and financial transactions. These laws facilitate
the exchange of goods. help remove miscomprehension and  misunderstanding in business dealings and help promote a climate of peace between the contracting parties.
(7) Solemn and binding agreements such as pledges or trusts concluded with other parties must be fulfilled.
(8) Muslims must respect Koranic ordinances concerning the devolution of one's estate to heirs, including the surviving spouse, surviving parent(s) and all surviving children.
(9) Usury is condemned and usurious practices are considered to be the gravest of sins.
(10) Muslims are admonished to observe the property rights of others and to abstain from deception, exploitation, sharp trade practices and disruptive transgressions such as gambling, monopoly, pornography and the like. Gaining profit through expediency and making unethical use of others for one's own advantage is condemned [3,4,6,11,14,15,18].

Ban on Interest
In the economic arena, in particular, the Islamic religion is seen not as a set of rudimental beliefs but as an all encompassing complex framework of theological reference. A particularly important principle is the unbending Koranic prohibition of the payment or receipt of interest, which is considered usury (riba).
Though there are few hadiths on the subject, Muslim scholars interpret riba as the increasing of a capital sum before repayment - the predetermined return on the use of money. Dicta regarding riba are more than mere moral exhortations; they are straightforward condemnations. To accept riba is to commit the very grave sin of haram. The moral distaste by Muslims for riba cannot be overstated and the penalty for not observing the rule is clear. Practitioners of the black art of usury are warned on pain of hell-fire to abstain: the giver and the taker are equally damned[2,3,5,6,15,16].

Riba is sometimes defined as "excessive" interest, but Moslem scholars today almost universally hold it to mean all interest. The Koran says that the incentive for interest is to accumulate money, to make more and more of it and to secure its rates at the expense of those who need the money. It stultifies the best humanitarian propensities. There is a holy verse which removes all doubt of the condemnation of interest: "Ye who believe! Fear God and give up what remains of your demand for usury, if ye are indeed believers' '. Another passage compares riba unfavourably with the Zakat when it says' 'Allah will wipe out riba and will foster charity", and another reads "O believer, devour not usury, doubled and redoubled". Clearly, the Koran implies that the creditor who does not seek to profit from his loan is performing an act of pious munificence which pleases Allah greatly [2,3,6,16,18,19,20, p. 53].

Riba is scorned and forbidden because of its pernicious effects. The faithful believe that it is useless and a reward gained without productive effort. No benefit comes from it. Its abolition is a consideration of equity - it was intended to protect the poor and weak against exploitation and unwarranted hardship and at the same time to encourage investors and labourers to combine their resources in joint ventures. Muslim scholars usually accept this prohibition to mean not only interest for the use of money, but any fixed or guaranteed interest payment on cash advances or on deposits. However, as noted above, no Koranic passage admonishes the faithful to shun trade which, unlike interest, involves an uncertain rate of return. The Koranic concern with the differentiation between riba and lawful commercial transactions can be sensed in the following passage: "They keep saying: the business of buying and selling is also like riba; whereas Allah has made buying and selling lawful and riba unlawful" [1,5,6,15,17,20, p. 33,21].

Thus, it is Koranically acceptable to sell goods and commodities and participate in other business transactions. Further, it is acceptable to lend money, but only if the return for the use of money fluctuates according to the actual profits made from such use. Capital should earn a profit only if it is invested in productive enterprise or in the provision of tangible services involving human effort and an element of risk.

It is interesting to note that riba is not viewed as a commercial concept; rather, it is always referred to in a moral context. This is in keeping with the Islamic concept of unity that emphasizes man's role in a larger societal context and his moral obligation not to take advantage of other human beings. Society benefits little when debtors live in indebtedness from which there is no hope of escape. Similarly, society does not benefit when creditors hoard wealth for personal use and security and do not re circulate it in the community.

To protect the interest of both parties and to reduce the risk of fraudulent dealings, the Koran suggests that creditors have the terms of their loan put in writing and have it witnessed by two neutral parties. The relevant Koranic passage reads: "Believers, when you contract a debt far a fixed period, put it in writing. Let a scribe write it down for you with fairness. . .". Furthermore, creditors should be understanding to debtors who get into difficulty with repayments. An applicable Koranic verse states: "Should a debtor be in strained circumstances, then grant him respite, in respect of the repayment of capital sum, till a time of ease. But if in such a case, you remit the capital sum also as a charity, it will be better for you." This verse suggests, first, that burdensome debt should be settled through peaceful bilateral negotiations and, second, that interest is a source of misery and should be prohibited. It is a vehicle through which the wealthy can exploit rather than help the needy[5,6,7,13,16,17,20, p. 34].

Financial Techniques
In addition to a strong determination to establish an economic order in line with the teaching of Islam, there has been a revival of interest in Islamic banking in recent years. In general. an Islamic bank is one which does not charge or pay interest rates on loans or deposits. To. skirt the ban an interest, Islamic banks use a profit-sharing system to replace interest an borrowed or loaned money. In contrast to western-inspired banks, an Islamic bank enables the Muslim faithful to conduct financial operations in accordance with their deeply held religious beliefs without resorting to the subterfuge of calling interest by another name and condoning it, or engaging in other practices which the faithful find repugnant [5,15,17,22 .23].

On the liability side of the balance sheet, there are two types of accounts: demand deposit accounts, which earn no interest but entitle the holder to certain services, and savings deposit accounts, which may (after a period of three to six month) earn a return for the depositor. The savings depositor in essence purchases c equity position in whatever activity the bank uses the capital for. Deposits are treated as shares and their nominal value is not guaranteed. Thus, depending on the type of account, the depositor may be entitled to share in the profit from the bank's investment after the account is maintained for a given period. This type of savings account is in keeping with the Koran's interdiction of interest charge or payments [3,5,6,7, p. 27,15,16].

On the asset side of the balance sheet, the system is symmetrical in that there is equitable risk-sharing between the provider of capital and the entrepreneur who uses it. That is. profits and losses are shared between banks and economic agent according to certain predefined rules. The banks are in effect investing money rather than lending and they are sharing the risks with their clients. Muslim apologists insist that the active involvement of the bank with the entrepreneur through profit-sharing is more efficient than loan financing as a way to channel capital into productive outlets.

Thus, the Islamic bank does not charge a fixed rate of interest but does become a partner to the borrower on investment projects. Co-operation with and advice to the borrower is a primary responsibility of the bank, since it faces great risk on any investment project it finances. The advice includes both technical and economic aspects of the investment. These kinds of loans offer many advantages, albeit there are many risks and requirements for participating banks [4,5,6,15,16,17,24].

It remains to be seen whether the act of abolishing riba is a powerful enough force to engineer a smooth transition from an interest-based banking system to an exploitation-free Islamic banking system. Fundamentalist Islamic countries in which riba is prohibited are using a variety of traditional Islamic techniques on both the asset and liability sides of the balance sheet to achieve profit goals within Koranic-imposed constraints. Many Muslims sense and believe that this is ail opportunity to have the sharia guide and direct their lives, not only in family and social matters but also in economic and business matters. The fresh evaluation and new interpretation of original sharia principles is providing a reassertion of sharia as a valid and relevant corpus of law within which modern-day banking and business transactions can be conducted.

Conclusion

Like the Bible, the Koran is concerned primarily with spiritual matters of an abstract nature. Unlike the Bible which concentrates on temporal teaching of social relations, the Koran deals, with how believers should conduct their everyday lives. Indeed, for the Muslim faithful, no task, commitment, performance, journey, or business transaction is undertaken without the involvement of Allah. Koranic proscriptions and ordinances are replete with strong but not always distinguishable ethical undertones which motivate Islamic social and economic behaviour. Morality as ordained by the Koran is not only a strong binding and unifying element among the Islamic faithful all over the world, but it serves as the foundation for all social and economic behaviour. In the social arena, the moral element is particularly evident in the stress on family ties, the respect for elders and the injunctions in the Koran prescribing behaviour for women. In the economic arena, the moral element surfaces in the emphasis placed on justice and fidelity in dealings, the distribution of property on inheritance, the sanctity of oath and trust, the honouring of one's covenants, the avoidance of riba and the general prevalence of an egalitarian sentiment. The moral element, reinforced with continual emphasis on the need for religion in one's daily life and in all commercial and occupational pursuits, is one of the most important factors which distinguish Islamic economics from other economic systems.

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