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Islamic banking & finance institutions would neither pay interest nor earn interest. Bank-depositor relation would be based on the depositor sharing the profit accruing as a result of the bank's profitable use of the deposits pooled together. On the asset side a number of ways were tried to earn profits including partnerships and profit-sharing (mudaraba) with businessmen. Many Islamic banks entered into business directly, buying and selling commodities, land or real estate. Experimentation soon led to what is currently the predominant form of Islamic finance.
In a nutshell, the core idea behind commercial and investment banking, that of financial intermediation, is retained but the ethically repugnant practice of interest on loans is discarded. Within a short period of fifty years, the first half of which was devoted mainly to theory and model building, Islamic banking established itself as an alternative, claiming ethical superiority over conventional banking.
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Enter Asya Finance House
Islamic Banker, Volume: 12, December 1996/January 1997, 8 - 9
Mohammed Dawood
Interest -free banking in TurkeyRead More |
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Prospects of Islamic Banking in the Muslim Minority Communities
- By Hussain Usmani Malami
Journal Institute Of Muslim Minority Affairs, Vol 13, Issue No 12, July 1992, pages 325-336
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Conventional banking profitability theories in Islamic banking: some evidences
- By Sudin Haron and Nor Hayati Ahmad
Journal of Islamic banking and finance, volume: 17, issue: 1, year: jan-march 2000, pages: 7—16
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Principles of Shariah Governing Islamic Investment Funds
- By Justice Mufti Taqi Usmani
Al-Balagh Webzine
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Islamic Banking In Practice: The Albaraka Group In Muslim Minority Countries
- By Staff Report
Journal Institute Of Muslim Minority Affairs, Vol 13, Issue No 12, July 1992, pages 325-336
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Islamic Banking System— A Word of Caution
- By Dr. Shahid Hasan Siddiqui
Journal Of Islamic Banking and Finance, Volume 14, Issue 3, July-Sept 1997, pg 7-18
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