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.
Featured
Article
Islamic Banking in Perspective
Journal of Islamic Banking and Finance,Vol 1, Issue 3, July-September 1984, 7-21
A. G. N. Kazi
Islamic Banking And Some Possible Impact
- By Muhammad Azizul Huq
Islamic Economics Research Bureau; Dacca, Bangladesh: First Edition, 1982
Read
more
Islamic Banking New Oppotinities For Cooperation Between Western And Islamic Financial Institutions
- By Qasim M. Qasim
Journal of Islamic Banking and Finance Vol. 3 No. 2 April-June 1986
Read
more
Institute of Islamic Banking and Insurance-Objectives and Activities
- By Dr. Shahid Hasan Siddiqui*
Journal of Islamic Banking and Finance Vol. 12 No. 2 Spring Issue
Read
more
International Seminar on Islamic Banking - Inaugural Address
- By President General Mohammad Zia-ul-Haq
Journal of Islamic Banking and Finance Vol. 1 No. 2 Spring 1984
Read
more
Istisna' and Its Application in Islamic Banking
- By Muhammed Al-Bashir Muhammed Al-Amine
Arab Law Quarterly, [2001] 22-48
Read
more
