Banking & Finance » Overview

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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Islamic Banking Raises Interest
Management Review -- Vol. 86 No. 10; November 1997
Josh Martin

The growth of Islamic banking Is a reflection of the demand for ethically acceptable financial mechanisms, but they're still prohibited in the United States.

Imagine being able to borrow money without paying interest and have your banker assume half the... Read More

Islamic Banking: Theory and Practice in Iran
- By Hamid Zangeneh
Comparitive Economic Studies
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World of Islam Today: Towards Interest-Less Banking
- By S. Aizaz A. Rizavi

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The Need and Econimics of Cooperation Among Islamic Banks
- By Nawazish Ali Zaidi

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Prospects For An Islamic Derivatives Market In Malaysia
- By Dr. Muhammed Hashim Kamali
An earlier version of this paper was presented to the International Conference on Islamic Investment & Securitisation, Kuala Lumpur, 21-22 April 1998Thunderbird International Business Review, Vol. 41 (4/5) 523-540 (July-October 1999)
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Rationale Of Islamic Banking
- By Dr. Muhammed Nejatullah Siddiqi

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The Equate project: An introduction to Islamic Project Finance

Journal of Project Finance, Vol 5, Issue 4; New York; Winter 2000 Read More

Geniza: The Unfolding Truth

Mohammed Imad Ali: In the mirror of history were the earlier generations smarter or are we? Read More

Islamic Economics Needs a Great Deal of Creative Thinking: Dr. Umer Chapra

Riba in Islam

The Foundations of Islamic Finance

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