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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Money And Banking In An Islamic Economy
Mohamed Ariff (Ed), Monetary and Fiscal Economics of Islam, International Centre For Research in Islamic Economics, King Abdul Aziz University, Jeddah,pp.145-186.
Dr M. Umer Chapra
INTRODUCTION

The present-day world is experiencing a number of economic ills including poverty of a large proportion of mankind, social and economic injustice, gross inequalities of income and wealth, high rates of unemployment, economic instability,... Read More

Islamic Banking: Theory and Practice in Iran
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Comparitive Economic Studies
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World of Islam Today: Towards Interest-Less Banking
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The Need and Econimics of Cooperation Among Islamic Banks
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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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