How ethical is Islamic banking?
by Walid Mansour and Ben Jedidia Khoutem
Islamic banking is based on moral foundations that make it distinct from conventional banking.
Some argue that because of its foundation in Islam, Islamic banking may represent a more morally appealing
alternative. Yet, evidence shows that this is not the case. Indeed, the current practice of Islamic
banking has not been able to achieve its goals which are based on Islam's moral values: to enhance
justice, equitability, and social well-being.
- Still, the fact that Islamic banks duplicate many of the operations of conventional interest-based
banks causes some Islamic scholars to criticize them as disingenuous. They argue that the current model of Islamic
banks will inevitably place them on the same trajectory Western banks have followed in assuming ever greater risks
to make higher profits.
Explainer: What Is Islamic Banking?
- "There are potential pitfalls.
Goldman’s previous attempt to enter the market foundered amid claims its proposed sukuk did not
comply with sharia. Indonesia has scaled back its issuance of one type of sukuk due to similar
complaints. Malaysian scholars approved an Islamic credit card based on a transaction known as
baya al-ina, which Arab scholars have rejected as being too close to interest-based lending."
Big interest, no interest : The market for Islamic financial products is growing fast
- "This paper examines how the equation of Islamic economics with interest-free
banking in the current
discourse has not only distorted the meaning of Islamic economics but has also marginalized some of the most
important and even constitutive elements of Islamic economics, such as justice and poverty elimination."
'The Mythology of Islamic Economics and the Theology of the EastAsian Economic Miracle,'
M.A. Muqtedar Khan
- Muslim scholars generally equate riba with interest. They fail to see a vitaldistinction that needs to be drawn between
riba declared forbidden in the Quranand interest that has come to play a necessary and very useful role in modernfinance and economic policymaking.
Reform in Finance: Riba vs. Interest in the Modern Economy,
By Abdur Rab
- The interpretations given to the word Riba and to the precepts have been extremely varied.
According to Dr. Fazlur Rehmam, Riba is usually translated in Urdu by the word Sud (Interest),
which is of Persian origin and literally means profit. Sud (Interest) in his opinion is not
synonymous with the Quranic term Riba, but is synonymous with the Arabic word Ribah,
the literal meaning of which according to Quranic usage is to grow, to prosper. Dr. Rehman and before him,
a number of prominent Muslims found themselves inclined to sanction bank interest as permissible in Islam,
while some other advocated a "change in the name by calling "interest" as service charges.
The concensus is that any income, which a person makes by trading in money as opposed to trading
in commodities is Riba and is totally prohibited in Islam.
World of Islam Today: Towards Interest-Less Banking, By S. Aizaz A. Rizavi
- Is Tawarruq Really Islamic Finance?
- The Riba-Interest Equation and Islam: Reexamination of the Traditional Arguments,
Dr. Mohammad Omar Farooq
"...purpose of this paper is to expose the serious and fundamental weakness in the traditional arguments that are offered as rationales for prohibition of interest."
- How ‘Islamic’ is Islamic Banking? Feisal Khan, Journal of Economic Behavior & Organization 76 (2010) 805–820
- Does Islamic finance have a place in Canada? Jan 23, 2012
Macleans via Yahoo! Canada Finance -
Tarek Fatah is the founder of the Muslim Canadian Congress, a liberal-minded grassroots organization. He is also the author of Chasing a Mirage:
The Tragic lllusion of an Islamic State, among other works.
Walid Hejazi is associate professor of international business
at the University of Toronto’s Rotman School of Management, where he is currently teaching an MBA course on Islamic finance. [see also:
The Huffington Post]
- Reviewing the Concept of Shares: Towards A Dynamic Legal Perspective,
Faizal Ahmad Manjoo
- Kuwait- A big question mark on Islamic finance, MENAFN - Arab Times - 29/08/2013 By Muhammad Zubair Mughal
- There is no consensus on Islamic Banking, says a Mufti @ Ask The Mufti :: Ask Your Sharai Questions (in Urdu)
- Preying Upon the Gullible Muslims, Omar Khalidi
- Missing Link in Islamic Finance Hubs: Islamic Venture Capital, By Expert Contributor,
Mr. Rushdi Siddiqui
- Korean sukuk law rejection is a wake-up call, By MUSHTAK PARKER | ARAB NEWS, Dec 27, 2010
- Now, fatwa against insurance, Darul Uloom, Deoband
see also: 'The resolution of accepting life insurance policy,' by Islamic Fiqh Academy
- High Court stays Kerala’s Islamic banking plans,
Economic Times - Jan 5, 2010
- None of the Islamic financial institutions were trading in what caused the crisis or what was at the core of this crisis; namely financial derivatives,
or what came to be known as the "poisoned bonds".
"Imitating Traditional Banking Will Destroy Islamic Banking" by Lahem al Nasser,
- [pdf] The basic profit-sharing principle also bears very close
resemblance to the Jewish legal concept of the heter isqa (partnership clause) contract,
silent partnership profit-sharing arrangement, to avoid the Biblical prohibition of ribit.
- 'Islamic banks not fundamentally different from conventional ones,' BY
LUCIA DORE Khaleej Times Online, 18 March 2007
- [PDF] Islamic House Purchase Loans in Britain,by Elaine Housby
- [PDF] A
fully-fledged interest-free economy is not yet a
interest-free economy is a mystery
Grare's estimate, neither the "Islamic theodemocracy" nor the
"Islamic economy" of the Jamaat have been attained
Oil and a Paradox - those who buy oil get rich and those who sell it
- Islamic Banking – Reality and Myth
in stocks: Q:
Is trading in stocks permissible, or is it forbidden "speculation" or
- [PDF] Islamic
economy is not the. means we seek, but the. ends
For those who are unaware, an
Islamic economy is not socialism