Subject category:
Finance, Accounting and Control
Published by:
Centre for Islamic Banking and Finance
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Abstract
This is the first of nine in the Islamic Banking and Finance technical note series (103-016-6 to 103-024-6). Islamic banking as a concept was developed as a result of the religious prohibition on earning interest in the conventional banking system. It is not only within Islam, but equally the other major religions such as Christianity, Judaism, and Hinduism, do not permit usury. To that extent there is a unanimously harsh verdict, by the major religions, against the charging of interest. Islamic Sharia Laws provide rules that cover the allocation of resources, management, production, consumption, capital market activity and the distribution of income and wealth. They also define, in broader terms, a general framework for designing monetary and banking systems. The pioneers of Islamic economic thought developed their ideas of carrying on banking business based on Islamic laws or, as it became known, Islamic economic principles. The concepts were based on the use of productive (real) investment rather than of monetary investment that attracts interest. Islamic principles allow for the replacement of interest by a return obtained from investment activities and operations that actually generate extra wealth.
Subject category:
Finance, Accounting and Control
Published by:
Centre for Islamic Banking and Finance
Subject category:
Finance, Accounting and Control
Published by:
Centre for Islamic Banking and Finance
Subject category:
Finance, Accounting and Control
Published by:
Centre for Islamic Banking and Finance
Subject category:
Finance, Accounting and Control
Published by:
Centre for Islamic Banking and Finance
Subject category:
Finance, Accounting and Control
Published by:
Centre for Islamic Banking and Finance
Subject category:
Finance, Accounting and Control
Published by:
Centre for Islamic Banking and Finance
Subject category:
Finance, Accounting and Control
Published by:
Centre for Islamic Banking and Finance
Subject category:
Finance, Accounting and Control
Published by:
Centre for Islamic Banking and Finance
About
Abstract
This is the first of nine in the Islamic Banking and Finance technical note series (103-016-6 to 103-024-6). Islamic banking as a concept was developed as a result of the religious prohibition on earning interest in the conventional banking system. It is not only within Islam, but equally the other major religions such as Christianity, Judaism, and Hinduism, do not permit usury. To that extent there is a unanimously harsh verdict, by the major religions, against the charging of interest. Islamic Sharia Laws provide rules that cover the allocation of resources, management, production, consumption, capital market activity and the distribution of income and wealth. They also define, in broader terms, a general framework for designing monetary and banking systems. The pioneers of Islamic economic thought developed their ideas of carrying on banking business based on Islamic laws or, as it became known, Islamic economic principles. The concepts were based on the use of productive (real) investment rather than of monetary investment that attracts interest. Islamic principles allow for the replacement of interest by a return obtained from investment activities and operations that actually generate extra wealth.
Related
Subject category:
Finance, Accounting and Control
Published by:
Centre for Islamic Banking and Finance
Subject category:
Finance, Accounting and Control
Published by:
Centre for Islamic Banking and Finance
Subject category:
Finance, Accounting and Control
Published by:
Centre for Islamic Banking and Finance
Subject category:
Finance, Accounting and Control
Published by:
Centre for Islamic Banking and Finance
Subject category:
Finance, Accounting and Control
Published by:
Centre for Islamic Banking and Finance
Subject category:
Finance, Accounting and Control
Published by:
Centre for Islamic Banking and Finance
Subject category:
Finance, Accounting and Control
Published by:
Centre for Islamic Banking and Finance
Subject category:
Finance, Accounting and Control
Published by:
Centre for Islamic Banking and Finance