The course was organized by the Islamic Development U.K., in cooperationwith the Islamic Development Bank, Jeddah, Saudi Arabia, andLoughborough University, Loughborough, U.K. More than 100 guestspeakers, organizers, and participants attended.The participants were very active in panel discussions. The topicsincluded Islamic banking and fm ance, Islamic economics, economicdevelopment from the Islamic perspective, the creation of money, therationale of prohibiting interest and its prohibition in western literature,debt, equity, Islamic fund management, the role of zakat in the eradicationof poverty, Islamic finance in the West, and the new halal investmentcompany in Europe. As a starting point, Dr. Umer Chapra presented a paper on the presentstate of Islamic economics. He emphasized the importance of economicsin explaining the fall of Muslim power. He also pointed out the effect ofIslamic values and institutions, including zakat and the abolition of interest.He added that now it is time to solve the practical problems that theMuslim countries are facing and also to show ways of realizing theIslamic vision of a society where development is taking place with justice.Dr. Monawar Iqbal talked about the rationale of Islamic banking andthe services that people are in need of, e.g., investment in the form ofmudarabah, musharakah, and murabah.Attention was juid to the following features of Islamic banking: risksharing, productivity as compared to credit worthiness, moral dimension,equity, efficiency, stability, and growth.The experience of Islamic banking in Pakistan, Iran, and Sudan wasdiscussed. In addition, there was a discussion on multinational entities(e.g., Islamic Development Bank). Dr. Iqbal emphasized the major problemsfacing Islamic banking such as lack of profit sharing on the assetside, adverse selection, moral hazard, lack of project appraisal machinery,lack of project monitering, defaulters and the issue of penalties,illogicality of the Islamic financial market, short-term asset structure,excess liquidity, short-term placement of funds, lack of a lender of lastresort, difficulties in issuing letters of guarantee, and taxation.Despite these problems, 192 Islamic banks were operating by the endof 1996. An analysis of 166 of these banks was made by Dr. SamirShaikh, who described their current profile and showed that their netprofit in 1996 was $1,683,648. On the suggestion of Dr. Tarigullah Khanthe principles of Islamic finance were grouped into the following categories:benevolence, sharing principle, deferred sale-principle, andsharing-cum-deferred sale ...
CITATION STYLE
Al-Zu’bi, B. (1998). Islamic Economics, Banking and Finance. American Journal of Islam and Society, 15(1), 162–165. https://doi.org/10.35632/ajis.v15i1.2210
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