Ethical Investment and the Social Responsibilities of the Islamic Banks

Abstract

While ethics and financial investments seem to be mutually exclusive, ethics have recently become an important issue in the financial field. There is an increased emphasis on the role of faith and religious beliefs on ethical business practices for some investors who not only seek profits through their investments but they also require the achievement of a moral duty beside the quest of wealth accumulation. Since investors become more aware of the benefits of Ethics and socially responsible investment, the interest in Islamic investing and ethically based banking is also increasing. Among the most important objectives of the Islamic finance in general and particularly the Islamic banks, is the establishment of justice and elimination of exploitation in business transaction. This can be done by the prohibition in of all sources of illegal "unjustified" enrichment and the prohibition of dealing in transactions that contain excessive risk or speculation. The paper seeks to explain that the Islamic bank services represent an example of ethically and socially responsible investment.