This article argues that much of Scholastic and neo-Scholastic teaching on usury rests on practical considerations regarding redistribution and market instability. This aspect of usury is underappreciated by economists, especially those in the field of the history of economic thought. A core...

The constitution of Pakistan has disowned the interest-based transactions because of the conceptual foundation of Riba-prohibition as per the tenets of Quran and Sunnah. Since the Objectives Resolution in 1949, people of Pakistan have denied any transaction that keeps them on war against Allah...

The major objective of this study is to amplify the advantages of fostering interest-free microfinance (IFM) institutions in Ethiopia. Their economic, social, legal, technological and other upper hands over the other institutions are assessed. Some country-cases are presented, and an analysis is...

Modern Muslim scholars prohibit riba or interest, but they prohibit it on the basis of wrong reasoning or interpretation of the texts. Their faulty reasoning has led to confusion and difficulties in the implementation of Islamic banking and finance. This paper points our that these scholars...

Islamic finance has witnessed a phenomenal growth during the past couple of decades. However, this remarkable growth has also been accompanied by some challenges and dilemmas. Islamic finance today is at the crossroads where resolving these issues is a prerequisite for its future sustained...

I summarize the key points of the scholastic theory of usury following The Scholastic Analysis of Usury by John T. Noonan. Usury is the sin of taking interest on a loan without a just title. According to Scholastic moral theology, interest on loans may be justified by the extrinsic titles to...

This article analyses facts about the community of former bank workers (x-banker), who migrated from both Indonesian conventional banks and Islamic banks. The hijra is a purification movement for understanding usury banking as a reaction to the failure of constructing sharia principles in...

In the past, tomorrow and tomorrow, it seems that the practice of riba is not easy to eliminate immediately. This is because already used to practice usury is always a hope to achieve profit. The essence of the practice of usury is the exploitation of the rich (strong) on the weak in a way that...

This paper finds that the dividend signaling hypothesis is able to explain the phenomenon of asset concentration in short- and medium-term investments in the Islamic interest-free banking system. To maintain a stable dividend payout, managers of Islamic banks will prefer to invest in instruments...

This paper finds that the dividend signaling hypothesis is able to explain the phenomenon of asset concentration in short- and medium-term investments in the Islamic interest-free banking system. To maintain a stable dividend payout, managers of Islamic banks will prefer to invest in instruments...

Dr. Uzair's thinking on Islamic economics dates back to his student life at the Allahabad University in India where the present reviewer had the privilege of being associated with him, in a group of young men inspired by Maudoodi's writings advocating reconstruction of knowledge on Islamic...

We begin by giving a summary of the main points. The book is chiefly concerned with prohibitory rules unanimously acknowledged in principle by all Muslims i.e. riba (unlawful advantage by way of excess or deferment) and gharar (uncertainty, risk and speculation). It is also concerned with...

There is a vast literature on regulatory, monetary and institutional aspects of traditional banking system. This is not true for the interest-free Islamic banking framework. In this paper, the functions and tools of central banking in an Islamic framework are evaluated, and suggestions for...

Islamic financial facilities like profit and loss sharing (PLS) are flexible enough to provide built-in stabilizers to the investment process. The amplitude of all phases of the business cycle will be smaller in an Islamic economy compared to advanced capitalist economies where the fixity of the...

This book is of uneven merit. It contains a fairly good account of the attitudes towards the institution of interest through the ages. It also contains a fairly elaborate critique of the various theories of interest which have sought to justify a return on capital in the form of interest....

Twenty years after the Dubai Islamic Bank and the Islamic Development Bank, Jeddah, were launched as modern banking institutions working on an interest-free basis, a stock taking is due. The book under review though written as a Ph. D. thesis at Stockholm University, Department of Business...

The article by Hamid Zangeneh and Ahmad Salam is a welcome departure in the Islamic finance literature, as relatively little has been written about the role of central banks in an Islamic financial system. The authors review the major functions of central banks, and then discuss how monetary...

The book is made up of an introduction, a conclusion and eight chapters. The first chapter deals with the historical development of Islamic banking. The second chapter discusses the prohibition of riba in the Qur'an, Sunnah and Islamic law (fiqh). Chapter three deals with the modern...

A gradual convergence of Islamic finance towards interest-based conventional finance is one of the major concerns in the progress of Islamic finance. An important reason for this one-way convergence in the rates of returns of the two sectors is the dominance of Islamic banking in the composition...

The main purpose of this paper is to present a theoretical model of an alternative fund-raising scheme for Muslim governments which are restricted by religious regulations against fixed-interest debt financing techniques. The proposed instrument is developed using the principles of a partial...

Prohibitions of interest and interest based income, proscribed by the Shariah law, have forced the Islamic banks and other financial institutions to develop special models of financing. Author examines the legal nature of various financial arrangements offered by the Islamic banks which could be...

This article provides a short overview of "riba", the principal feature of Islamic banking law. Riba refers to certain prohibitions against charging and paying interest on loans and prohibitions against certain other transactions to protect debtors. Sources of Islamic law are reviewed to explain...

Inefficiencies in mainstream credit markets have pushed selected households to frequent high cost payday loans for their liquidity needs. Ironically, despite the prohibitive cost there is still persistent demand for the product. This paper rides on the public policy objective of expanding...

This paper develops an analytic narrative examining an institution known as "The Exchequer of the Jewry". The prohibition on usury resulted in most moneylending activities being concentrated within the Jewish community. The king set up the Exchequer of the Jewry in order to extract these...

The development of capital markets in medieval Europe was shaped for centuries by the religious ban on lending money at interest. This paper examines how this prohibition developed as the outcome of strategic behavior by religious, commercial and political elites. A model is developed to analyze...

This paper is a presentation of a lecture delivered in a seminar at Bahria University. It includes a brief introduction of interest free banking in Pakistan. It includes constitutional obligations and court decisions

Islamic teachings are strictly against Riba (i.e. interest) because it involves exploitation. At present, Islamic banks, which claim to be interest-free financial institutions, are facing severe criticism for using Islamic tags for the similar products and services offered by the conventional...