The Islamic Economics And Banking Theories

The contemporary economic systems have failed to solve the economic problems of mankind and the Islamic economic order presents a ray of hope for the redemption of humanity from the quagmire of economic problems. The defeat of socialism is too obvious to be documented after what has happened in Eastern Europe and USSR during the last few years. The track record of capitalism is also not very promising. Although a small minority has achieved unprecedented high material standards of living, yet a vast majority of the people on the globe is still living under conditions of abject poverty. Even in the industrially advanced countries the problems of unemployment, inflation, poverty amidst affluence, unequal distribution of wealth, frequent bouts of business recessions, environmental pollution, and ecological imbalance, to name a few, still bedevil man's present life and threaten his future. We need not mention that the focus of prosperity of these countries is uni-directional. It ...

The bank would be established on the principles "Shirkat-al-Enan"( is that two or more persons participate in an enterprise with fixed amounts of capital agreeing that they will work jointly and share in profit or loss in specified proportions), that is, a number of persons providing share capital to be jointly invested, hereafter called 'shareholders'. the shareholders would finance enterprise on the basis of partnership or mudaraba and render other services against fees or commission. The minimum number of shareholders must be two. No maximum number can be fixed, theoretically, but for operational convenience as well as other reasons some upper limit, varying with local conditions is appropriate. the number of shareholders should not be too great, and in their best interest, should be kept to the minimum, though always more than two. The amount of capital provided by each shareholder may be equal or may vary. ideally, share value might be fixed at Rs.100,000 or ...