ABSTRACT
The concept of Islamic banking, economics and finance (IBF) goes back to the early days of Islam (595 CE) and the rise of the Islamic Empire from Caliphate (632-661 CE) to Al-Andalus (Spain - 1031 CE), Othman and to Moghul empires (1530 CE). However, its recent operation started in 1947 with the independence of Pakistan followed by an Egyptian town of Mit Ghamr’s (MG) in 1963. The aim of MG was to provide interest-free financial services based on IBF principles. Its products became popular throughout Egypt and spread to neighboring Islamic countries. Currently, there are more than 250 Islamic banks, operating in 65 countries, worth 3.5 trillion dollars in 2020 (https://www.arabianbusiness.com/islamic-finance-assets-forecast-be-worth-3-2trn-by-2020-641156.html">www.arabianbusiness.com/islamic-finance-assets-forecast-be-worth-3-2trn-by-2020-641156.html). This chapter briefly reviews the historical development of IBF products from the early days of Islam to the 21st century. It addresses the issue of risk associated with the IBF industry. A brief review related to characteristics inherent within the IBF industry that may safeguard the global finance industry during global financial crises is also explored.
