chapter  26
12 Pages

Islamic banking

ByHussain Rammal

The Islamic fi nancial system is based on the teaching of the Qur’an, which prohibits the use of interest in economic activities (Saeed 1996 ). This prohibition meant that historically a section of the Muslim population stayed away from conventional money markets. The development of the Islamic banking and fi nance sector and the establishment of Islamic banks have provided an alternative for Muslims to have access to interest-free halal (permissible to consume) fi nancing options (Siddiqui 1994 ).