ABSTRACT
Islam is the only monotheistic religion that currently bans interest on loans (ribā). This chapter analyses the origin, development, and impact of the regulation of ribā in Islam. The emergence of Islamic banking industry is described, including the challenges facing it in the present day. The economic function and cost of money are examined, and the need to protect the economically weak from possible exploitation by the strong is discussed, with emphasis on the moral nature of the borrower-lender relationship. A moral guidance for this problem is sought in the Qur'ānic precepts of purity and balance, two qualities associated with the divine names of al-Quddūs and al-Muqsiṭ.
Islam is the only monotheistic religion that currently bans interest on loans (ribā). This chapter analyses the origin, development, and impact of the regulation of ribā in Islam. The emergence of the Islamic banking industry is described, including the challenges facing it in the present day. The economic function and cost of money are examined, and the need to protect the economically weak from possible exploitation by the strong is discussed, stressing the moral nature of the borrower-lender relationship. A Qur'anic response to this problem is sought in the precepts of freedom, purity and balance associated with al-Quddūs and al-Muqsiṭ.
