Islamic Banking Practices
Islamic Law and Prohibition of Riba
Abstract
Islamic banking has become popular not only in Islamic world but also in non-Islamic countries. The number of Islamic banking service providers is increasing due to entry of new Islamic banks and some conventional banks have also opened units designated to Islamic banking. It is therefore, crucial to analysehow much Islamic are the products offered by Islamic banks. This paper makes critical analyses of Islamic banking practices in the context of Islamic law and theprohibition of interest through examining the product known as ‘Murabahah.’ It is found that certain features of ‘Murabahah’ are in direct conflict with Islamic law and need to be revised in order to make it purely an Islamic product.
References
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