Islamic banking in a bind?
Without a doubt, Islamic finance has increasingly become an integral part of the global financial system, with Islamic banking playing a lead role in this new trajectory in many parts of the world. Islamic banking assets, deposits and financing have been growing at double-digit pace annually. In recent times, Islamic banking has attracted much international attention, especially in the aftermath of the global financial crisis of 2007-2008 which showed that Islamic banks are generally more stable than their conventional peers, although empirical evidence is admittedly mixed. A unique feature of Islamic finance is that it is interest-free with many ethical safeguards such as zero space for speculation, ambiguity, uncertainty, short selling, etc. In a sense, Islamic banking is doubly safe, as it is subjected to both [Shari’ah] screening and conventional oversights. Be that as it may, the fact remains that Islamic banking products are strikingly similar to the conventional ones, the only differentiating factor being the Shari’ah compliance. In other words, Islamic banking products are no more than Islamised versions of conventional banking products. It is not difficult to understand why this is indeed the case.
Islamic finance , Islamic banking , Islamic banks
Abdul Kareem, Mohamed Ariff. (2019). Islamic banking in a bind? IF Hub, 3 (September 2019), pp. 1-10.