Evolution and trends in Islamic banking

By Omoh Gabriel
Non interest banking, Islamic banking or participant banking is banking  activity that is consistent with the principles of Islamic law  (Sharia) and its practical application through the development of Islamic economics . Sharia prohibits the payment or acceptance of specific interest or fees known as Riba  or usury  for loans of money. Investing in businesses that provide goods or services considered contrary to Islamic principles is also Haraam  (forbidden). Interest-free banking seems to be of very recent origin. The earliest references to the reorganisation of banking on the basis of profit sharing rather than interest are found in Anwar Qureshi (1946), Naiem Siddiqi (1948) and Mahmud Ahmad (1952) in the late forties, followed by a more elaborate exposition by Mawdudi in 1950.

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