BANKING WITHOUT INTEREST

Jana Ilieva (), Natasha Ristovska and Saso Kozuharov
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Jana Ilieva: University of Tourism and Management in Skopje, Macedonia
Natasha Ristovska: University of Tourism and Management in Skopje, Macedonia
Saso Kozuharov: University of Tourism and Management in Skopje, Macedonia

UTMS Journal of Economics, 2017, vol. 8, issue 2, 131-139

Abstract: In recent years, there has been increased global awareness of Islamic finance. This topic is mainly opened with respect to the great financial crisis that mostly hit the banking system and the financial markets and caused many bank bankruptcies and state interventions. This paper analyzes the basic principles of Islamic banking. The absolute prohibition of receiving and giving interest (Riba) and profit-and-loss sharing (PLS) paradigms are elaborated in detail; they are primarily based on mudarabah (profit-sharing) and musyarakah (joint venture) concepts which nowadays are becoming an accepted way of doing business in several Western multinational banks. An overall comparison of the advantages of Islamic vs. conventional banking is also given. Islamic finance technology solutions have matured and they will face various challenges in the following decades, due to conventional banks offering, increasingly, Islamic products. The need for a more comprehensive environment and regulatory framework is emphasized, so that Islamic banking development can be ensured.

Keywords: Islamic; law; finance; banks; growth (search for similar items in EconPapers)
JEL-codes: G20 K22 K33 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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