The Problem of Interest and Islamic Banking in a Comparative Perspective: The Case of Egypt, Iran and Pakistan

Nomani Farhad ()
Additional contact information
Nomani Farhad: The American University of Paris

Review of Middle East Economics and Finance, 2003, vol. 1, issue 1, 36-69

Abstract: As a growing economic sector in many Muslim countries, Islamic banking has its roots in the application of the Shari'a. This is because Islamic banking is, in principle, based on legally recognized financial contracts and transactions that should be free of riba and gharar, both of which are interpreted somewhat differently by major Sunni and Shi'i schools of law. The objective of this study is (a) to shed light on the development of the debate on riba among Sunni and Shi'i scholars and the position of governments on the problem of interest-free banking in the twentieth century in Egypt, Iran and Pakistan; and (b) to study the implications of this debate for Islamic financial contracts. It is concluded that the expansion of a modern and viable internationally orientated Islamic banking and finance depends mainly on the development of financial capital markets, more independent and transparent central banking in Muslim countries, and a more innovative and flexible approach to Shari'a by different schools of law in Muslim countries.

Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.2202/1475-3693.1003 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:rmeecf:v:1:y:2003:i:1:n:4

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/rmeef/html

DOI: 10.2202/1475-3693.1003

Access Statistics for this article

Review of Middle East Economics and Finance is currently edited by Ghassan Dibeh

More articles in Review of Middle East Economics and Finance from De Gruyter
Bibliographic data for series maintained by Peter Golla ().