Riba free banking: A profile

There is continued disagreement amongst Islamic legal scholars and Islamic economists regarding interest rates and Islamic banking. Some Western-influenced thinkers hold that a small degree of interest is not against the spirit of al-Qur'an. Others hold that the rate is not a question--interest is completely banned. There are some doubts regarding the profitability of Islamic banks that do not engage in interest operations. Islamic banks need to both be in compliance with the shari`a and be solid banking ventures. Interest-free banks are to be set up in the mudaraba format--with depositors, investors. bank personnel, and borrowers sharing in profits. Trade, in line with Islamic values, will be the drive of the banks. Profits are to be optimized. Excessive spending, gambling, and dealing with usury are Islamically impermissible. Credit arrangements, as long as no interest is involved, are allowed. In Islam, risks of loss and chances of return are to be shared by all involved.