Anatomy of Islamic banking

Professor Ahmed al-Naggar of the International Association of Islamic Banks gave an interview to Economic Outlook in which he discussed the basic principles of Islamic banking. He explained that money in Islam is not seen as a commodity and that the economic structure relies on capital formation from the masses. The professor, in response to an inquiry about why people would save if there were no interest, argues that only large investors change their saving habits with changes in interest rates the masses will continue to save at the same rate even in an interest-free system. The professor relates that the principles of Islamic banking are clearly distinct from those of the traditional banking system and says that Islamic banking principles applied in Egypt have already shown success in practice.