Islamic banking: consensus still sought on important issues

As wealth stemming from oil found its way into Gulf hands in the 1970's, the amount of money Muslims had in the banking industry increased. Whereas devout Muslims had long kept money in conventional banks without taking any interest payments, the idea came to some believers that interest-free banking ought to be offered. The Islamic banking industry borne out of this sentiment now holds between $50 and $80 billion in deposits. The first Islamic bank was a small one in Egypt; the Islamic banking field became well known in the 1970's with an institution established in Dubai and the Islamic Development Bank set up in Jeddah. In Islamic economics, it is said that money should not be produced from money. Rather, investments should be in real ventures and risks should be shared. Islamic banking is based on this idea of risk sharing. Since investors, in actuality, do not like to take risks and do not like money-losing ventures, Islamic banks have opted for short-term mark-up deals in