Feasibility of commercial banking without rate of interest and its socio-economic significance

Interest is a key element in modern banking. Typically, the longer one forsakes one's liquidity -- the longer one commits one's money -- the greater the interest returned. The Qur'an prohibits interest with clarity. According to shari`a, bank interest is nothing other than usury. The world's banks do not operate under a standard set of regulations. Banking practices are adaptable and change with the legal environment of the bank. Thus, it is not unprecedented to subject banking to the laws of shari`a. Riba-free banks (RFBs) must embrace only halal practices. The resources of RFBs are to come from the savings of society. The interest rate is not a motive for saving. RFBs can offer varying deposit schemes. They will be involved in direct investments; there is a trend toward this sort of investment among conventional banks as well. These banks may earn income without resorting to techniques like bay` al-wafa, which are tricks that barely avoid interest. Interest-free banking