A survey of critical literature on interest-free banking

Islamic scholars nearly universally agree that riba encompasses bank interest and that the Qur'an prohibits such interest. Pakistan and Iran say that their banking systems are now Islamic, and over three dozen Islamic financial institutions have been established internationally. While the theory of Islamic finance leans primarily toward mudaraba (trust financing) and shirka (partnership), in practice a number of other tools such as leasing, mark-up, and hire purchase are used. The critics of Islamic banking hold a range of opinions, e.g. that it is impractical, that it exercises an undesirable influence on the economy, or that certain Islamic banking practices do not really conform to shari'a. Several conceptual issues on profit-and-loss sharing exist. Among the economic issues linked with Islamic banking are profitability and growth. Musharaka and the purchase of property are two of the practices of Islamic banks. Some difficulties facing the field relate to defaulters, accoun