Islamic banking spreads its wings

Modern Islamic banking is less than thirty years old but its bases -- community orientation and prohibition of riba (interest) -- are fundamental to Islam. Islamic banks were established according to the desire of rulers of wealthy Muslim countries but also in response to community demand. South Africa's Islamic Bank Limited is one such bank. Islam forbids hoarding and riba but encourages trade and investment for profit. Amana (current accounts) are deposits or transfers of money that earn no income. Qard hasan are social-service-oriented, interest-free personal loans. Four financial instruments based on profit sharing between depositor and bank do earn income: mudaraba (profit sharing of earnings from deposits invested by bank); murabaha (contract on assets); musharaka (partnership of a bank and a business); and ijara (equipment-financing contract whereby bank purchases equipment and leases it to industry). Islamic Bank Limited returns 12%-14% and offers a wide range of servic