An overview of Islamic banking in evolution

Until recently, Muslims lived under a financial system run by foreign rulers. Even after colonialism ended, Western social influence has caused some Muslim countries to continue to use riba. The various Islamic schools unanimously interpret riba to include all types of interest. Islamic banking began in Egypt in the 1960s. In 1970, Muslim foreign ministers agreed to establish an international institution for Islamic banking. In 1975, the Islamic Development Bank (IDB) was founded. The Association of Islamic Banks began, in 1981, to promote cooperation among Islamic financial institutions. The most focused drive for Islamization has been in Pakistan. Islamic banking seeks to realize the goals of an Islamic social order: adherence to shari'a, justice (al-`adl), beneficence (al-ahsan), and risk-sharing. The Pakistani State Bank cites three principal financing methods used in an interest-free system: trade-oriented deals like mark-ups and leasing; investment-oriented deals like m