Islamic banking and its socio-economic aspects -- II

Although some say that interest protects people from inflation, actual statistics refute this argument. Inflation has numerous causes and effects. Islamic banks have a more direct stake in the performance of firms they finance, and this greater stake helps the society at large. Low-income people and middle-class savers fare better in an interest-free system, particularly when prices are climbing. Interest has kept countries from protecting their savings from inflation. Interest does not galvanize an economy's savings in a superior way. Islam is not against saving; rather it opposes hoarding and idle wealth. Zaka rates have a pattern: they increase as the element of chance increases. Islamic economics does not count financial capital as a factor of production. Money is not a commodity to be bought and sold. In fact, the trading of money as a commodity has led to troubles in the world's financial system. As imbalances continue in the world economy, correcting them becomes mor