Islamic banking

The author discusses the Islamic banking practice and the alternative Islamic financial instruments to conventional banking. The aim of Islamic banks is rid the banking system of riba , or interest-oriented institutions by providing a comprehensive range of services which will serve as an alternative. Dar Al-Maal Al-Islami (DMI) is cited as the lead institution which helped to extend the activities of Islamic banks from a national to an international level. Various Islamic financial instruments alternative to conventional banking methods that adhere strictly to the laws of shari`a have been established and now prevail as the standard for other Islamic banks. The ultimate objective is to replace the entire banking system with one that does not include institutions that deal in the charge or payment of interest.