Islamic Finance

Zaka has some notable features and can be put into practice.

There is a fundamental difference between taxes and estate duties and the Islamic institution of zaka. Although some might feel that zaka ought to be treated as a tax, this opinion evinces an improper understanding of what zaka truly is. Zaka is due only on Muslims, whereas all citizens pay taxes. Tax rates vary; zaka rate are uniform. The items subject to zaka are not necessarily the same as those subject to taxation. Furthermore, zaka is an act of religious devotion for the believer. After looking at the

We may reach a rough idea of Islamic alternatives to current practices in commodity, currency and corporate-stock trading if we evaluate them with reference to the Islamic economic framework. In general, spot trading and forward deals are halâl. Futures trading, however, is a different matter because futures are not commodities. Shari`a prohibits trade of non-entities.

While Westerners are becoming more and more interested in Islamic banking and finance, compatibility between the banks of the two systems still needs development. Certain rules bind Islamic banks and finance houses. Several means may enhance the process of contract negotiations between Western and Islamic institutions.

Pakistani banks are undergoing rapid changes. Accordingly, the central bank has been given full supervisory and regulatory jurisdiction over all investment banks and housing-finance companies as part of an effort to boost depositor's confidence. The government aims to privatize and deregulate the economy. Despite

An attempt is made to provide some basic information on the fundamental principles of Islamic economics and of Islamic banking. A description and explanation of how and why such Islamic institutions are feasible is undertaken. Practical and effective ways of conducting economic relations in general, and banking in particular, are discussed in the context of the ways of the modern world.

The board of directors of the International Association of Islamic Banks can amend the organization's constitution, elect the president and vice-president of the body, sanction the rules and procedures of the international group, and appoint its Secretary General. Furthermore, the directors can determine the entrance charge and the subscription rate of member banks. They approve annual budget estimates and the closing of accounts.

Islamic law and tradition dictate that money be used for production and for collaboration in entrepreneurial activities. Acceptable returns are expected under Islamic structures through the use of Islamic financial instruments, trade and commodity finance, property management, and leasing. Large Western commercial banks such as Citibank and ANZ Grindlays act as wholesale-service providers for Islamic financial institutions, offering guarantees that the money deposited with them by Islamic institutions is invested in a halâl manner.

Islamic banking has a history and a basis in

Using Islamic banking, it is possible for one to save but not hoard wealth because the money deposited in a bank circulates throughout the economy. Islamic banks recognize that people's desires to earn profits are a part of human nature. Usurious bank's lack of concern for small deposits is evidence that they are not interested in community welfare. By contrast, Islamic banks are interested in the public good and want people to save whatever they have.