Prince Mohammad Al-Faisal began an experiment in Islamic banking, insurance, and economics seven years ago. The Faisal Islamic Banks are expanding and, along with the Islamic Investment Co. (IIC), exist in several countries. A group of Islamic Solidarity companies is being established in several nations as well. A holding company called Dar Al-Maal Al-Islami (DMI) was founded in 1981 and encourages
Muslims desire to live according to Islamic principles, including those concerning finance. A fundamental principle in this area is the prohibition of riba (interest in all its forms).
In FY 1985, DMI (Dar Al-Maal Al-Islami) improved client services and increased returns on investments. DMI performed successfully despite the world's unstable economic situation. In the future, DMI's plans to offer a broader range of financial services and to increase profits without hampering prospects for future growth.
Financial-ratio analysis helps one evaluate the performance of Islamic banks in Egypt. Egypt presents an appropriate case study for an appraisal of Islamic finance because: both conventional and Islamic banks exist in the country, the nation is neither oil-rich nor poor; the economy offers a diverse range of products and services; and there is much potential for investment in Egypt's huge markets for goods and labor. The financial-ratio analysis uses seven groups.
Unlicensed Islamic investment companies have had a major effect on the Egyptian economy since 1985 and have adversely affected banking and economic policy. They kept private books and could switch back and forth between Egyptian and foreign currency. Deposits in these companies were approximately $4 billion (compared to $25 billion in Egyptian banks). Investors in these institutions lacked both clear legal status and governmental protection of their investments. Such enterprises engaged in speculative activities and paid annual interest rates of 24% on deposits.
Islamic countries must cooperate to make economic progress. General and secondary rules are necessary to foster successful joint projects. Muslim countries are single-good economies.
Although the costs and taxes of the Faisal Islamic Bank of Sudan increased substantially during the year 1409 AH, the bank's earnings increased by 38%. There has been a substantial rise in its short and medium-term investments. It gave out £1 million in zaka and donation funds. The world's economy in 1988 performed better than expected. Sudan's economy grew an estimated 6.1%. The government is striving to advance the country's mining sector. The trade deficit rose 132%, the money supply 37%. Faisal Islamic Bank's assets and liabilities grew 29.1%.
Since economic behavior is merely one sphere of human activity and since religion addresses all spheres of one's life, economics must be a component of religion. The Qur'ân as well as developments in Western economic thought support this understanding. An economic system may consist of three components: its precepts and philosophy; its economic principles; and its methods of calculation. How a system functions is related to what it values and deems important. Shari'ah does not dictate every small detail of an Islamic economy; the system has room to develop and bend.