Islamic Finance

The author discusses the categories of individuals to whom Zakah is distributed in Islamic law and he describes the guidelines of giving to each group. The first two terms discussed are joined as al-fuqara' wa'l-masakin. These are individuals in poverty and needing assistance. Al-'Amilina 'Alayha includes the officials who distribute and administrate the zaka fund--they are paid regardless of their financial status. Al-mu'llafatu Qulubuhum refers, most jurists hold, to a certain group who lived in Mecca during the Prophet's time.

Zaka is a crucial element of Islam.

Human beings are mortal creatures, and life on earth is short. The material things of this life enchant the physical element of a human and have an effect on a person's ego. In al-Qur'an, the comfort of this world is made mention of.

Though the concept of distributive justice has swept the Western world, third world countries are still grappling with institutional flaws that preclude the success of social welfare measures. Because of historical problems, the banking systems in many developing countries are not conducive to the distribution of wealth. The problems of distribution have been exacerbated by the recent growth experiences of these nations. According to the principle of

Banks play a crucial role in the development of a viable Islamic economic system. Islamic banking is not just an interest-free banking system, it must also promote the goals of

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Islamic banking' is banking conforming to the shari`a. Islamic banking is based on the prohibition of riba, an unnecessary and undesirable feature of traditional banking.

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Islamic financial institutions exist as a result of the Islamic prohibition against riba. Although the theory of Islamic banking is widely reported on, the practice of Islamic banks has received relatively little attention.