Islamic Finance

Despite the establishment of dedicated global Islamic banking units by J.P. Morgan Chase and Deutsche Bank, considerable apprehension exists that the promise of Islamic banking is not being fulfilled. Instead of quality investment and deal flows, product innovation, and financial reforms, there is a perceived lack of product innovation, capital flows, regulatory bureaucracy, and quality deal flows. At least two law firms in London have cut back drastically. Another target of blame is the failure of

In interviews at the World Bank/IMF Annual Meetings in Prague at the end of September 2000, Islamic Banker raised a number of issues with the IDB's President. IDB was to have side meetings with the finance ministers of the 53 IDB member states to review the priorities of the members as well as to review and discuss the IDB's constructive program of coordination and cooperation with the World Bank. The IDB does not impose uniform regulations or accounting standards, confining its role to offering technical assistance.

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Central banks usually have three purposes: to issue a country's currency; to shape monetary policy; and to lend the government money in dire emergencies. A central bank in an Islamic economy will, like other central banks, seek economic expansion and try to smooth economic fluctuations. The ideas of '

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The central economic problem is dealing with law of scarcity and the fact that resources are limited. An Islamic economy is different from a conventional one in that Islamic economic actors do not have complete freedom.

A Mudarabah is a joint venture between a financier and manager (Mudarib) of a venture. It is a financial instrument containing no interest. The mudarib and financier share profit according to an agreed ratio, while the financier alone bears the risk.

Pakistani investors have several investment options. Some investors prefer to have guaranteed-return holdings, such as bonds, in their portfolios. Stocks are the most prominent of investments without such a guarantee. Pakistan's two stock exchanges are in Karachi and in Lahore. Investors examine many factors when deciding whether to buy a stock.

Mudaraba involves simple profit sharing and has been used throughout the ages of Islamic history.

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