A lengthy evolution has produced the modern conventional banking system. People used to interest-bearing transactions need a chance to be sufficiently moved to abandon interest. Setting up interest-free banks will call people to obey Allah's dictates for economic life. While
Pakistan is currently Islamizing its economy. During the transition between economic systems people are eager to see the new one implemented quickly. Once the Islamic system is completely in place, the current uncertainty will disappear. Since Pakistan will not return to the old system, its citizens must sincerely try to make an Islamic economy work; their efforts will fail unless they are fully determined. Unfortunately, Pakistani society contains some unprincipled elements. While most of the country wants Islamization, a small and well-connected minority is holding back.
The Pakistani government's numerous efforts to encourage interest-free banking, which can not develop immediately, need public support. No complete and viable model for such banking is available. The current interest-free methods of
The Islamic banking system is a very safe one. Shares of Dar Al-Maal Al-Islami worth $105 each until December 1981 shot up to $125 each when equity trading began in December 1982. Within the next five years, the stock is expected to be five to seven times as valuable. Although interest rates on various types of bank accounts have dipped below 9% worldwide, investors in the Islamic Gulf Investment Company, a DMI subsidiary, earn a return of 9% to 21% each year due to the company's profit-and-loss-sharing approach.
The demand for Islamic banking reflects an overall Islamic revival. Interest-free banking perplexes foreign observers. Conventional banking teaches that a non-interest bank cannot flourish because it opposes the profit-maximization motive of the rest of the financial world. However, the actual situation is that Islamic financial bodies now hold an estimated $80 billion in assets. Two causes of the growth of the Islamic financial sector include: the increase in oil wealth in the
International steps have been taken to establish Islamic economies in Muslim nations.
The principal goal of founders of Islamic banks is obedience to Allah in economic life. The high ethical level of their dealings distinguishes Islamic banks. The absence of interest in the Islamic banking system spurs greater investment and aids overall development. A connection exists between economic and social progress. Society benefits from the alms paid in
Efforts are in motion to consolidate the positions of existing Islamic banks, to ease the founding of new Islamic banks, and to develop close relations between the International Association of Islamic Banks and Islamic nations. The consolidation-seeking committee will primarily discuss a seven-point paper that the chairman of the Dubai Islamic Bank recently presented.
When Pakistan became independent, Muslims thought that a new, Islamic socioeconomic order would replace the old, oppressive one they had been enduring. However, such an order did not materialize. The Council of Islamic Ideology and a group of economists worked for nearly three years to produce two reports on interest-free banking and zaka.