Islam proposes that the banking systems that operate on the basis of an ex ante fixed rate of interest be replaced by a profit-sharing system in which the rate of return to the financial resources is not known and is not fixed prior to the undertaking of the transaction. While in Islam interest is forbidden, trade and profit are permissible and in fact encouraged. An uncertain rate of return based on profits would thus be consistent with Shari'ah. The replacement of an interest-based system by an alternative profit-sharing system raises a number of fundamental theoretical, practical, and policy questions. The papers in this volume all address one or more of the basic questions at the theoretical level.

Theoretical Studies in Islamic Banking and Finance

Mohsin S. Khan

Business & Money

Inst for Research & Islamic Stds

<p>Since its founding in 1964, the IMF Institute has provided macroeconomic management training to over 20,000 officials from almost all of the International Monetary Fund’s 183 member countries—more than 13,000 at IMF headquarters in Washington, and about 8,000 overseas. This volume compiles some of the analysis that the Institute uses in its macroeconomic training to address key questions that policymakers face in managing their national economies. The chapters, by IMF staff and external economists, cover salient topics in monetary, fiscal, and exchange rate management and show that there are no definitive prescriptions for effective economic policymaking, but rather a range of options, and that any course of policy action has explicit pros and cons.</p>

Macroeconomic Management: Programs and Policies

Saleh M. Nsouli

Chorng-Huey Wong

Economics

Intl Monetary Fund

<p>Islam proposes that the banking systems that operate on the basis of an ex ante fixed rate of interest to replaced by a profit-sharing system in which the rate of return to the financial resources is not known and is not fixed prior to the undertaking of the transaction. While in Islam interest is forbidden, trade and profits are permissible and in fact encouraged. The papers in this volume all address one or more of the basic questions at the theoretical level. The represent a start in the attempt to introduce rigor into the analysis of Islamic banking and finance, thereby clarifying the nature of the basic relationships underlying the system.</p>

Religion & Spirituality

Abbas Mirakhor

Islam

Islamic Publications International

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Books by Mohsin S. Khan