Banking without interest

• Main Author: Siddiqi, Muhammad Nejatullah (Author)
• Format: Book
• Language: English
• Published: New Delhi Markazi Maktaba Islami Publishers 2003; ©2003
• Subjects: Banks and banking; Interest (Islamic law)
• Online Access: Click Here to View Status and Holdings.

 Banking Without Interest demonstrates that banking institutions can operate without difficulty if the principle of profit-sharing is substituted for the practice of fixed interest payments. This applies to commercial banking as well as central banking. Explaining with numerical examples how neither the creation of credit nor control over its supply would pose any problems in the change-over from interest to profit-sharing, the book also deals with such issues as bills of exchange and supply of short-term interest free loans to businessmen, consumers and the government. The author also discusses the possible role of commercial shares and loan certificates in the interest-free financial market. He suggests a number of new 'instruments' which the central bank can use, in the absence of the Bank Rate, for controlling the volume of credit.