ISSUES IN ISLAMIC BANKING introduces the idea of a banking operation based on the Islamic principles of partnership and profit-sharing, free of interest. It demonstrates how the creation of high powered money as well as of bank money in the Islamic system can be firmly linked with genuine possibilities of production, minimizing the chances of inflation. Comparing and contrasting the Islamic system with the interest-based banking system it shows the superiority of the former on grounds of distributive justice, allocative efficiency, stability and growth. It argues that the malaise in the existing system of international finance is rooted in the institution of interest whose elimination should be the first step towards a new and healthy monetary order.
Muhammad Nejatullah Siddiqi
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