About (Contribution of Islamic Banks to the Islamic Economy)
Islamic banks are not a change in the form or title, or merely adding an Islamic word to the name of the bank, or a change in some names above the content of the usury -based thought as some researchers think.
Islamic banks are contract institutions established to strengthen the Islamic economy in practice, and are therefore socially positive investment banks.
The ideology on which Islamic banks are based:
1) Abolishing dealing with usury. Islamic banks have abolished from their system dealing with usury, taking and giving, as well as canceling all works that are based on usury, and they have replaced that with methods of speculation, participation and sale at a profit(Murabaha).
2) Legitimacy, where Islamic banks base their transactions on the basis of Islamic law (Sharia) and their purposes, as they deal only in legitimate transactions.
3) financial and moral profit, as the aim of Islamic banks is not only to obtain financial profit, Rather, the desire to benefit Muslims, develop society, achieve sufficiency, and encourage investments and collective profitability is a major goal of Islamic banks.
4) Achieving development: Islamic banks seek to achieve development in their various dimensions, social, economic, moral, spiritual and good allocation of resources.
The salient features of the economy and the Islamic economic system: The elements necessary for the establishment of any Islamic economic system:
1) The economy and the Islamic economic system is an economy or an ideological economic system. Therefore, the Islamic economy or system cannot be based on directing, investment, consumption or production that is not consistent with the belief that governs it.
2) the economy and the Islamic economic system are an economy or a moral value economic system Islamic theory in economics is inseparable from the moral aspect, both in terms of means and in terms of purposes.
3) The economy and the Islamic economic system are a realistic economy, where the Islamic economy Its components are the requirements of the reality that a Muslim should be in his life and what is consistent with the nature of man and what achieves his basic needs.
4) The Economy and the Islamic Economic System is an economy or a humanitarian economic system His solutions to the problems of economic life are linked to high values and ideals such as justice, freedom, equality, consultation and cooperation.
The Islamic economy is therefore an economy that takes into account all factors affecting economic, social, political or moral.
Speculation in Islamic banks and their purposes and effects:
1) In speculation, capital cooperation and work experience in order to create integrated development.
2) In speculation is a kind of participation that decides to act as a source of earnings rather than considering money as a single source of earnings.
3) In speculation freeing the Muslim individual from the negative tendency of depositing his money in usury-based banks in anticipation of interest.
4) In speculations, the function of capital on society is corrected , so that society achieves its goals and meets fhe need of human being.
5) In speculation the appearance of the advancement of the economies of poor Muslim societies.
6) In speculation is a manifestation of cooperation that leads to a doubling of productive power.
In order to achieve these objectives:
a) Balance between factors of production: so that the cooperation of capital and work achieves its social and investment benefits by moving money and flowing between projects and urging people to work.
b) Taking care of work and not losing sight of its role in the production process.
c) Contributing to the social and economic development of Muslim countries.
d) The customer base to include self-employed professionals, artisans and small traders.
e) Cost rationalization, so that production costs are adjusted and rationalized.
f) Maintaining the zakat obligation and spending it in its legitimately prescribed banks.
g) The establishment of large investment companies based on the principle of speculation and participation.
h) Open up broad horizons for Islamic thought and economic system in the world.
Good will loan and Islamic banks:
It is known that commercial and Islamic investment banks are for-profit.
A good will loan means tolerance, ease and waiting, so the usury -based loan never meets with a good will loan.
It is not valid to compare them, nor to assume the possibility that one may be a substitute for the other, as they are two different situations, one involving one (usurious loan).
On a predetermined interest rate at a greedy fixed rate, the other (a good will loan) means a financial borrowing with a broad grace period of repayment without costs, interest or increases on the capital originally borrowed.
Thus, there is a wide range of good will loan in large institutions such as the Islamic Development Bank and other Islamic bank.
According to a document issued by the International Monetary Fund ( IMF), the Islamic banking system is the most effective, and most balanced of the financial systems in Western countries, especially in dealing with financial fluctuations..
Mr. Abdul Latif Al-Janahi, General Manager of Bahrain Islamic Bank, says:“Islamic banks have gained acceptance in Arab and Islamic countries, and in the West, there are major western financial institutions that have applied the Islamic banking system in some of their portfolios".
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