Banking in Islam

Islam is a religion focusing on benevolence and well-being of mankind. In the very beginning of the Holy Quran, Allah, the Almighty, teaches man to ask Him for the straight path a path which is free of extremes, because going to the extreme is always injurious and harmful. Similarly, scarcity of anything creates problems in life. Keeping this in view, Islam talks of a middle path. Islamic banking refers to a banking activity consistent with the rules and regulations of Islamic law and its practical application through the development of Islamic economics, according to which sale of such goods as are prohibited by Islamic doctrine is not allowed. Islamic banking also prohibits such investments as are contrary to the tenets of Islam. Islamic banking also put restrictions on risky bidding of any kind. Basically bidding includes such operations which, by chance or for exploitative purposes, involve money. There is a similar restriction on trading in risk, technically called bayu al-gharar. However, there is some difference of opinion as to what exactly gharar is. This work attempts to explain Islamic banking in a comprehensive and precise manner that would add to the existing literature on the subject. Hopefully, it would win the appreciation of readers.