Islamic Banking refers to a system of banking or banking activity that is consistent with Islamic law (Sharia) principles. First modern theoretical literature on Islamic Banking appeared in from the 1940’s through the 60’s. Modest practical steps in the 1960’s were followed by the establishment of several Islamic Banking in the private sector in the 1970’s. During the 1980’s, Pakistan, Iran, Sudan, and Malaysia adopted the new system officially. The first experiment in interest-free banking was undertaken by Prof. Dr. Ahmad El-Naggar during the early sixties in the Nile Delta. This maiden attempt covered a large number of villages.4 After achieving success in the Nile Delta, Dr. El-Naggar moved to Saudi Arabia and started a campaign for the establishment of Islamic banks throughout the Muslim World. In this struggle he was fortunate to get the support of Prince Muhammad and his illustrious father King Faisal. With hard work and persistent endeavors Dr. El-Naggar was able to steer through many difficulties and saw his efforts crowned with success when the Islamic Development Bank was established in Jeddah in 1975. Over the past few years, he has been instrumental in the establishment of no less than a dozen Islamic banks spread over the wider canvas of the Muslim world. Countries at present having one or more Islamic banks are Egypt, Sudan, Jordan, Kuwait, Dubai, Bahrain and Sharjah. Malaysia and Mauritania have also recently set up one Islamic Bank each. The reports so far received from the Islamic banks reveal that the performance of these banks has been quite satisfactory and it is hoped that they will be able to offer a much better service and reward to their clients than the competing Western banks. Egypt is the leader on the Islamic banking front. A few years ago Dr. El-Naggar set up the International Institute of Islamic Banking and Economics, Lefkosa (Turkish Cyprus)/Cairo to cater for the intellectual and operational needs of the Islamic banks. This institute also offers training facilities to banks staff in Islamic banking. There also exists an International Association of Islamic Banks with headquarters in Cairo. This institution helps member Muslim countries towards the establishment of Islamic banks. Labels: Islamic Banking |
Post a Comment