(a) It provides financial intermediation services, channeling funds from ultimate savers to ultimate borrowers, facilitating movement of resources between agents.
Why popular According to scholars, main reasons behind the transformation of Islamic economics into a distinguished and popular discipline, are increasing materialism, changing attitudes towards poverty and other effects of the development of capitalism, which is aptly summarized as the transition from the biblical ‘love of money is the root of all evil’ to Bernard Shaw’s ‘lack of money is the root of all evil’.
How It Functions Any financial system performs four key roles.
In 2007, there were about 270 Islamic banks worldwide with a market capitalization in excess of US$13 billion.
The assets of Islamic banks worldwide estimated then at more than US$265 billion and financial investments above US$400 billion.
This concept of banking saves Islamic form of banking from critical conditions like economic slowdown.
Evolution The Islamic economic system has a centuries-old history.
On the other hand, traditional banking, adopts interest in banking that is the main difference between these two forms of banking (Vogel & Hayes, 1998).
In this context this research aims at verifying the role of Islamic banking in relation to current crisis in non Islamic banking.
Nature Islamic Economics (Al-iqthisad-ul- Islami) is a system or idea controlled by Shari’a laws in behavior, institution and policies related to economic life.
The basic concept of Islamic economy is prohibition of riba (usury), gambling and hoardings that is just opposite to the non Islamic banking.