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Reformed Banking System - Interest Free Banking

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Reformed Banking System - Interest Free Banking
The Reformed System:
Interest Free Banking
…………………………………..
Dr. Sirajuddin H Chougle,
Dr. Abdul Majid Ansari,
Associate Professors, Department of Commerce, Maharashtra College, Nagpada,
Mumbai. 400 008.India
Contact:sirajchougle@gmail.com
………………………………………………………………………………

Abstract
One major problem the world faces today is acute poverty or widening gap between rich and poor.

There have been continuous efforts to tackle this issue. The efforts are made to develop a balanced world. Banks play a vital role in dealing with this problem.

The conventional interest based banking has been partially successful in removing poverty by reducing the gap between the rich and the poor. In this method, there are cases which show that the society at large may seem to be developing but at the same time producing some harmful effects.

Interest free Islamic banking; on the other hand, work on the principles of equality and justice. For example in interest free Islamic banking, interest is considered to be most exploitative, particularly for the poor, therefore prohibited. Similarly the speculation, alcohol and other anti-social business like casino is not permitted to be financed by these banks.

This paper is an attempt to present the role of interest free Islamic banking in reducing the gap between the have and have-nots.

The Reformed System:
Interest Free Banking
…………………………………..
Dr. Sirajuddin H Chougle,
Dr. Abdul Majid Ansari,
Associate Professors, Department of Commerce, Maharashtra College, Nagpada,
Mumbai. 400 008.India
Contact:sirajchougle@gmail.com
……………………………………

“Freedom and power bring responsibility….. The service of India means the service of the millions who suffer. It means the ending of poverty and ignorance and disease and inequality of opportunity.”
Pandit Nehru, on 14th August 1947.
Introduction:
Two major problems the world faces today is acute poverty with the widening gap between rich and poor. This problem is


References: Books: 1. Some aspects of Islamic Economy, By Dr. Muhammed Nejatullah Siddiqui 2. Issues in Islamic Banking, By Dr. Muhammed Nejatullah Siddiqui 3. Islamic Economics, (Urdu), By Manazir Ahsan Geelani. Websites: 1. www.financeinislam 2. www.irti Newspaper: 1. Times of India, Page 16, 7th February, 2011 2. Times of India, Page 24, 26th February, 2011
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