Islamic banking at the crossroads

Abstract

Is Islamic banking really at the crossroads? To answer this question it is necessary to review in some detail the present state of the Islamic banking movement. This review has to be carried out in the perspective of the goals and objectives of the Islamic banking movement. This paper, therefore, starts off with a discussion of the factors that have given rise to the Islamic banking movement. The aims and objectives of switch over from conventional banking to Islamic banking are then discussed. The available information about the growth and development of Islamic banking is then analysed both in its quantitative and qualitative aspects. The conclusions of the study are stated in the final section of the paper. I: The Rise of Islamic Banking. The seventies and the eighties of the present century have witnessed the emergence of a number of Islamic banking and financial institutions whose modes of operation are distinctively different from those of conventional banks. The establishment of these institutions is one of the several manifestations of the "back to religion" movement which is fast gaining strength in present day Muslim societies. the world over believe that Islam provides a complete set of guidelines for organising human activity in all spheres of life.