Tag Archives: Muhammad Akram Khan

Prohibition of riba: Modernist vs. Orthodox and the ‘need’ for Islamic Financial Institutions – by Muhammad Akram Khan

August 29, 2013

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Islamic Design

photo credit: Masrur Ashraf via Flickr cc

The rationale for developing Islamic Financial Institutions (IFIs) parallel to Conventional Financial Institutions (CFIs) emanates from the Muslim orthodox interpretation that equates the Qur’anic prohibition of riba with all types of interest. Since the major business of CFIs involves dealing in interest, the orthodox interpretation concluded that the business of CFIs was prohibited in Islam. That led to the need for an alternative basis for banking business within the Islamic framework.

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