Islamic Ethics in Finance

Abstract

Islamic banking and finance have been very attractive features for Muslim as well as non-Muslim customers. Where a Muslim customer would investigate Shariah compliance when choosing an Islamic financial institution for its services, a non-Muslim customer prefers ethical banking as a main feature of any financial institution. This awareness of ethical banking has been a decisive factor for many customers when choosing a financial institution. Before delving into Islamic ethics in finance, the authors explore factors of production in Islamic ethics and how they differ from conventional concepts. Secondly, most important in Islamic financial ethics is that the al-Qur'an strictly forbids charging interest or riba to businesses or individual customers. This chapter focuses on reviewing the development of Islamic banking vs. conventional banking.