Globalization, technology, and interest-free Islamic banking

Abstract

As Muslim nations mature since their independence from colonial regimes, they are attempting to restructure conventional systems into Islamic systems covering all parts of private and government sectors. One vital area spanning all aspects of these sectors is the economic and financial reshaping of the existing system based on interest-free Islamic principles. Islamic banking is at the heart of this reshaping process. Moreover, the emergence of new Muslim nations from the breakup of the Soviet Union, the information technology's global impact of collaborative effort, and the oil-rich Middle Eastern nations' desire to build their own infrastructure of products and services, are some of the other factors that are guiding Muslim countries to become proactive in the restructuring of the economical and financial systems. This paper will address how the Islamic banking system functions, how it would interact with traditional Western banking practices, and how multi-national corporations must adapt their financing practices to compete globally for major projects.