Islamic Law and Finance

This work describes the field of Islamic banking and finance as practised in the modern era. This unique form of commerce has grown dramatically over the past twenty years, and is coincident with expanding wealth in the Middle East and parts of Asia, and with a turning away from secular Western practices in those areas. It examines the cultural background of this development and its legal and religious underpinnings. These prohibit Muslims from transactions that involve interest (riba) and speculation (gharar), among others, rendering many Western forms of finance and investing unacceptable. The authors describe the financial arrangements that allow investors and capital users to transact business in Islamically-sanctioned ways. A number of major Western and Middle Eastern financial institutions have recognized Islamic banking as an important new field. These firms have established Islamic practices to serve this growing market, including mutual funds that - like `socially responsible' funds in the West - invest client monies in Islamically-approved ways.