Islamic banking in theory and practice: the experience of Bangladesh

Abstract

Defines an Islamic bank, notes their rapid growth in the last twenty years and explains the financial instruments they use to conform with the prohibition on interest. Considers how they might enhance both urban and rural development in Islamic countries, and the feasibility of an Islamic futures market. Describes the operations of the Islami Bank Bangladesh Limited (the first in SE Asia) and assesses its domestic and international performance, providing many statistical appendices. Recognizes some outstanding problems (e.g. suitable training, legal framework etc.) but believes the bank has great potential for assisting development and shows that “banking without interest is feasible”,