Inequality, Concentration of Wealth and the Ownership Structure of Islamic Banks: Some Pertinent Issues

22 Pages Posted: 3 May 2018 Last revised: 12 Aug 2020

See all articles by Mohammad Omar Farooq

Mohammad Omar Farooq

Independent

Fouad Meer

University of Bahrain, College of Business Administration, Students

Basit Iqbal

University of Bahrain, College of Business Administration, Students

Date Written: April 1, 2018

Abstract

An important Islamic imperative is prevention of concentration of wealth among a few so that wealth circulates widely to enhance shared prosperity. In contemporary economic discourse inequality and concentration of wealth have emerged as among key causes of instability and crisis. Unfortunately, while Islamic finance has emerged as a Shari’ah-compliant industry, it does not seem to be connected with the Islamic concern about inequality and concentration of wealth.

Are Islamic banks, as the dominant component of the industry, helping to improve inequality and concentration of wealth and thus offer a better framework to deal with instability and crisis? Is the ownership structure of Islamic banks conducive to meeting the Islamic imperative regarding inequality and concentration of wealth?

The research in this paper illuminates the pertinent issues in light of the experience of Bahrain as one of the hubs of Islamic banking and finance.

Keywords: Islamic banking and finance; Concentration of wealth; Economic inequality; Ownership structure; Shared prosperity

JEL Classification: I39

Suggested Citation

Farooq, Mohammad Omar and Meer, Fouad and Iqbal, Basit, Inequality, Concentration of Wealth and the Ownership Structure of Islamic Banks: Some Pertinent Issues (April 1, 2018). Available at SSRN: https://ssrn.com/abstract=3160640 or http://dx.doi.org/10.2139/ssrn.3160640

Fouad Meer

University of Bahrain, College of Business Administration, Students ( email )

Sakhir
Bahrain

Basit Iqbal

University of Bahrain, College of Business Administration, Students ( email )

Sakhir
Bahrain

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