Islamic Banking: Experiences in the Islamic Republic of Iran and Pakistan
30 Pages Posted: 15 Feb 2006
Date Written: January 30, 1989
In an Islamic system, as interest is prohibited, banks are expected to operate solely on the basis of profit and risk sharing. This paper describes the developments in Islamic banking in Iran and Pakistan. As these two countries have initiated the most far-reaching experiments with Islamic banking, their experiences have a significant bearing on the feasibility of such a system. The developments in these countries are evaluated against the theory underlying the Islamic banking, and suggestions are made to achieve a more efficient system.
JEL Classification: 3116, 3120, 314
Suggested Citation: Suggested Citation