Banking And Interest In Islam

Islam is not only a religion but a complete social system, a complete code, a civilization of which religion is a  part. The Qur'an and the sunnah - strictly forbid interest  for it's tyranny. As a matter of fact, there is no difference between interest and usury of Riba. Islam definitely prohibits all sorts of interest whatever high  sounding and persuasive names we may give it. in capitalistic economy interest is the center round which the banking system revolves. Islamic idea of interest free banking system is superior to modern banking. Islamic  banking is based on the universally recognized principles of shirakah (partnership). that is the whole system of banking in which the shareholders, the depositors, the investors and the borrowers participate on partnership basis. This work through the application of the eternal principle of Mudarabah, where labour and capital is combined together as partner for work.