Comparative Study of the Islamic Prohibition of Usury

Abstract

Usury (i.e. lending at interest rates) has been practiced in parts of the world for thousands of years. However, there is substantial evidence of criticism by various traditions, institutions and social reformers on religious, moral, ethical and legal grounds. Among its most visible and vocal critics has been the religious institution of Islam. This study investigates how Muslims generally deal with money and banking in different Islamic economies without usury, how Muslims living in non-Islamic countries influence and become influenced by mainstream economic practices, and finally how banking principles laid out by Islamic socities might be able to help their banks survive the current financial crisis better than the Western system.