Published Paper Details:

This study examines the sustainability of an interest-free banking system, with a specific focus on Islamic banking in the Middle-East Countries. Islamic banking is an unknown concept in most part of the world and is only associated with a dislike to interest, but Islamic banking contains much more than just prohibition of interest. Islamic banking governed by the Sharia Law does not only focus on an interest-free banking system but it also focuses on aspects like risk-sharing, profit-making, asset-backed financing etc., Islamic banking stress on the concept that society can be served with ethics and finance. The main motive behind this banking system is to eradicate injustice in the society. Islamic banking is different from conventional banking, because of its close ties with religion. Islamic banking was an unknown concept in non-Islamic countries but in recent times it has gain a very huge popularity in many parts and countries of the world. Islamic banking has been always practiced in the Islamic world, but because of political influences, the implementation of Islamic banking system varies in different Islamic country. As the implementation of Islamic banking varies to some extent between Islamic countries, it is very crucial for the banks activities to be controlled by a Religious Supervisory Board to harmonised the implementation and govern it according to the sharia law. This study focuses on how does this system of an interest-free, asset-backed financing system sustains itself, and how does these principles help in the growth and sustainability of Islamic banks in the Arab and Muslim world. It concludes with its effort to harmonize rules and regulations for achieving more growth in the Islamic world and beyond.