1989/01/01 by International Monetary Fund
Business, Management and Accounting · Economics, Econometrics and Finance · #Islamic Finance and Banking Studies #Microfinance and Financial Inclusion
paper · doi:10.5089/9781451925326.001
openalex publication_date 1989/01/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/29
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.