Editing Islamic economics (section)

==Banking and finance==
{{Main|Islamic banking and finance}}
{{See also|History of Islamic economics}}
Islamic banking has been called "the most visible practical achievement" of Islamic economics,{{sfn|Kuran|2004|p=x}} and the "most visible mark" of Islamic revivalism.{{sfn|Farooq|2005|p=33}} By 2009, there were over 300 "shariah compliant [[bank]]s and 250 [[mutual fund]]s around the world,<ref name=economist-2009>{{cite news| url=http://www.economist.com/world/europe/displaystory.cfm?story_id=14859353 | newspaper=The Economist | title=Sharia calling | date=2009-11-12}}</ref> and around $2 trillion were sharia-compliant by 2014.<ref name="The Economist">{{cite news|title=Islamic finance: Big interest, no interest|url=https://www.economist.com/news/finance-and-economics/21617014-market-islamic-financial-products-growing-fast-big-interest-no-interest|access-date=15 September 2014|newspaper=The Economist|agency=The Economist Newspaper Limited|date=Sep 13, 2014}}</ref><ref name="BLME Company Profile">{{cite web|url=http://www.zawya.com/middle-east/company/profile/1007422/|title=Bank of London and the Middle East|access-date=12 July 2013|publisher=Zawya.com}}</ref>

However, the domination of the industry by debt-like instruments such as ''[[murabaha]]'' rather than risk-sharing products, has driven even some leading advocates and experts in Islamic banking (such as [[Muhammad Nejatullah Siddiqi]]) to talk about "a crisis of identity of the Islamic financial movement."<ref>referring to Siddiqi, 1983 (Mohammad Nejatullah SIDDIQI. Issues in Islamic Banking [Leicester: The Islamic Foundation, UK, 1983), in  Munawar IQBAL and Philip Molyneux. Thirty Years of Islamic Banking: History, Performance and Prospects [Palgrave, 2005], p. 125</ref>

===Interest===
The most noticeable and/or important objective of Islamic Banking has been a ban on the charging of interest on loans.{{sfn|Kuran|2004|p=x}} The Quran (3: 130) condemns ''riba'' (which is usually translated as "interest"): "O, you who believe! Devour not ''riba'', doubled and redoubled, and be careful of Allah; but fear Allah that you may be successful."

===Islamic public finance (''Bayt-al-Mal'')===
The only financial institution under Islamic Governance (Prophethood and Caliph Period) was Baitulmaal (public treasury) wherein the wealths were distributed instantly on the basis of need. During Prophethood the last receipt was tribute from Bahrain amounting eight hundred thousands dirham which was distributed in just one sitting. Though the first Caliph earmarked a house for Baitulmaal where all money was kept on receipt. As all money was distributed immediately the treasury generally remained locked up. At the time of his death there was only one dirham in the Baitulmaal. The second caliph besides developing the Central Baitulmaal also opened Baitulmaal at state and headquarters levels. He also carried census during his caliphate; and provisioned salaries to Government employees, stipend to poor and needy people along with social security to unemployed and retirement pensions.

The concept of a public financial institution played a historic role in the Islamic economy. The idea of state collected wealth being made available to the needy general public was relatively new. The resources in the Bayt-al-Mal were considered God's resources and a trust, money paid into the shared bank was common property of all the Muslims and the ruler was just the trustee.{{citation needed|date=January 2015}}

The shared bank was treated as a financial institution and therefore subjected to the same prohibitions regarding interest.<ref>K-al-Mabsut, Al-Sarakhsi, Shamsuddin</ref> Caliph Umar spoke on the shared bank saying: "I did not find the betterment of this wealth except in three ways: (i) it is received by right, (ii) it is given by right, and (iii) it is stopped from wrong. As regards my own position vis-a-vis this wealth of yours; it is like that of a guardian of an orphan. If I am well-off, I shall leave it, but if I am hard-pressed I shall take from it as is genuinely permissible."<ref>Uyun-al-Akhbar, ad-Dinawri</ref><!--How many banks were there in Islam under Caliph Umar????-->{{Verify source|date=January 2015}}

===Proposals===
====Savings and investment====
An alternative Islamic savings-investment model can be built around [[venture capital]]; [[investment banks]]; restructured corporations; and restructured [[stock market]].<ref>{{cite web |title=Economic Model |author=Meinhaj Hussain |version=2.0 |date=June 2010 |url=http://www.grandestrategy.com/2010/01/21st-century-islamic-state-economic.html |access-date=2010-08-24 |archive-url=https://archive.today/20130124185733/http://www.grandestrategy.com/2010/01/21st-century-islamic-state-economic.html |archive-date=2013-01-24 |url-status=dead }}</ref> This model looks at removing the interest-based banking and in replacing market inefficiencies such as subsidization of loans over profit-sharing investments due to double taxation and restrictions on investment in private equity.<ref>{{Cite web|url=https://www.noorbank.com/english/personal/investments|title=Savings & Investments {{!}} Noorbank|website=www.noorbank.com|language=en|access-date=2018-01-31|archive-url=https://web.archive.org/web/20180131202137/https://www.noorbank.com/english/personal/investments|archive-date=2018-01-31|url-status=dead}}</ref>

====Hybrids====
Islamic banks have grown recently in the Muslim world, but are a very small share of the global economy compared to the Western debt banking paradigm. Hybrid approaches, which applies classical Islamic values but uses conventional lending practices, are much lauded by some proponents of modern [[human development theory]].<ref>{{cite web |last1=Abdi Ali |first1=Muhamed |title=MODERN ISLAMIC FINANCE PRACTICES AND ITS EFFECT ON SOCIAL DEVELOPMENT IN SOMALIA |url=https://www.researchgate.net/publication/338208852 |website=Research Gate |access-date=April 13, 2024 |date=December 2019}}</ref>