The Kerala High Court’s stay on the proceedings of the newly-formed company based on Islamic banking principles by Kerala State Industrial Development Corporation (KSIDC), on a writ petition by one Dr Subramaniam Swamy, is a blessing in disguise. It will definitely give an opportunity to the vast majority of our countrymen, Muslims included, to learn about the progress of Islamic finance and banking after the current financial tsunami in the West, and as a possible alternative to the ...

Avoidance of interest in banking transactions i.e. mobilisation of deposits and lending may be termed as interest-free banking. Islamic financial system on the other hand is a broader concept that includes not only Islamic banking but also Zakat and Wakf as sources for mitigating financial needs of the society. Moreover, Islamic financial system not only prohibits interest but also freedom from gambling and speculation/ hoarding in financial transactions. Since Interest is the main componen...