This research paper provides a theoretical reframing of the objectives underlying Islamic economics and finance. While Islamic finance is largely known for avoiding specific prohibitions—such as Riba (interest), Gharar (excessive ambiguity), and Maysir (gambling)—critics argue that it has become operationally identical to conventional finance. The author argues against this phenomenon of ‘Shariah arbitrage’, where the outward form is Islamic but the substance remains conventional.
The awareness sessions conducted by banks focus on the prohibition of Riba, justified by Qur’anic verses and Ahadith, and explain how Islamic banks avoid it in their operations. This fosters a sense of religious superiority among those who begin to assume that the inherent beauty of the faith renders Islamic banking nearly flawless. Consequently, there is a growing belief that the employees of Islamic banks are more truthful, empathetic, and attentive to inquiries than those of mainstream banks. However, upon becoming customers of Islamic banks, they often observe that interactions with Islamic banking personnel at the front end are nearly identical to those with employees of conventional banks.
Islamic Economics Project 