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 book by Qanit Khalilullah and Sohaib Umar offers a critique of the modern fractional-reserve banking system, arguing that it is the primary engine behind chronic economic instability, inflation, and wealth inequality. The authors propose a radical macroeconomic transition to a full-reserve banking model. This proposal is specifically tailored as a structural panacea for Pakistan’s crippling debt crisis, while simultaneously being framed as a genuine path to establishing a Shari’ah-compliant Islamic financial system.
October 2025 issue (Vol 5, Issue 10) of Moral Reflections on Economics features
• “Debt Dominance Vs Risk-Sharing Ideals: How Sukuk Reshape the Debate” by Prof. Dr. Turalay Kenc, INCEIF University.
• “Integration of Tawhidic Epistemology in ESG” by Prof. Dr. Suhaimi Bin Mhd. Sarif, IIUM, Malaysia.
• “Zakah Driven Islamic Economy and Interest Driven Capitalism” by Hifz ur Rab.
• Book review of “Kitab al-Isharah ila Mahasin at-Tijarah” byAbū al-Faḍl Jaʻfar ibn ʻAlī al-Dimashqī ; translated by Dr. Adi Setia.
• Research paper in focus on “Do Islamic Cryptocurrency and Bitcoin Co-move at Different Investment Horizons?” by Mosharrof Hosen, Hassanudin Mohd Thas Thaker, Mohammad Nazim Uddin, Abdul Qoyum & Farhad Taghizadeh-Hesary.
• Regular sections of reflections, market news, economic and financial indicators and call for papers.
This paper mathematically analyzes the two-tier Mudarabah model in an exclusive Islamic financial environment and under dual banking system.
This paper aims to see which modes of financing are majorly employed by Islamic banks while providing finance to the clients. The empirical analysis shows that by and large Islamic banks use risk-shifting contracts. The use of risk-sharing based contracts is quite minimal.
Islamic Economics Project 