This is a blog made for an assignature name Organisations and Culture from EAFIT University in Medellín Colombia

miércoles, 21 de abril de 2010


In the last years, Islamic Banks have grown in size and number around the world. The interesting topic here is that these kind of institutions doesn´t allow charging interest because as the quoran says: “Allah forbids Riba and permits trade”. Riba is a kind of return over financial procedures. So, most of the Islamic banking are not based on profit sharing but in debt like instruments.

There are Islamic banks in over 60 countries. And in states like Iran, Pakistan and Sudan the whole system has been converted to Islam banking. The success of Islamic banking is shown in its growth rates of more than 15%. That is one of the reasons why conventional banks have started offering Islamic financial contracts.

An example of these kind of debt-like contracts are the SUKUKS. They are Islamic debt instruments such as the conventional bonds. They are also known as “trust certificates” or “participation securities”. Like the capitalist bonds, sukuks are issued in exchange for loans to the issuer and technically it obligates the issuer to pay to the holder a sum of money but it must not contain interest, otherwise it must be punished.

Some researchers expects that Islamic banks will promote growth in Islamic countries by providing long-term financing to growth-oriented sectors of the economy.

To conclude, we have seen even that the Islam is very severe with its religious beliefs and costumes, but they have adapted and invented, like in the financial system, products or services that are in synergy with their religion and have had a lot of success.



Rajesh K. Aggarwal and Tarik Yousef, (Feb., 2000), Islamic Banks and Investment Financing, Journal of Money, Credit and Banking, Vol. 32, No. 1 pp. 93-120, Ohio State University Press Stable URL: Accessed: 20/04/2010 18:08

1 comentario:

  1. The Islamic Banking could be treated as an evidence that shows how culture and its set of traditions and beliefs can be applied to the business area with a high rate of success. Prohibiting the recovery of interest in a tool such as the loan as a policy inspired in the religious statements dictated by their code of law (Quoran) represents a great measure that encompasses the economic and political ambits with the religious and social ones. While expressing my admiration to the growth of the Islamic banking system and its achievement/ recognition in the economic development I also suggest not to forget their moral principles but to be more flexible in areas that can be affected by those strict rules (The obstacles imposed to E-commerce could be an example of it).