Islamic banking in mainstream

The words like religion, morality must be funny words in science, economics included. Instead of people going by perceived notions, it would be better if taken an objective look into such matters. here is one example of religion gaining success in science of economics.

Islamic finance/banking/economics is into mainstream and also providing safe haven for economies affected by present credit crisis.

Islamic finance is best defined as "Central to Islamic finance is the fact that money itself has no intrinsic value. As a matter of faith, a Muslim cannot lend money to, or receive money from someone and expect to benefit - interest is not allowed. To make money from money is forbidden - wealth can only be generated through legitimate trade and investment in assets. Money must be used in a productive way."

Islamic assets are already a trillion dollar block, with annual growth of 10-15%, reports Investor chronicle.

The fact that Islamic laws prohibit paying and receiving interest doesn't mean that that they frown on making money or encourage reverting to an all-cash or barter economy. At its core, Islamic finance is about linking the return to productivity and the quality of the project, thereby ensuring a more equitable distribution of wealth, based around a contract that manages risk.

High standards of discipline and regulation are by nature embodied in Islam's economic principles.

Dan Taylor, Head of Banking at BDO Stoy Hayward, says: “As the risk profile of Islamic Banks is generally lower than conventional western banks, this presents a more solid option for both retail and institutional investors and suggests that dealings with Islamic financial institutions will grow dramatically as people switch to more secure products in this environment.”

But, its still a long way for Islamic finance to replace mainstream.