Banking in Islam – II
If we make a deep probe, it coincides and appears as direct answer by God as having accepted prayers of Ibrahim (AS) that he begged of God while obeying command of God to leave his son and wife in Makkah. These trade routes then get linked up to other trade routes on the face of this earth connecting the then known world. These customs of trade followed a process called Bai allowed by God. This was based on cash or credit and later developed to be supported by Modarbah or Musharkah for expansion or to suit events and circumstances. In this journey, riba also entered the scene and gradually became most important factor. As Islam spread in Makkah and Madina, God sent his message through his messenger (PBUH) to leave this practice.
The finance system of Islam was trade and agriculture. With the coming into existence of the state of Madina the following components appeared on the economic scene to support and sustain expansion of the Islamic state under the Holy Prophet (PBUH).
Bai, Agriculture related professions and produce
Addition of Modarbah, Musharkah, Amanat
Further addition of sadqat, ghaneemat
Further addition of Zakat, voluntary contributions
Setting up of bait-ul-mal
Regulation of functions of this institution by divine order
Regulation of trade and commands to eliminate riba
Expansion of state of Madina to the whole of Arab
Total prohibition of riba
Responsibility of Ummah increased to the end of time and space
Completion of religion, its codes in all respects
Death of the Holy Prophet (PBUH).
The writer is an ex-Advisor Banking State Bank of Pakistan
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