Strive for product development for Islamic economic system.

Byline: MUHAMMAD ZEESHAN FARRUKH

The operations of the Islamic banking industry is increasing at a rapid pace and has gained a considerable share of the financial market all over the world. Now, as Islamic banking has captured a significant share in the local and global financial markets, there is a need to think ahead and do more towards achieving the real objectives of Islamic banking i.e. to strive for product development while keeping in view to achieve the goal of implementation of Islamic economic system.

As the banking industry is the cornerstone of the present economic structure, there was a need to present the Islamic alternative to conventional interest-based banking practices and pave the way for the Islamic economic system. Hence, the concept of Islamic banking has emerged with the objective to eradicate the interest-based socio-economic system with the replacement of a socio-economic system based upon the principles of Islam.

Now, the question arises that if the Islamic banking system has gained momentum, it means that the industry is achieving its objectives then what objectives about which the Islamic banking industry must consider. The answer is that even though there is no doubt that the Islamic banking system has gained popularity and its products and services are becoming viable and successful throughout the world but it is also the fact that the end results of these practices are the same as conventional economic and banking system and these practices are not fulfilling the real objectives of the Islamic banking industry.

There is no doubt that the prevalent Islamic financial products and services are Shariah compliant but unfortunately, these are unable to change the socio-economic conventional capitalist behavior of the society and unable to produce the positive change in the economy as Islam desires. Now, the Islamic financial industry requires Shariah-driven products based upon partnership rather than prevalent Shariah-compliant products.

The prevalent Islamic financial products and services, i.e. Murabaha, Ijarah etc. have been designed keeping in view to get the financial results the conventional products and services produce. This behavior was justified at the time of beginning and infancy stages of the Islamic banking industry where the immediate alternatives of conventional banking were necessary to cater to the banking and financial needs of society by offering Islamic modes which might protect people from the...