Malaysian Experience In Implementation Of The Banking And Financial Transactions Without Riba

Islamic banking certainly faces many challengers today which are due to the fact that we live in an economy that is driven and manipulated by interest. The following is an illustration of the different challenges facing by Islamic banking. In a market economy, the banking sector is supported and regulated by the central bank. One could see this kind of support in terms of discount rates on loans given by the central bank to commercial banks in times of need. Also, the central bank regulates commercial banks, which will add to the health of those commercial banks. Unfortunately, Islamic banks in the region do not enjoy such privileges. Because of the fact that most countries have a central bank which operates in a market economy. The previous were the most important or serious challenges for an Islamic banking system. I think that these challenges and many others are a result of trying to build an Islamic banking system in economies and banks that operate and literally exist around interest. In my opinion, building Islamic banks in a market economy is an obvious failure. Islamic banks can survive only in an Islamic economy that abolishes riba or interest