Reforming Islamic Finance

Pessimists would rather declare the Islamic finance industry as clinically dead. Such dim expectation would become a reality when the industry will completely switch to selling present for future money through contrived sale contracts. The writings are plenty on the wall. We need to listen and respond seriously. Calling for the reform of the industry could be the last attempt to save it. Rusni Hassan’s paper (2020) provides a good perspective of the current problem, albeit a little dispassionate. This comment provides a brief explanation of the theoretical rationale and the macroeconomic benefits of Islamic finance. It diagnoses the problem of Islamic finance as that of convergence. In addition, a few modest proposals are presented to mitigate the problem