Islamic Banking: Why so slow?

Terry Lacey , JAKARTA Wed, 03/04/2009 3:57 PM The Fifth World Islamic Economic Forum (WIEF) opened on Monday in Jakarta. The global Islamic financing industry has over US$1 trillion in assets. But Indonesian Islamic finance accounts for less than 3 percent of banking assets and lacks the know-how, staff and infrastructure to expand faster.Indonesia is maintaining economic growth at over 4.5 percent and bank lending growth rates at over 15 percent.If Indonesian conventional banking is doing quite well amidst a global banking crisis, why is Islamic banking in Indonesia moving so slowly?The signing at the Forum of Memorandums of Agreement (MoAs) pending final negotiations on four Indonesian projects worth $ 3 billion was encouraging.But an...

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What is Islamic Bank?

Islamic banks appeared on the world scene as active players over two decades ago. But "many of the principles upon which Islamic banking is based have been commonly accepted all over the world, for centuries rather than decades".The basic principle of Islamic banking is the prohibition of Riba- (Usury - or interest):"While a basic tenant of Islamic banking - the outlawing of riba, a term that encompasses not only the concept of usury, but also that of interest - has seldom been recognised as applicable beyond the Islamic world, many of its guiding principles have. The majority of these principles are based on simple morality and common sense, which form the bases of many religions, including Islam."The universal nature of these principles is...

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