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Central Banking in an Interest-Free Banking System المصارف المركزية في نظام مصرفي خال من الربا

Author

Listed:
  • HAMID ZANGENEH

    (Associate Professor of Economics Widener University, Chester, Pennsylvania)

  • AHMAD SALAM

    (Professor of Finance, Widener University, Chester, Pennsylvania 19013)

Abstract

There is a vast literature on regulatory, monetary and institutional aspects of traditional banking system. This is not true for the interest-free Islamic banking framework. In this paper, the functions and tools of central banking in an Islamic framework are evaluated, and suggestions for adapting and revising the currently used tools of central banking for the Islamic central banking are made. It is shown that the current monetary policy tools of interest-based economies could be modified and used in an interest-free Islamic banking system. This paper shows that the needed technical and administrative modifications are to a large extent, minor. The existence of high speed computer technology and new accounting practices, it is argued, have increased the feasibility of a true interest-free Islamic banking. هناك أدبيات كثيرة جدا حول الجوانب التنظيمية والنقدية والمؤسسية للنظام المصرفي التقليدي ، الأمر الذي لا ينطبق على المصارف الإسلامية الخالية من الربا. ويحاول بحثنا هذا تقييم وظائف وأدوات المصارف المركزية في إطار إسلامي مع تقديم بعض الاقتراحات لتبني وتعديل هذه الأدوات لاستخدامها في المصارف المركزية الإسلامية . ويلاحظ أن أدوات السياسة النقدية المعاصرة للاقتصاد الربوي يمكن استخدامها في المصارف المركزية الإسلامية . وقد أثبتنا أن التعديلات الفنية والإدارية المطلوبة سوف تكون طفيفة إلى حد كبير . كما أكدنا على أن ظهور تقنية ( تكنولوجيا) الحاسبات السريعة والأعراف الجديدة في علم المحاسبة كل ذلك يسهل إمكانية قيام نظام مصرفي خال من الفائدة.

Suggested Citation

  • Hamid Zangeneh & Ahmad Salam, 1993. "Central Banking in an Interest-Free Banking System المصارف المركزية في نظام مصرفي خال من الربا," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 5(1), pages 25-36, January.
    • Handle: RePEc:abd:kauiea:v:5:y:1993:i:1:no:2:p:25-36
    DOI: 10.4197/islec.5-1.2
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    References listed on IDEAS

    as
    1. B. A. Bashir, 1984. "Successful Development of Islamic Banks تنمية ناجحة للمصارف الإسلامية," Journal of Research in Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 1(2), pages 59-66, July.
    2. Carter H. Golembe & John J. Mingo, 1985. "Can supervision and regulation ensure financial stability?," Proceedings, Federal Reserve Bank of San Francisco, issue June, pages 125-164.
    3. Muhammad Anas ZARQA, 1983. "Stability In An Interest-Free Islamic Economy: A Note," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 2(2), pages 181-188.
    4. Ingo Karsten, 1982. "Islam and Financial Intermediation (L'Islam et l'intermédiation financière) (Islamiso e intermediación financiera)," IMF Staff Papers, Palgrave Macmillan, vol. 29(1), pages 108-142, March.
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    Cited by:

    1. Uddin, Md Akther & Ali, Md Hakim & Radwan, Maha, 2019. "Can GDP Growth Linked Instrument Be Used For Islamic Monetary Policy?," MPRA Paper 102888, University Library of Munich, Germany.
    2. Uddin, Md Akther & Halim, Asyraf, 2015. "Islamic monetary policy: Is there an alternative of interest rate?," MPRA Paper 67697, University Library of Munich, Germany, revised 07 Jun 2015.
    3. Jean Yves MOISSERON & Bruno Laurent MOSCHETTO & Frédéric TEULON, 2014. "Islamic finance: a review of the literature," Working Papers 2014-93, Department of Research, Ipag Business School.
    4. Saba Mushtaq & Danish Ahmed Siddiqui, 2016. "Effect of interest rate on economic performance: evidence from Islamic and non-Islamic economies," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-14, December.
    5. E. H. Ergeç & B. G. Arslan, 2013. "Impact of interest rates on Islamic and conventional banks: the case of Turkey," Applied Economics, Taylor & Francis Journals, vol. 45(17), pages 2381-2388, June.
    6. repec:ipg:wpaper:2014-093 is not listed on IDEAS
    7. Uddin, Md Akther, 2014. "Can GDP growth rate be used as a benchmark instrument for Islamic monetary policy?," MPRA Paper 67696, University Library of Munich, Germany.
    8. Shaikh, Salman, 2010. "Monetary Policy & Monetary Regime in an Interest Free Economy: An Alternate Approach In Monetary Economics amidst Great Recession," MPRA Paper 20029, University Library of Munich, Germany.
    9. Hanif, M. Nadim & Sheikh, Salman, 2009. "Central banking and monetary management in islamic financial environment," MPRA Paper 22907, University Library of Munich, Germany, revised 25 May 2010.
    10. Zangeneh, Hamid, 2010. "Iran: Past, Present and the Future," MPRA Paper 26283, University Library of Munich, Germany.
    11. Sarker, Md. Abdul Awwal, 2015. "Islamic Monetary Policy Instruments (IMPIs)," Working Papers 1436-4, The Islamic Research and Teaching Institute (IRTI).

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