Mohamed Ariff, Mervyn K. Lewis and Shamsher Mohamad
Edited by Mervyn K. Lewis, Mohamed Ariff and Shamsher Mohamad
From a single product offering in 1963, the Islamic financial services industry has grown to an estimated $1.6 trillion in assets. Products must comply with profit and risk-sharing criteria and regulations preventing banks from venturing into activities with high risk and excessive uncertainty. This timely volume analyses these matters and considers the range of new products, discussing both conceptual and practical dimensions. It connects Islamic finance to the mainstream theoretical literature on financial intermediation while also exploring its differences. The expert contributors also examine why an ethical foundation is important and why the system requires well-thought-out regulations to ensure outcomes that protect the community’s well-being.
Mohamed Ariff and Mervyn K. Lewis
Ahmad Kaleem and Mervyn K. Lewis
Zafar Iqbal and Mervyn K. Lewis
The principal objective of this chapter is to research the Islamic position on corruption and compare it with Western social scientific thought on the topic. It is shown that the original sources of Islam, the Holy Qur’an and sunna, employ a variety of terminology and narration to elucidate and condemn a broad category of behavioural digressions involving corruption including bribery, nepotism and rule substitution. Corruption is seen to stem from the abuse of administrative power of any kind, judicial power, political authority and financial dominance. Further, all corrupt acts are construed as lacking in virtue from a moral perspective and unjust in relation to the principles that safeguard rendering to everyone their due, thereby undermining communal harmony. This position matches well with the shift in social scientific thought from viewing corruption as ‘grease that oils the economic wheels’ to a ‘menace that undermines economic growth’. Where the two differ is with respect to remedial action. The Western approach focuses on designing systems and institutions that seek to root out corruption while minimizing opportunities and enticement for corruption. In short, it emphasizes constraints external to the individual. By comparison, Islam seeks to go beyond such constraints, and also instil in believers a clear ‘second-order’ preference for non-corrupt behaviour. It recommends developing a firm belief in transcendent accountability and stresses character building through practising moral virtues and shunning vices. In essence, in circumstances where the chances of detection are low, the restraint comes from within. It is our contention that both emphases are important in eliminating corruption.