Currently, there are 27 banking institutions consisting of 16 Islamic banks and 18 conventional banking institutions offering Islamic banking products and services under the Islamic Banking Scheme (IBS) in Malaysia. Hence it can be a valid question to ask that why Muslims in Malaysia are still patronizing the conventional banks when there are enough alternatives now. This study has been conducted to unearth the reasons for whyMuslims in Malaysia haveaccounts in conventional banks and to examine the level of knowledge and understandingabout riba among Malaysian Muslims. It is important to check the level of knowledge about riba because initially interest intruded in Muslim countries through disagreement among scholarsin the past, scholars have differed over the technical definition of riba. A total of 563 respondents were surveyed and their responses were analyzed using SPSS. The most important fact revealed by this study is that Muslims in Malaysia possess a good understanding of the concept of riba. The lack of knowledge about riba is not a reason fordealing with conventional banks. The result also shows that being familiar with the bank is the dominant reason for choosing one bank over another, among customers of conventional banks. When the relationship between demographic profile and various misconceptionsabout ribawas tested, academic qualification appears to be a significant factor. The findings of this study can help in designing effective promotional strategy for Islamicbanks.
Purpose – The purpose of this paper is to examine the relationship between war and interest-based transaction by analyzing the case of the late Ottoman Empire from a historical economic perspective. It also attempts to provide a deeper understanding of the Quranic verses where Allah has declared war against people who deal with interest. Design/methodology/approach – It provides a snapshot of major economic events that occurred in the last phase of the Ottoman rule that contributed in shaping the fate of the empire and, then, systematically explores them. Findings – A careful study of the chain of events reveals that there exists a strong relationship between war and interest-based transactions, as indicated in the parable given in the Quran where dealing with interest has been described as equivalent to waging war against Allah and His Messenger. The paper claims that Muslims are sure to be defeated in the hands of disbelievers if they themselves are at war with Allah and His Messenger by being involved in interest-based transactions, as validated by the case of the Ottoman Empire. The paper goes on to argue that this is why no specific punishment in this life is mentioned for this crime; rather extreme psychological pressure is imposed, so that the believers do not even consider getting close to dealing with interest. Originality/value – This paper addresses a missing component in the existing literature of Islamic economics where the political economic aspects of interest has seldom received due attention. A careful analysis of these issues is expected to help people better understand the dire consequences of dealing in interest on a micro level. On a macro level, it can always help to formulate prudent foreign policy by learning from the mistakes of our ancestors.
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