“Faithful money” as a new monetary concept of the Islamic banking

Abstract

Coinciding with the Great Recession, Islamic banks have grown rapidly and have crossed the significant milestone of increased wider acceptance at a global level. In part this is due to their unique behavior in considering both ethical and economic activities rather than focus of profit only. This presents a departure from the conventional finance systems based on the use of the interest and the time value of money. This has led to propose new pattern named ’Faithful Money’ for valuation of money and for a performing monetary policy according to Islamic finance basics. This paper presents how following Islamic finance principles can offer substantive contributions to the economic and social development of the world by revealing the rational route to the vision of the highest good without the anathema of interests and debts’ dependence and to embrace the goal to advance the needs of humanity as a whole.