How Islamic Banking Does Justice to Malaysian Society

Abstract

The term 'Islamic banking' means the conduct of banking operations in parallel with Islamic teachings. In view of this definition, Islamic banks are expected not to have the same philosophies and objectives as adopted by the conventional banks; but theirs must be in line with the teachings of Islam. Islamic business entities are required to engage themselves in legitimate and lawful business and to fulfil all obligations and responsibilities. All transactions are based on the concept of honesty, justice and equity. This paper seeks to examine the economic aspect of justice in terms of Islamic banking. By comparing the pertinent literature on Islamic banking and conventional banking system, this paper also seeks to describe the pros and cons on the Islamic Banking practices and compare its differences with the conventional banking practices on how it reflects justice to the whole society.