Since there is interest in eliminating the
usury system among Muslims
why can we not start an Islamic bank in a co-op style? Each person
interested will bank his money with this bank. People are not making
any profit investing their money in the RIBA system. We should not
expect making any profit banking with this new co-op until our Muslim
economist brothers figured out a way to expand this bank. Allah (SWT) will guide our economists in way's to invest our
savings and may be
exchange our mortgages in the future with more Islamic way's. Is this plausible?
It is possible and there are, in fact, a number of schemes operating.
Mostly these are local or regional schemes involving people who know
each other sufficiently to trust each other, because there will be no
protection against somebody who defaults on their commitment. This
type of self-help group cannot be official as then it is regulated by
state, and so the various existing schemes are not big enough to tackle
mortgages, but there are lending pools for business people to help
them through with cash flow problems, and save-and-finance
programmes operated by local or mosque communities. To extend
the benefit of such schemes to a wider public, there will need to be a
political change in what kind of financial set-ups are permitted by
At the moment, no lending institution may altogether bypass the
charging of at least the base rate set by the national bank.