The Role of Islamic Banking and Challenges in Global Financial Crisis: In Nigeria

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Introduction

Islamic banking or interest-free banking as it is alternatively called is a banking system based on the principles of profit and loss sharing by all the stakeholders.

Islamic banking concept owes its origin to the Islamic concept of money. In Islam, money does not in itself produce interest or profit, and is viewed as a medium of exchange and not as a commodity. Already Ribah (interest) is prohibited in Islam.

The status of Islamic banks in relation to their clients is that of partner – investor and trader. Whereas, in conventional banks of the West the relationship is that of creditor or debtor.

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