Goals of Islamic Banking

The Banking system should, like all other aspects of the Islamic way of life, be made to contribute richly to the achievement of the major socio-economic goals of Islam. The system should also continue to perform the usual functions that relate to its own special field which other banking systems performs.

Some of the most important goals and function necessary for an Islamic Banking system are socio-economic justice and equitable distribution of income and wealth as well as the stability in the value of money to enable the medium of exchange to be a reliable unit of account.

Mobilisation and investment of savings, coupled with effective rendering of all services normally expected from the banking system are equally important in achieving the goals of an Islamic banking services provider.

It may be argued that the goals and functions of the Islamic banking system are similar to those under capitalism but there is in fact a significant difference in emphasis, arising from the divergence in the commitment of the two systems to spiritual values, socio-economic justice and human brotherhood.

Basic Concept: How an Islamic Bank Accepts Deposits

Deposit taking is one of the sources of funds of an Islamic bank, whereby it may enter into a contract of mudharabah, wadiah or qard with a depositor.