Group Members:

Fahad Ur Rehman Khan

Introduction

Islamic banking prohibits excessive money on loan.

Islamic banking focus on personal as well as society well being.

Islamic banking is designed to being justice and equality in society.

Islamic banking has introduced different pattern of baking (Renting, Trading and Partnership) with mutual consent to encourage brother hood in society.

Points we are going to discuss

Achievement of Falah.

Fair and Equitable Distribution.

Provision of Basic Human Needs.

Zakat and Sadaqat.

Promotion of Brotherhood and Unity.

Achievement of Moral and Material. Development.

Circulation of Wealth.

Elimination of Exploitation.

Economic Freedom.

Achievement of Falah It refers to spiritual, moral and socio-economic well-

being in this world and success in the Hereafter.

At micro level, Falah refers to a situation where an

individual is adequately provided for in respect of his

basic needs.

at macro level, it aims at establishment of an

egalitarian and happy society with clean environment,

with freedom from want and with opportunities to its

members for progress in socio-political and religious

affairs.

The economic system of Islam, therefore, aims to

achieve economic well-being and betterment of the

people through equitable distribution of material

resources and through establishment of social justice.

Fair and Equitable Distribution

Islam discourages concentration of wealth in few hands and ensures its circulation among all the sections of society.

primary objective of the Islamic economic system to bridge the gulf between the rich and the poor by modifying the distribution of wealth and economic resources in favor of the less-fortunate.

Examples of Fair and Equitable distribution:

institution of Zakat and Sadaqat,

laws of inheritance and will, abolition of interest, prohibition of earning of wealth by Haram (unlawful) means, prohibition of hoarding, etc.

Provision of Basic Human

Needs It is also an important purpose and objective of the

Islamic economic system that basic necessities of

life like food, clothing and shelter should be

provided to all the citizens of the Islamic state.

It is the obligation of the Islamic state to provide

the basic needs of life to those of its citizens who

are unable to earn due to physical disability,

unemployment or any other reason.

The Islamic economic system ensures the

provision of basic needs to every needy person

through its comprehensive system of social

security.

Zakat and Sadaqat

Many restrictions have been placed barring an individual to earn wealth through unfair, illegal and unjust means. Besides that the Islamic state can also levy taxes.

If all the economic teachings of Islamic are acted upon, the distribution of incomes and wealth properly based on the principles of socio-economic justice will be automatically achieved.

Major objective of the economic system of Islam is to establish social or economic justice among its followers.

Islamic banks have special offers for zakat and sadaqat for the needy people in society.

Promotion of Brotherhood and

Unity

Another objective of the Islamic

economic system is to establish

brotherhood and unity among the

Muslims.

Mutual consent, is the best thing which

Islamic banking has introduced that,

both the partners agreed on a ratio and

share profits among them.

Achievement of Moral and

Material Development

The economic system of Islam aims at

material as well as moral development

of the Muslim community.

It prohibits from earning from unfair

means which causes concentration of

wealth in a society.

Circulation of Wealth

Another important objective of economic system of Islam is to discourage hoarding and ensure the constant circulation of wealth.

So the Quran not only discourages hoarding of wealth but also threatens persons responsible for this heinous crime with the dire consequences.

The economic system of Islam achieves this objective through Zakat. Zakat is a great enemy of hoarding. If it is paid regularly on the hoarded wealth, it would eat away the whole or main portion of such wealth in a few years time.

Circulation of Wealth

Thus a person possessing such hoarded

wealth is forced to bring it into circulation

by investing it or spending it.

The objective of circulation of wealth is

also achieved through other compulsory

and voluntary Sadaqat, through laws of

inheritance and will and through

monetary atonements.

Elimination of Exploitation

To achieve this end Islam has taken many effective measures;

First such measure is the abolition of interest or usury which is and has been perhaps the worst instrument of human exploitation.

The Qur’an calls it Riba and declares it a heinous crime which amounts to war against God and God’s messenger.

And prohibits Gharar, because Gharar is thing, which can easily exploit wealth.

Economic Freedom

Every individual, according to Islam, is accountable for his actions done in this world.

He would be rewarded for his good actions and punished for his evil actions in the hereafter.

Therefore, Islam puts highest value on individual’s freedom of action in every field of human activity such as social, political, economic religious, moral, etc.

Basic human needs: To fulfill basic human needs or loan from islamic bank and lending money to the needy ones or by doing sadaqaat and zakaat.

Musharakah and social justice

Allowing two persons to do business and flourish in a society.

Sharing, profit and loss with the ratio decided by both of the partners.

Both can be intervene and see the progress of work or management.

Islamic Banking, has opened a gate for all those entrepreneurs who wants to do Halaaland fair business in a society.

Musharakah, enables the investment in business which positively raise the economy for good.

Mudarabah and social justice

It is the best example of flow of money from rich to poor.

Through this, Islamic banking has enabled that if someone has skills but don’t have much investment, can do business now. By getting investment from a partner and working on your business.

It is the equality for the people in a society go show skills and earn fairly.

Conclusion

Implementation of Islamic bank is very healthy for every society.

it aims at establishment of an egalitarian and happy society with clean environment.

Islam discourages concentration of wealth.

Flow of money from rich to poor.

Helps fulfillment of basic needs.

Motivate people to do Sadaqaat and Zakaat.

Allows people to do their own business.

Disapproves the idea of Intrest.

Conclusion

Stops from concentration of wealth.

Flow of money is the first priority.

Motivates brotherhood by mutual

consent of profit and loss distribution.

Musharkah and Mudarbah, are the fair

and best ways to do Halaal business in

society and makes economy flourish.

For your time and concentration…