The origin of the modern Islamic bank can be traced back to the very birth of Islam when the

Prophet himself acted as an agent for his wife's trading operations. Islamic partnerships
(mudarabah) dominated the business world for centuries and the concept of interest found very
little application in day-to-day transactions.
Such partnerships performed an important economic function. They combined the three most
important factors of production, namely: capital, labour and entrepreneurship, the latter two
functions usually combined in one person. The capital-owner contributed the money and the
partner managed the business. Each shared in a pre-determined share of the profits. If there was a
loss, the capital-provider lost his money and the manager lost his time and labour.
Status of Islamic Banking
Islamic banking is no longer a novel experiment. When the concept of Islamic banking with its
ethical values was propagated, financial circles the world over treated it as a utopian dream.
Having lived for centuries under the valueless capitalist economic system, they asked what
ethics had to do with finance?

Besides their range of equity, trade-financing and lending operations, Islamic banks also offer a
full spectrum of fee-paid retail services that do not involve interest payments, including checking
accounts, spot foreign exchange transactions, fund transfers, letters of credit, travellers' checks,
safe-deposit boxes, securities safekeeping investment management and advice, and other normal
services of modern banking. Islamic banking because of its value-orientated ethos enables it to
draw finances from both Muslims and non-Muslims alike.

Islamic banks are evolving financial and investment instruments that are not only profitable but
are also ethically motivated. The ever-increasing application and innovation of the
methodologies associated with derivative instruments that revolutionised the global financial
industry have also led to a global financial crisis because of the excess greed for profit and the
immense uncertainty and risk associated with these types of transactions. There are doubts
associated with the permissibility of derivative instruments under Islamic finance generally.

Addressing issues to resolve the global financial crisis world leaders called for a set up on the
basis of capitalism of entrepreneurship where banks finance economic development in the real
economy, as opposed to the set up on the basis of capitalism of speculation whereby banks
derive excessive profit from speculative transactions that do not make any contribution to the
real economy.

The first Islamic bank was established in Malaysia in 1983. In 1993, commercial
banks, merchant banks and finance companies begun to offer Islamic banking
products and services under the Islamic Banking Scheme (IBS banks). The IBS
banks have to separate the funds and activities of the Islamic banking transactions
from the non- Islamic banking business (conventional banking)
Banks practicing Interest free loan system.
*Bank of Whittier USA
*Jaiz islamic Bank Nigeria
*Dubai islamic bank pakistan LTD
*Yemen islamic bank
*qatar islamic bank

*bahrain islamic bank
*syria islamic bank
*Palestine islamic bank
*Arab islamic bank
*Faisal islamic bank of egypt
*jordan islamic bank
*Arab banking corperation
*islamic banking network international
*albaraka bankig group
*institute of islamic banking
*Meezan Bank pakistan
*Bank of palestine
*Al-Tawfeek
*Bank Muamalat Indonesia
*Central Bank of Malaysia
*Economics & Islam
*Falaika International
*Guidance Financial Group
*Harvard Islamic Finance Programme
*Islamic Banking and Finance Books
*Lariba USA
*Journal of Economic Literature- Interest Free Banking
*National Bank of Oman
*OCBC
*Saturna Capital
*Jordan Kuwait Bank
*Islamic Banking and Finance Books
*Abu Dhabi Islamic Bank
*Bank Syariah Mandiri Indonesia