How is sharia applied to banking and finance laws?
Islamic banking and finance is a rapidly expanding industry that seeks to harmonize modern business practices and traditional religious norms. Classical sharia prohibits riba, the charging of interest. It also condemns excessive profits and requires Muslims to invest only in ventures that are consistent with Islamic principles; for example, investing in a brewery or casino is forbidden. The Islamic finance industry, with estimated assets of $200 billion to $300 billion, represents a small chunk of the global marketplace, but is “already playing a significant role in the financial systems in the Middle East,” said John B. Taylor, U.S. under secretary of the Treasury, in a 2004 address. Some Muslim countries, including Malaysia, are making an effort to issue national bonds that comply with sharia principles. And in 2002, eight Muslim countries–Malaysia, Indonesia, Iran, Saudi Arabia, Pakistan, Sudan, Bahrain, and Kuwait–launched a new organization, the Services Board Islamic Financial,
