Download or read book Theoretical Studies in Islamic Banking and Finance written by Mohsin S. Khan and published by . This book was released on 1987 with total page 274 pages. Available in PDF, EPUB and Kindle. Book excerpt: Islam proposes that the banking systems that operate on the basis of an ex ante fixed rate of interest to replaced by a profit-sharing system in which the rate of return to the financial resources is not known and is not fixed prior to the undertaking of the transaction. While in Islam interest is forbidden, trade and profits are permissible and in fact encouraged. The papers in this volume all address one or more of the basic questions at the theoretical level. The represent a start in the attempt to introduce rigor into the analysis of Islamic banking and finance, thereby clarifying the nature of the basic relationships underlying the system.