The history of formation banking system in Islamic culture

Abstract

The article examines the history of Islamic banking. For a more detailed study the history of Islamic banks was reviewed from both the theoretical and practical sides. As well as this article deals with factors that contributed to development of Islamic banks as an alternative to classical Western banks. The Islamic banking system is based on Sharia rules, which take their basis from the holy Quran and Sunnah. Today in the world there are more than 700 Islamic financial institutions. And also Islamic banks operate not only in Muslim countries, but also in the west. The stability of the Islamic banking system during the global financial crisis attracted particular attention of many capitalist countries.

            Based on this article, we can conclude that the main reason for the formation of Islamic banking system was the religious beliefs of the Muslim society. Because it is commonly known and acknowledged that Islam has strictly prohibited interest. It disapproves both giving and charging interest. Also, the article reveals the circumstances of the first Islamic banks that were created in the second half of the 20th century.