Principles

• The basic approach of Islamic banking is that the bank is not a financier of projects, but a partner in building something. In a way, an Islamic bank is reminiscent of a merchant bank, though one that does not charge interest. Money in Islamic banking has no intrinsic value, only assets do. Therefore, the bank acts as an expert partner with those people it finances. It makes its money by sharing in the profits of the enterprise, not by charging interest.
  
  

Challenges

• Islamic banking has only recently become an international phenomenon that is noticed by the business community in the West. Islamic banking has a bright future only insofar as it is capable of creating its own money markets, Islamic IMFs and other international bases of its operation. The future of Islamic banking is based around its creating an international structure and market that can directly confront the crisis-ridden Western banking establishment.
  
  

Prospects

• French Islamic banking expert and journalist Gerard al-Fin reports that, as of late 2008, most Islamic banks were profitable and expanding. The banking crisis in the West, which started in 2007 has continued as of 2011, has forced many in the financial world to look to different models of banking. Islamic banking seems to be more stable than conventional bank practices because it is asset based, not money based. This means that the only time the bank takes a profit is when the production that it finances thrives, and the bank then takes some of the profit. Islamic banking works because it is based not on money, but on the actual production of the firms that it finances. The bank does not merely finance a firm; it becomes partners with it.
  
  

The Future

• According to the Institution of Islamic Banking and Insurance, the big issues for the future are increasing specialization and expertise in different economic areas, as well as redesigning the basic economic priorities of Muslims and Muslim states. Sayyid Tahir of the Pakistani Central Bank holds that the standardization of banking practices and increasing the bank's stability are the two major problems for the future. Both authorities on Islamic banking hold that the real future struggle will be to redesign and reconstitute newer and different economic models for their societies that stress real production and assets over the worship of money as a commodity in itself.