JAK Bank: An authentic framework for interest-free banking

The prohibition on interest is widely attested in the scriptures of monotheistic religions – including Islam, Christianity and Judaism – but several economists have long argued that an interest-free economy could “never work” in today’s complex and globalised world.

Recent developments, however, are starting to challenge such attitudes. The Islamic financial services industry, for example, has been experimenting since the mid-1970s to develop an interest-free financial system based on the values of justice, equality and morality.

As a new and emerging industry, Islamic finance is currently facing growing calls to develop new business models that serve as catalysts to enable grassroots financial inclusion and offer greater authenticity. The...