Belief in divine guidance

The foremost belief is that the whole universe is created and controlled by One, the only One Allah. He created and appointed human as His vicegerent on earth to fulfill certain objectives through obeying His commands. His commands has a balanced approach to govern human life.

Belief in divine guidance

On one hand it has left a very wide area of human activities to his own rational judgment where he can take decisions on the basis of his reason, assessment of facts and expedience. On the other hand, Islam has subjected human activities to a set of principles which have eternal application and cannot be violated on superficial grounds of expediency based on human assessment.

Belief in divine guidance

The areas in which human reason cannot give proper guidance, Allah Almighty has provided guidance through His revelations sent down to His prophets. The teachings of Islam contains guidance in every sphere of life including socio-economic fields.

Belief in divine guidance

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The primary objectives of Islamic Economic System are as under. 1. Equal Distribution of wealth 2. Social justice These objectives can never be achieved in Interest/Riba based economic systems Islamic economic system can contribute in the following ways to achieve the above objectives:

Belief in divine guidance

While permitting the individual the right to seek his/her economic well-being, Islam makes a clear distinction between what is halal (lawful) and what is haram (unlawful) in pursuit of such economic activity. Acknowledging the right to ownership of wealth legitimately acquired but make it obligatory to spend the wealth judiciously and not to hoard it or keep it idle.

Belief in divine guidance

Allowing individuals for keeping any surplus wealth but at the same time making it obligatory to participate in the process of zakat for the well-being of the poor and deprived sections of the society. Islam seeks to prevent the accumulation of wealth in a few hands for the betterment of the society as a whole, by its laws of inheritance.

Belief in divine guidance

Viewed as a whole, the economic system envisaged by Islam aims at social justice without inhibiting individual enterprise beyond the point where it becomes not only collectively injurious but also individually self-destructive.

Capitalist vs islamic economy

Capitalism is a system wealth and means of producing wealth are privately owned and controlled. The private ownership can take any economic decision without any restriction from the divine injunctions. If there are any restrictions, they can be changed through democratic legislation, which accept no authority of any super-human power.

Capitalist vs islamic economy
Impact:  This attitude has allowed some imbalances in the society. Interest, gambling, speculative transactions tend to concentrate wealth in few hands.  Unhealthy human instincts are exploited to make money through immoral and injurious products.

Capitalist vs islamic economy

Uncontrolled profit making creates monopolies which paralyze the market forces and stops the natural process of supply and demand because these forces can properly work only in an atmosphere of free competition and not in monopolies. Under this system any economic activity is allowed to be continued if it is in the interest of some influential circles, who dominate the legislature on the strength of their majority, even if the activity is not in the interest of the society as a whole.

DIFFERENCE BETWEEN ISLAIC AND CONVENTIOANL BANKING
Islamic Banking 1) Functions and operations are based on Sharia’h principles 2) Promote risk-sharing between provider of capital (investor) and user of funds (entrepreneurs)
Conventional Banking 1) Functions and operations are based on fully man made principles 2) Investor is assured of predetermined rate of interest

DIFFERENCE BETWEEN ISLAIC AND CONVENTIOANL BANKING
3. Aim at maximising profit but subject to Sharia'h restrictions 4. Partners, investor and traders, buyer or seller relationship 5. Encourage asset-based financing and based on commodity trading
3. Aim at maximising profit without any restrictions 4. Creditor-Debtor relationship 5. Based on money trading. Money is a medium of exchange and not a commodity, its sale and purchase is prohibited in Islam.

DIFFERENCE BETWEEN ISLAIC AND CONVENTIOANL BANKING 6.No right of profit if there is no risk involved. The profit and loss sharing depositor may lose money in case of loss. 6.It is almost risk free banking and depositor has no risk of losing its money because interest is guaranteed.