Islamic Finiance

Scholars of Islamic finance seem to be overly immersed in issues related to interest. Efforts to create so called Islamic finance instruments have at best only marginally departed from the conventional interest bearing ones and so called Islamic finance is perhaps very little different from conventional finance. It seems that the Koran forbids punitive interest rates and interest on basic consumption. It can also be argued that the Koran would justify returns on loan to cover inflation on grounds of justice and equity.
Islamic finance of course is much more than interest free finance. The Koran recognizes and encourages disparity in incomes, in fact the competition and struggle (though not to the point of extinction) is recommended so that society can identify the talented and progressive for installation in leadership and management positions in society .The Koran, however forbids absolute poverty’ in form of poor tax but more importantly the Koran requires parity or at last convergence in consumption. Other words the Koran encourages disparity in incomes but insists in parity in consumption , those who are high earners need to make ‘surplus’ capital available to society in form of investment and production or consumption or outright charity .Poverty is seen as an ill which discourages individuals form the higher purposes of life and hinders the cohesion of the society. High earners need to fund education health et for society at large and this is an investment towards tension free and risk free existence as the rich when they turn poor will be given the same treatment and they or their children will not be deprived .