Creation of Money and Islamic Banks
Dr. Asad Zaman[1]
1 Introduction
In ancient times, alchemists searched for the secrets of
turning base metals into gold. In modern times, the fractional reserve banking
system has turned the dreams of the alchemists into a reality. However, the
secrets of credit creation by banks are kept hidden from the general public.
For this reason, discussions and controversies about Islamic banking have not
mentioned this crucial issue, even though rulings about the legitimacy or otherwise
of financial transaction within Islamic law depend on it.
