Thursday, 21 September 2017






 In the name of Allah, The Most Beneficent, The Most Merciful.

I would like to stand on the existing protocol to save time, However, To say that I feel highly humbled and honored to stand before this August Gathering and talk on Islamic economics and finance is an understatement, Moreover, when I am being asked to co-Present with so many popular names in the Din of Islam, I thank the organizers for this opportunity,

I also need to thank the organizers the more for making my job easy because when I got the invitation to come and speak at the event and was also given as at topic accidentally one of the assignments I submitted to the Institute of Islamic banking and insurance, London as a Post Graduate Diploma Student, I just went into my archives, dusted the paper and added few things to it, thank you so much.

However, to explain the Islamic finance and economics morality, there is need to show the areas in which Islamic and conventional economics differ when talking about the responsibility that the individual has to other individuals and to society as a whole, I  will start by looking at the definitions of both The Islamic economics and conventional economics, some of their concepts, the impacts of the Islamic economics and finally draw the lines between the often interchangeably though wrongly used concepts of morality and ethics, Hence I choose as a rider to the paper topic: "Differences between Islamic and conventional banks(Defining the responsibility of individuals to individuals and to society as a whole.



Islamic economics is a comprehensive and independent economic theory which defines economic principles based on islamic law(shari'ah) and takes into account  the material, spiritual, social and political factors.

The Islamic economics has as its major objectives the welfare of mankind and wealth maximization through Islamically permissible means, this objectives are enunciated by imam al ghazali, to be protection of lives, property, intellect, family and religion, simply put the maqasid Shariah-Objective of shariah is the promotion of benefit and removal of harms. while the conventional economics according to Prof Robbins is “a science which studies human behavior as a relationship between ends and SCARCE means which have alternative uses(

It’s also defined as -a social science of studying the way in which individuals and societies choose among the alternative uses of SCARCE resources to satisfy human need, 

From the two definitions of conventional economics above, it's shown that there is limited and short supply of means of livelihood, this engenders aggressive selfishness, competition, and mutual conflict among individuals which definitely leads to survival of the fittest, winner takes all attitude, and lack of brotherhood, while in Islamic economics the quran makes us to believe that resources are not limited, and this brings about contentment, human sympathy, co-operative attitude, lack of depression etc, Quran chapter 11 verse 6,"And no moving (living) creature is there on earth but its provision is due from Allah. And He knows its dwelling place and its deposit (in the uterus, grave). All is in a clear Book (Al-Lauh-Al-Mahfuz, the book of decrees with Allah)

Also in quran chapter 15 verse 20,The Almighty Allah says "And we have provided therein means of living for you and for those whom you provide not(moving (living) creatures, cattle, beasts and other animals,

Quran 51 verse 58,"verily,Allah is the All-Provider,Owner of Power, the most Strong, according to the holy Prophet Muhammad(PBUH) ‘Umar said, “I heard the Messenger of Allah, may Allah bless him and grant him peace, say, ‘If you were to rely on Allah as He should be relied on, He would provide for you as He provides for the birds. They go out early in the morning hungry and return in the evening full.’” –Narrated by at-Tirmidhi 

It should be known that resources are not scarce as the Allah says, resources are abundant, scarcity is caused by human instinct of self preservation, stinginess, lack of believe in accountability on the day of judgment and lack of effort because the holy quran also says in chapter 53 verse 39"And that man can have nothing but what he does (what he strives for). 

It's necessary to juxtapose the concepts of each type of economics-The Islamic and conventional, and view more of their implications on individual relationship with each other and the implication on the society as a whole.

Islamic economics-there is no difference between economy and religion, hence, no difference between material and spiritual lives, Islam is a complete way of life, and you cannot be a perfect Muslim, until all aspects of your life reflects Islamic teachings including the area of economy, conventional economics-it emphasises materials mainly, though not completely value free, moral aspects are not audited by the independent supreme being

Islamic economics-Better Brotherhood is promoted through the institution of zakat, inheritance, waqf (trust fund), inheritance etc. Conventional economics-Tastes, behavior and preference of individuals are major consideration.

Islamic economics- moral uplifts is preached, each, source of wealth must be pure, just dealing with each other, no cheating, prohibition of paying and receiving interest(RIBA),it should be noted that RIBA has a lot negative implication on individuals and society, prominent among which are:

  • Exploitation of the poor by the rich.
  • Encouragement of lazy attitude through creation of leisure class.
  • Hatred and enemity to be borne by the debtor against the creditor and vice versa.
  • Rich getting richer and poor getting poorer I.e the effect of capitalism

Conventional economics-paying and receiving of interest encouraged with its attendant negative implication, capitalism is also encouraged, and there is concentration of wealth in individuals' hands.

Hereafter  -The consciousness of the importance of the hereafter is stressed in Islamic economics, participants are aware of fair dealings on the day of judgment while the scope of life in terms of material welfare and prosperity only is covered in modern economics.

Self interest   -This is highly discouraged in Islamic economics, self interest can come through maximization of wealth, the holy prophet says in An-Nawawy Hadith collection "none of you is a believer, until he loves for his brother what he loves for himself"', whereas the concept of self interest is common in conventional economics, Islam encourages self plus societal interest.

Trust -In Islam, resources are seen as a trust and we shall be made to account for it's usage, this makes participants in Islamic economics to have the piety of their creator in business transaction.

Man   -human being are regarded as vicegerent of Allah with inborn good moral qualities. Quran chapter 2 verse 30,....verily, I am going to place (mankind) generations after generations on earth", also quran 17 verse 70,talk about children of Adam as honourable, conventional economists feel that man is like an animal always wanting to satisfy its instinct which Darwin refers to as "survival of the fittest", this make people to throw caution to the wind when looking for means of livelihood.

Wealth-while conventional economics emphasises wealth production, Islamic economics consider wealth production, consumption, exchange and its equitable distribution, Islam uses zakat, sadaqah, inheritance to redistribute wealth and also prohibits extravagance, stinginess and unlawful earnings.

Values-The pillars of conventional economics which are unlawful means of income, speculations, interest, gambling, uncertainty in business transactions, hoarding are discouraged in Islam because of attendant consequences of cheating, exploitation, enemity, hatred etc.

Theory-Islam doesn't believe always in the in the theory of less supply more demand because once something is regarded as a vice/prohibition, it's less supply will not lead to increase in its demand e.g alcohol, which intake is a drain in purse and intellectually disturbing.

Hypothesis-The objectives of conventional economics which is purely for material goods has its hypothesis based on personal judgment and empirical evidences, while that of Islamic economics which is the achievement of welfare of mankind "falah" is based on personal judgment, empirical evidences and more importantly the divine guidance.

Lastly, there are always suggestions on better ways to solve economic challenges in Islamic economics, because quran and Sunnah of the holy prophet are filled with ways of solving our problems be it political, economic, spiritual or social, Quran 6 verse 38....."We have neglected nothing in the Book...."


In order to show how the two concepts of ethics and morals are different, I will give the definitions of both and practical examples to buttress my assertions

Ethics-according to the Cambridge international dictionary of English, is usually plural and it means a system of accepted beliefs  which control behaviors especially such a system based on morals, we hear of business ethics, legal ethics, medical ethics etc. 

Example, The ethics of some people in business seems to be to maximize profit and it does not matter how, the issue of morals as regards honesty, fairness etc does come in here, While ethics could incorporate moral principles, this moral principles are not supervised and audited by an independent committee with power to veto transaction.

Morality on its own is often used for conducts or standard associated with religious belief, it's also defines as the subject etiquette of behavior accepted as norm by society--the lubrication which enables the various machineries of human community to operate and interact with ease (A.A Mawdudi,1978,)

As an educational subject, morality is the science of virtues and the way to acquire them, of vices and the way to guard against them (K.O Paramole,2000)

Morality according to Cambridge international dictionary of English," is a personal or social set of standard for good or bad behavior and character or the quality of being right, honest or acceptable.

Quran, undoubtedly is the book of moral injunctions, it covers personal, social, economic, interpersonal codes of conduct that must be imbibed by all Muslims and demonstrated when dealing with non Muslims too.

Personal/interpersonal-quran chapter 31 verse 13-19,

Social-quran 48 verse 11,Q49v 16 etc

Examples of link between ethics and morality

(1) While its morally wrong to steal, it's ethically right professionally for a lawyer  to defend an accused thief in law court. That is why it's said that "there is no morality in law"(secular)

(2) While its morally wrong to abort pregnancy, it's ethically right for a medical doctor to terminate a pregnancy, especially, if the life of the mother- the pregnant woman is endangered

(3) Its morally wrong to smoke, but its ethically right for government to collect taxes from tobacco making companies

(4) The business ethics of some companies are to maximize profit not minding how, it's when talking about how, that the issues of morality will come in.

Generally speaking morality is said to be relative but in Islam the code of conducts as stated in quran and Sunnah must be followed to the letter, in Islam, Muslims must uphold truth, honesty, fairness etc in their business dealing, and also respect other people's right and work hard in a spirit of sacrifice.