The underground banking systems and their impact on control of money laundering: with special reference to Islamic banking

Abstract

Notes that Islamic banking is gaining momentum, with over 200 Islamic financial institutions; money laundering is one of many threats to it. Indicates the principle in Islam of bank secrecy and confidentiality, listing the exceptions to this principle: the public interest, when individual rights have been denied, contractual provision, and mandatory disclosure. Describes the practice of Islamic banking, which is well established despite its short existence. Continues with violations of the principles of Islamic banking, with examples from Sudan and Dubai, and finally the BCCI. Concludes that, despite the control and ethical basis which Islamic law gives to banking activities, there are many loopholes in the system which allow money laundering.

Citation

El Rahman, F. and El Sheikh, A. (2002), "The underground banking systems and their impact on control of money laundering: with special reference to Islamic banking", Journal of Money Laundering Control, Vol. 6 No. 1, pp. 42-45. https://doi.org/10.1108/13685200310809392