Deconstructing Islamic banking – history of debates, and steps to an alternative future

Abstract

Purpose

There is almost a consensus amongst Muslim scholars that the most crucial problem faced by the Muslim world is in the prevailing ideas (including sanctification, archaism, the common paradigm, the absence of the role of the intellectual, etc.) which formulate people’s thoughts and determine their options. There will not be a genuine renaissance of Islam without updating these ideas and emerging from the cocoon of the past. This can be done through a modern approach which would respond to the changes by looking towards the future rather than towards the past. This study aims to identify the intellectual aspects of this crisis and how this crisis has formed and influenced Islamic banking.

Design/methodology/approach

To analyse this crisis, the methodology called causal layered analysis (CLA) is used, which is drawn from the field of strategic foresight and designed by Inayatullah (2002). CLA is designed on the basis that the way to understand the nature of the problem will determine the proposed solutions, by diving through the surface phenomena of the problem to the depth of the “motors” of the crisis.

Findings

The author finds that Islamic banking is the offspring of its incubator ideas and reform, and the change and progress of Islamic banking can only deal with a critical approach of these ideas; Islamic banking promotes itself as an alternative to conventional banking, but this has not been achieved except on the level of form rather than substance; Islamic banking is a movement within a variable reality, and inertia in specific form and context will keep it in a state of crisis and may lead to its demise.

Originality/value

To the author’s knowledge, this is the first study showing the roots of the ideas making up the fabric of banking in the Muslim world and the repercussions of intellectual crisis on Islamic banking.

Citation

El-Ghattis, N. (2016), "Deconstructing Islamic banking – history of debates, and steps to an alternative future", Foresight, Vol. 18 No. 2, pp. 138-155. https://doi.org/10.1108/FS-09-2015-0044