A2; INTRODUCTION;;; Function of the modern banking -commandments of the Holy Quran and the holy prophet Views against interest free banking bold step of the govermment conclusion.
Modern banks play a vital role in the economy of a country. bank carries its business in terms of maney it collects money as deposits from the people and gives the same on loan to the traders businessmen producers and entrepreneurs it helps the country in increasing production and employment
the present functioning of modern banking is based on fixed rste of interest it has on doubt contributed a lot to the expansion of the countrys production capacity and services but at the same time it has responaible for causing voids and imbalances in our society the existing banking service enterains only the samall privileged class and all facilities of banking credits are extended only to it this arrangement creates class the proper development of the country productive resources both agricultural and industrial as well as the expansion of unachieved it gavs birth to capitalistic system of aconomy with all its evils the tragedy is that while the common man continues to suffer we-the muslims of the Islamic Republic of pk have failed to evolve a system in order to ameliorate his lot there remains hardly any doubt that the fixed interest banking has mainly responsible far price hike and infaltion
there are many who think that interest free banking is not feasible in our country it is possible in rich countries which can meet the expenses of the banking in our economy interest free banking will be only a futile exercise it will have an adverse effect on our already deteriorating economy it will not be able to any further shocks or jolts with this kind of experimentation.
After a careful consideration of these and other allied points our government took a step
to abolish interest from the participation on a profit and loss basis has been introduced in the bank which are encouraged to operate on a no-inerest this enables people to forget ahead in life on the strength of their personal qualities and competence rather then their weath the accumulation of which should not be sole object of a mans life any way.
IT is not an easy job to do away the century old instition of interest it cannot be adopted instantly in such a complicated state of affairs we can get rid of interest system try gradual process