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Islam's view of Fractional Reserve Banking

Printed From: IslamiCity.org
Category: Religion - Islam
Forum Name: Islamic Finance
Forum Description: Islamic Finance
URL: https://www.islamicity.org/forum/forum_posts.asp?TID=42521
Printed Date: 21 November 2024 at 7:22pm
Software Version: Web Wiz Forums 12.03 - http://www.webwizforums.com


Topic: Islam's view of Fractional Reserve Banking
Posted By: Truth_Seekr
Subject: Islam's view of Fractional Reserve Banking
Date Posted: 21 April 2018 at 9:52pm
Hi, 
Assalamualaikum! 

 I had a question about the way finance works in the modern world, with regard to how money is made. 
 
 The money we use is created in the economy through what is called, 'Fractional Reserve Banking' System. 
 Here's the Wikipedia link ... 
  https://en.wikipedia.org/wiki/Fractional-reserve_banking" rel="nofollow - https://en.wikipedia.org/wiki/Fractional-reserve_banking
 
 The system is interest-based, which means that it is essentially what's called 'Riba' in Islam. Since this is the case, what is Islam's view on Fractional Reserve Banking? Is it to be considered as 'Riba' and because of this, 'Haram'? 

 And by the way, please look up on what is 'Fractional Reserve Banking' if you don't understand how it works ... 

 Sincerely, 
 -  Truth_Seekr
 



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