Islamic Banking and Finance: Traders not Mere Financial Intermediary

Abstract

Although Islamic Banking and Finance has been in existence since 40 years ago, the subject of Islamic banking and finance continues to be at the forefront of economic and financial discourses all over the world. The issue of Islamic banking and finance losing its credibility, its apparent inability to respond decisively to the need of its clients and accusation that Islamic banking and finance is mere replication of the conventional system are but some of the pressing issues that need to be addressed before they can ruin the legitimacy of Islamic banking as a viable alternative system. Using qualitative research method by utilising document analysis, this paper attempts to critically investigate the role and function of Islamic banking and finance as a financial intermediary and trader in the course of discharging its fiduciary function as bank and financial institution. This article also addresses the major role of Islamic bank as a financial intermediary as well as at the same time trader of goods for sale to the customers.

DOI: 10.5901/mjss.2015.v6n3p181