A Systemic Analysis of the Islamic Banking System

The gradual development of human societies makes the division of labor more elaborate and specialized in all areas. This has led to establishing some institutions including the banking system in the society. The processes within the traditional banking system are not compatible with the basic principles of Islam. However, the need for such a specialized institution in the society has driven Muslim scholars to modify the banking system and make it compatible with the Islamic principles so that Muslim communities may benefit from this institution. Using an analytical method, this paper seeks in line with the reform in the Islamic banking system, to present a new analysis of the banking system which has priority over any kind of reform in the banking system processes. A systemic analysis of the Islamic banking system which examines the position of the banking system in Islam with regard to the interaction with the economic system and the general Islamic system as one of the components of the economic system in Islam. This analysis shows that the systemic outlook on the Islamic banking system leads to underlining the duties of banks and then achieve growth, justice and economic security. Among these duties are financing the real sector of economy, giving priority to financing basic commodities, financing the projects proposed by the lower classes, giving priority to financing the economic projects which need working capital and negation of economic favor in using bank loan facilities.