INTRODUCTION

Business in Islam is guided by Shari’ah and a set of ethical standards.^[506] Some of the core tenets that Islamic business should endorse include divineness, legitimate ways of earning, righteousness, generosity towards consumers and selflessness.^[507] Shari’ah prohibits interest-based trans­actions and discourages monopolistic, deceptive and restrictive trade practices.^[508] In sharp contrast with the capitalism, self-centric individualis­tic and competitive approach, Islamic ethical values build on humanity, compassion, tolerance, fairness and self-reliance.^[509] Accordingly, business should conform to some religious and social missions such as fair and responsible treatment of workers, honesty and leniency in business dealing, avoidance of excessive profits and hoarding practices and exploitation of one’s ignorance of the market conditions.

Bangladesh embraced Islamic banking via the establishment of the Islamic Bank (IB) in 1983 and became the first nation across Southeast Asia to introduce it.^[510] This chapter argues that the way in which IB functions in Bangladesh is fundamentally flawed and needs to be reviewed to achieve the pertinent goals of Shari’ah. Given the limited space, this work only investigates the Shari’ah compliance in devising ‘modes of financing’, especially Murabaha (discussed shortly) and the implementing mechanism of IB in Bangladesh. The following discussion begins with a brief exploration of the way in which a business should form and function in Islam.

II.