Interest free banking
Interest Free Banking - Its advantages and disadvantages; and recommendations.
Interest free banking is something outrageous, if viewed at first instance. Why? Because the very term of interest free banking signifies its true nature and function – banking that dispenses with any usury or interest, leaving the debtor at ease and the creditor with no flow of wealth.
Zero. None. Free. Nil. No interest whatsoever.
The normal workingmen may see this as promising. However, is it an absolute white area imbued with promises and optimism? This, of course, is a clear cut no. There is also a part of the spectrum that may cry foul from the mere hearing of interest free banking and these may consist of banks, lending companies, corporations, industrialists, among others. Hence, the dichotomy of reactions regarding interest free banking sparks some interest - what are its advantages and disadvantages? It is therefore respectfully submitted that the advantages and disadvantages (in a nutshell) of this type of banking are, to wit:
The advantages of interest free banking would of course revolve around the monetary benefit it can give over a normal person who seeks to borrow loans. A debtor is usually motivated to borrow because of dire need. Hence, consistent with public policy, interest free banking would cause no further harm to a person who may be in financial straits. The second advantage is the fostering of morality. Albeit finance is not closely intertwined with the nitty-gritty of morality, the layman can take this as something analogous to Islam banking – which fosters interest free banking – and despite that sees fortune with proper regulation. Islam’s morality made sure that banking is consistent to its virtues, causing most Islam to be happy. So if they can be comfortable with that, there is no reason why non-Islam people would not.
Third advantage is trust. An interest free banking would have little to no window for corruption since there is less profit to speak
Interest free banking is something outrageous, if viewed at first instance. Why? Because the very term of interest free banking signifies its true nature and function – banking that dispenses with any usury or interest, leaving the debtor at ease and the creditor with no flow of wealth.
Zero. None. Free. Nil. No interest whatsoever.
The normal workingmen may see this as promising. However, is it an absolute white area imbued with promises and optimism? This, of course, is a clear cut no. There is also a part of the spectrum that may cry foul from the mere hearing of interest free banking and these may consist of banks, lending companies, corporations, industrialists, among others. Hence, the dichotomy of reactions regarding interest free banking sparks some interest - what are its advantages and disadvantages? It is therefore respectfully submitted that the advantages and disadvantages (in a nutshell) of this type of banking are, to wit:
The advantages of interest free banking would of course revolve around the monetary benefit it can give over a normal person who seeks to borrow loans. A debtor is usually motivated to borrow because of dire need. Hence, consistent with public policy, interest free banking would cause no further harm to a person who may be in financial straits. The second advantage is the fostering of morality. Albeit finance is not closely intertwined with the nitty-gritty of morality, the layman can take this as something analogous to Islam banking – which fosters interest free banking – and despite that sees fortune with proper regulation. Islam’s morality made sure that banking is consistent to its virtues, causing most Islam to be happy. So if they can be comfortable with that, there is no reason why non-Islam people would not.
Third advantage is trust. An interest free banking would have little to no window for corruption since there is less profit to speak