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|a This paper discusses the debate over riba, interests and Islamic alternative for conventional banking. A unique feature of Islamic banking is its profit-and-loss sharing (PLS) paradigm, which is predominantly based on the mudarabah (profit-sharing) and musharaka (joint venture) concepts of Islamic contracting. However, Islamic banks are also criticized for not applying the principle of mudaraba in an acceptable manner, where banks are eager to take part in profit-sharing but they have little tolerance for risk. This study will analyses Jaiz bank plc, the first Islamic bank in Nigeria, as a case study of Islamic banking concept in the country. As Islamic banks in many other countries, the Jaiz Islamic Bank seem to attract a fraction of the business of financial transactions where conventional banks operate. In fact, the challenge facing Islamic banks is the diversity of opinion among the Sharia scholars, whether the particular practice or product, is Sharia compliant. The paper therefore, concludes that, by prohibition of riba, Islam wishes to establish an economic system where all forms of exploitation are eliminated. The difficulty to understand the prohibition comes from lack of appreciation of the whole complex of Islamic values. Thus, the future of Islamic banks depends not only upon investing in new products but also upon the satisfying the faith of the stakeholders. © 2018, Syarif Hidayatullah State Islamic University (UIN) Jakarta. All rights reserved.
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