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Islamic Finance has now steadily been practiced in many parts of the world, from the Gulf region, South-East Asia, Europe, and Australia. More and more Islamic financial institutions, banks and non-banks, have been set up, and along with this trend many major Western financial institutions have established their own Islamic windows.

The question now, is the growth of Islamic Finance really contributing to the creation of more ethical finance, sustainable development, and more equitable economy? Some parts of the Islamic Finance researchers have already expressed scepticism that Islamic finance in form of Islamic banking has just become a carbon copy of conventional Banking, where most of the dominant type of financing is just debt-financing in form of Murabaha and Ijarah.

By Farouk Abdullah Alwyni