Interest-Free Banking
A Case Study Approach to Ethical and Inclusive Financial Systems
DOI:
https://doi.org/10.53449/xdceev97Keywords:
ethical financial systems, financial inclusion, interest-free banking, Islamic finance, sustainable financeAbstract
This study examines interest-free banking as a pathway to establishing ethical and inclusive financial systems, using a case study approach. The research investigates how Islamic finance principles, such as the prohibition of interest (riba), profit- and risk-sharing, and social responsibility, contribute to ethical conduct, financial inclusion, and sustainable economic growth. The study employs qualitative analysis through case studies of leading interest-free financial institutions, including Bank Islam Malaysia Berhad and Al-Rajhi Bank, to identify practical strategies, benefits, and challenges in implementing interest-free banking. Findings reveal that interest-free banking enhances transparency, stakeholder trust, and access to finance for underserved populations, while also fostering organisational and social sustainability. The study underscores the importance of integrating ethical financial principles into modern banking practices and provides recommendations for policymakers, practitioners, and researchers to strengthen inclusive financial systems globally.
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References
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