Business and commerce are two terms that have the same meaning while retaining different origins; American and British .”Business or commerce is an activity in which you deal with money; buying and selling to earn profit”. This era revolves around banking and likewise, banking has gotten involved in every sector. For example; school fees are paid in banks, utility bills are paid in banks, every other money transaction (both domestic and international) are handled by the banks. Banks hold such an important position in determining the safety and security of our money.

The simple definition of a bank is “Any institution that deals with money”. Yet it is not as simple of an explanation.
Credit unions, factor companies, commercial finance companies, sales finance companies, consumer finance companies; these organizations are responsible for dealing with money but they aren’t called banks. Instead, they have their own particular names. On this basis in my opinion, the definition written in books is unclear. The purpose of banking is to monitor our current savings or to invest them. To the average user, it may appear as if credit creation is good or feasible but actually it is quite harmful for the economy of a country. It is a fact that nearly 18% of world money is paper money while the remaining 82% money is plastic, meaning it does not exist in the form of physical cash.

Banking also goes against the Islamic Laws. From the Islamic point of view, taking interest is considered to be Haram as the money is not earned by doing hard work, rather the other party earns money without even breaking a sweat. A bank offers different types of loans; home loans, car loans, business loans, etc. Even basic necessitates like appliances are available on installments. If we take any type of loan, a down payment has to be made and then the installments begin. If the monthly installments are not paid on time, a penalty is charged on the next installment. If it happens more than one time, the bank takes something as liability. An example of how installments work is like if you plan on buying a motor bike on installments and the original price of bike is RS 50,000. Depending on the duration of the lease you are required to pay a down payment.
The difference is in front of you and increasing in credit creates great inflation and results in devaluation of currency and the situation becomes increasingly unfavorable for the middle and lower class. So the creation of credit is not necessary . Being muslim and leaders of muslim country our politicians have to do something. They have to introduce a system free from interest.

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