Central to the Qu'ranic teaching is the promotion of justice, which leads to peace and harmony. The document discusses how Islamic finance today primarily uses debt-finance, which replicates the results of interest-financing rather than equity-finance, which promotes justice. Equity-financing utilizes profit-loss sharing between borrower and lender, sharing both profits and losses, whereas debt-financing places all the risk on one party. As such, equity-financing better fulfills the Shari'ah requirements of Islamic banking by ensuring elements of risk, work/effort, and liability that are missing from most debt-financing contracts. The current Islamic banking system is criticized as behaving similarly to conventional interest-based

1. Central to the Qu’ranic teaching is the
promotion of justice, which leads to peace
and harmony.

2. 
Kamali says that the purpose of the Prophet’s mission
was not only mercy to mankind, but to all of God’s
creatures.

3. 
He says that in order to attain these objectives, which
constitute the component parts of mercy, we must
educate the individual, establish justice, and realize
benefit (maslahah) for the people.

4. 
We must follow the Rules on Counter-Values in Islamic
Finance to create justice.
Both counter-values must be certain and may either
occur both at the time of transaction or one now and
one later, however, not both in the future.

5. 
In the case of riba, the variance in certitude between the
two counter-values, the interest on the one hand and
the opportunity cost on the other hand, constitutes the
essence of the injustice of imposing interest on loans.
The increase over the principal, the common form of
which is bank interest, is certain and its amount is
known whereas the yield resulting from investing the
loan by the creditor is not sure to materialize and if it
does, its amount is not ascertainable in advance.

6. 
In a contract, which contains gharar, such as a contract
based on speculative activities, the contract may
include a counter-value, which is not only of uncertain
value, but may not be realized at all.
In both riba and gharar, one of the counter-values is
uncertain and may never materialize and both are
therefore invalid under Shari'ah.
Riba is an extreme form of gharar.

7. 
Islamic finance today primarily uses debt-finance,
which replicates the results of Interest-Financing rather
than using equity-finance, which promotes justice.

8. 
 Asyraf Wajdi Dusuki states that (2010): ‘In contrast to debt-financing,
equity-financing utilizes a profit-loss sharing
mechanism based on the contribution of capital in the project or
investment.’
 Dusuki says that (2010): In equity- based financing, both the
borrower and lender share profits and losses as compared to
the case of debt- financing, where one party is made to take all
the risk.’
 Dusuki explains that (2010): It also promotes expansion of the
economy including the development of small- to -medium
sized businesses in addition to large enterprises and promotes
stability in the economy and society at large.’

9. 
Equity- financing fulfills the essence of Shari’ah requirements
in Islamic banking and finance as it fulfills the counter- value
(iwadh).
For a contract to be valid, there should be Iwadh or counter-value
present. Three elements of iwadh that should exist are
risk (ghorm), work and effort (ikhtiar) and liability (daman).
In the majority of debt- financing contracts, one or more of
these elements of Iwadh are missing. If there is no risk, effort
and liability, then such a contract cannot be considered to
contain any element of justice.'

10. 
Bank as a Finance House Rather than Loan House

11. The Islamic Banking and Finance Industry, which exists today is a sham.
There is nothing moral about it. It does not encompass any of the ideals of the
Islamic moral economy and has become just another branch of the
conventional banking system, imitating its products and services and dishing
out interest in disguised forms.

It is debt-based and produces similar outcomes as interest-based financing.
Shari’ah is not the base and the Tawhid (One-God) Framework is not being
utilized.
The modes of finance are not musharakah and mudharabah and thus a
participatory superstructure in society does not result.
The debt finance base of Islamic finance and banking creates the same debt-trap
superstructure encapsulating the neo-classical individual in his own
misery, which exists in the conventional economy.
The bank remains a loan house rather than finance house to the detriment of
the well-being of humanity.