Interest is a way used to take unlawful money from people. If you borrowed $100 from someone, you would want to owe the same amount, not a penny more. you would not want to owe $110, unless you yourself reward him that amount. Islamic Banking is the way to go, as they are the only systems to survive the economic crises.
Banks such as Citi and HSBC have recently begun applying some of the concepts and are being among the successful in comparison with those who did not apply. something must be right in this system that is encouraging the banks to apply Islamic Banking. In Islamic Banking, you will not be cheated by the financing charges you whether it is $50 or even a penny. You will be charged the same amount of money you borrowed. Interest makes greed and encourages the taking of unlawful money from the people like you.
If by for any reason you make a late payment, late fees are prohibited. what can be done is increase the customers minimum payment in a way it does not exceed that amount the person owes in total. If payed on time the next time, the bank would give that person a discount, or lower the minimum payment as a reward.
Take mortgage for example, instead of loaning the buyer to purchase an item, the bank might buy the item from the seller and resell it for a profit and does not charge late penalties, as this is also usury gains. Many banks have taken heavy blows due to their unlawful ways of dealing with people and their money, while those who applied Islamic Banking have taken a limited blow.
Comments (3)
Banks should be able to compete in the free market for a price for their services. If it makes business sense to lend for a fee of $0, nothing in the law prevents a lender from doing so now. And if this model becomes popular and sustainable, banks that do charge interest will eventually go out of business, leaving only lenders with $0 interest loans, the goal of this proposal. Thus, no government action is necessary to reap the proposed benefits.
However, if this business model is not sustainable, government legislation requiring $0 interest would cripple the lending market far beyond the problems we see today.
Thus, this proposal has a risk of significant harm with no perceptible benefit.
Do not be discouraged by the negative votes.
So many people are ignorant of the fact that banks are lending money they do not have and charging interest they do not deserve (including 29.9% interest). This criminal misbehavior is authorized by Congress.
I stand with Ron Paul on ending the Federal Reserve (which is neither Federal nor a Reserve) and I believe that we need to return to public ownership of corporations and public oversight of how public assets are given away. Deer Hunting with Jesus opened my eyes to the crimes of local planning commissions that give tax breaks, public land, and public services to corporations in return for personal commissions that deprive the local educational system of funding.
The spirit of your recommendation is righteous--increased public understanding and acceptance will come with time.
This has the potential to restore the world to decency. However, it will get automatically shot down because of the negative implications of the word "Islamic".
Islamic banking is taken directly from the Old Testament injunction about usury. Central bank usury is behind almost everything going wrong in the world from wars to depressions.
For an alternative, I suggest you google "common good finance"