7 - Islamic Banking and Finance

Summary

In discussing Islamic banking and finance (IBF), I first provide a brief overview of its development in Gulf monarchies, before turning to an investigation of particularities of its form and substance. I address a set of issues related to, on the one hand, the adoption, governance and regulation of IBF and on the other hand, the conformity of its practice with its alleged purposes. My aim is to uncover the actual goals of IBF, that has become prominent in the Gulf (and in the global economy) in recent decades. The analysis shows that IBF is a means for regimes to both appease their restive populations and respond positively to the material interests of key segments of society. Thus, ruling priorities related to enrichment and social management cohere; these are the principal purposes, even though ruling elites cloak their intentions in religiosity and ethical commitments. Like the other institutionalized practices discussed in this book, IBF represents the conjoined instrumentalization of (oil) wealth and Islamic doctrine for the sake of social control, and beyond that, the ongoing political domination and material enrichment of the royal family.