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An economic system is a system that involves the
production, distribution and consumption of goods
and services between the entities in a society
particular to solve the economic problems.

ECONOMIC SYSTEM

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TYPES OF ECONOMIC SYSTEMS

Ø Market system
Ø Command system
Ø Islamic system

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ISLAMIC ECONOMIC SYSTEM
 A system that involves the production,
distribution and consumption of goods and
services between the entities in a society
under the Islam laws to solve the economic
problems.


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 OBJECTIVES
 Achievement of Falah
 Material well-being of the citizens of an
Islamic state.
 Establishment of Social Justice
 To establish socio-economic justice
among all the members of the nation


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 Achievement of Moral and Material
Development
 Material as well as moral development of
the Muslim community
 Circulation of Wealth
 Discourage hoarding and ensure the
constant circulation of wealth


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 Elimination of Exploitation
 Elimination of exploitation of one human by
another

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 TAXATION
 Zakat
 Tax which is collected from the rich and
distributed among poor
 Ushar
 Tax on agricultural produce
 Kharaj
 An agricultural tax received from non-
Muslim


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 Jizyah
 A tax received from non-Muslim
 Khumas
 the share of the Islamic state which was
collected from:
 Spoils of war
 Mineral wealth
 Treasure-Trove
 Extracted from the sea

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Islamic Banking

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 The banking system based upon the
principles of Islamic law and its practical
application through islamic economics

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 FEATURES:
 Profit& loss sharing
 No fixed interest (Riba)
 Investment in halal business

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HISTORY OF ISLAMIC BANKING

 Started from Egypt in 1963 by Ahmad

Elnagger
 1975 – Islamic Development Bank
 Islamic banking growing at the rate of 10-
15%
 Size about $200-$800 billion.
 250 islamic financial institution in 50-75
countries.

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ISLAMIC BANKING IN PAKISTAN

 Startedin 1977-78
 In 1985 all commercial banks start Islamic
banking
 1991 declared as unislamic
 2000 SBP declared to start islamic banking.
 2002 issued license to Meezan bank.

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MODES OF BANKING
AND FINANCE

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PARTICIPATORY
MODES
 Mudaraba
 Musharaka
 Diminishing Musharaka

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TRADING MODES
 Ijara
 Murabaha
 Musawamah
 Salam
 Istisna
 Tawaruq (Exceptional)

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1.Economics is a Science of wealth (to teach selfishness). K.K Dewett
2.Economic is made to study “wealth” rather than “welfare”.
3.Whatever the economics is concerned with it is not concerned with:
EStudy of relation of real goods (physical science) and wealth (monetary
science)
EStudy of relation of material welfare (of individual) and general welfare (of
humanity).
EStudy of relation of “short term needs: and “long-term needs”

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 X X X
Short-term approach

Y Y
Long-term approach
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IS IT BENEFICIAL…???

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EXAMPLE:
 disposable Amount/ Nisab Rs. 100,000


In Current system:

Ø deposit in bank
Ø Interest Rate 13%


 At year end
Ø Amount will be Rs. 113,000

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IN ISLAMIC ECONOMY:
Ø No interest


 At year end


Ø Amount will be Rs. 100,000

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 IS THE ISLAMIC
ECONOMIC SYSTEM
APPLICABLE.?

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 Change the whole system
 Change people’s attitude

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THANKS

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