Comment: Interest and the Modern Economy: A Reply

In the previous issue of this journal, Zaman & Zaman (2001), by criticising Hamza Alavi, imply that the implementation of the so-called Islamic Banking is in the best interest of economy and only by following this system can we be serious Muslims. According to them, this implementation could be justified on the basis of modern economic and financial theories, and also by evaluating the financial system of developed countries. This paper only briefly discusses some acute theoretical and practical shortcomings in their article and suggests that the non-interest based system is not appropriate for the Pakistani economy, at least in the conceivable future.