Influence of religion on financial systems

Religions: Financial Practices Through Ethical Principles, Prohibitions, and Guidelines

Religions and Global Business - Religious diversity

Religions have shaped financial practices through ethical principles, prohibitions, and guidelines on the use of money, trade, and the concept of economic justice. These principles often address issues such as usury, charity, equity, and social responsibility.

Foreign Trade

1. Methods of payment. Letters of Credit
2. International Trade Finance
   1. Balance of Payments
   2. FOREX
   3. International Bonds and Guarantees

Christianity

In the Christian tradition, the Bible condemns usury (Exodus 22:25) and promotes charity and material detachment (Matthew 19:21). During the Middle Ages, the Catholic Church prohibited the charging of interest, which limited the development of modern banking systems until the Reformation and the rise of capitalism.

1. Christian Ethics
2. Sermon on the Mount

“When you lend money to any of my people, the poor person who is with you, you shall not be a profiteer to him or impose interest on him.” Exodus 22:25

“Jesus said to him, ‘If you want to be perfect, go, sell what you have and give the money to the poor, and you will have treasure in heaven. Come, follow me.’” Matthew 19:21

Islam

The Islamic financial system (based on Sharia) prohibits riba (usury or interest), gharar (excessive uncertainty), and investments in haram (forbidden) activities, such as alcohol or gambling. This gave rise to financial instruments such as mudarabah (partnership of capital and labor) and sukuk (Islamic bonds). Zakat (obligatory charity) encourages wealth redistribution.

Sulaiman Al Rajhi was a billionaire who voluntarily chose to renounce all his wealth and become a pauper by ceasing to hold any cash, real estate, or stocks he previously owned.

Islamic banks, such as Dubai Islamic Bank, operate interest-free and use risk- and reward-sharing contracts. In 2023, the global Islamic finance market exceeded $4 trillion, according to the Islamic Finance Development Report.

Malaysia is a world leader in Islamic finance, with a financial system that combines Sharia principles with the demands of a global marketplace. Islam, the majority religion in Malaysia, prohibits riba (interest), gharar (excessive uncertainty), and investments in haram activities (such as alcohol, gambling, or excessive speculation). Since the 1980s, Malaysia has developed a financial ecosystem that complies with these principles, attracting both Muslims and non-Muslims.

Cryptocurrencies have sparked debate in religious communities. Some Islamic scholars consider certain cryptocurrencies to be Sharia-compliant if they prevent excessive speculation, while other religions assess their ethical impact.

1. Five pillars of Islam
2. Fiqh (Islamic Jurisprudence)
3. Islamic Economics
4. Islamic Banking

Hinduism and Buddhism

These religions emphasize moderation and material detachment. In Hinduism, Dharma includes the responsibility to manage finances ethically.

1. Bhagavad Gita
2. Non-Violence (Ahimsa)
3. Sri Ramakrishna

In Buddhism, “right livelihood” (part of the Noble Eightfold Path) promotes economic activities that do not harm others, influencing business practices in Buddhist countries.

1. Buddhist ethics

Principles of a model of global ethics:

1. Harmony of Religions
2. Why do we need a global ethics?

Global Marketing

Academic Programs

(c) EENI Global Business School (1995-2025)
Top of this page