Should we burden Islamic banks with social responsibility?
Despite all the wishes and strong preferences of many advocates of Islamic banking and finance, Islamic banks are primarily commercial entities aiming to profit from their activities. Any social responsibility mandated for them will put them at a disadvantage vis-à-vis their conventional counterparts. For example, requiring Islamic banks to be more compassionate than conventional banks, in the wake of default on part of their customers will simply mean killing the business of Islamic banks. What is required at this stage is to develop new Islamic financial institutions that should have explicit focus on social responsibility. Islamic banks must continue to operate as they have been developed so far.