al-Hashar 59:7.

1. 2: THE CAPITAL MARKETS—LANDSCAPE Islamic capital markets are supposed to perform all the useful functions of conventional capital markets with justice and equitable distribution of benefits. The subjective nature of justice and equity are bound to involve social welfare judgments that could lead to unsettled debates in societies (particularly when financial dealings are involved). However, the guidance provided in the Quran and Hadith on the moral rules and behavior along with the well defined boundaries of prohibitions and compulsory obligations narrow down this debate and these are fundamental to the concept of justice and welfare in Islam. Prohibition of interest is one such boundary applicable in financial and economic matters. Allah has prohibited receiving and giving of interest3. He has also prohibited obtaining each others property by wrongful means. Therefore, an Islamic capital market is to function without interest and without malpractices tantamount to grabbing others‘ property by wrongful means. Islam also prescribes a compulsory financial obligation which is zakah: a financial/wealth obligation to be taken from the rich and given to the poor. Among the many purposes of zakah (and fay) one that is described in Quran is ‗so that the wealth does not circulate only among your rich folk.‘ 4 Therefore, if capital markets are not growing to allow for increase in wealth and economic growth or if the growth is skewed resulting in concentration of wealth, then it is an indication of some weakness which needs correction. With this view when we survey capital markets in the OIC-member countries, we find various issues needing attention. In some countries these markets are quite young while in some others they have a long history. Irrespective of their age, all these markets have found new vigor and an emerging role since 1990s. This is out of the globalization and move towards financial liberalization in the world. However, many of these markets are not growing fast enough to achieve a critical mass; and those 3 Ayat of Quran prohibiting riba are at following five set of instances in Quran. (i) al-Roum 30:39, (ii) al-Nissa‘ 4:160-162, (iii) Ale-Imran 3:130-136, (iv) al- Baqarah 2:275-277, and (v) al-Baqarah 2:278-281. 4 al-Hashar 59:7. 5