An issue of Islamic banking intermediation

Banking intermediation consists classically in collecting and dispensing funds in return for an interest rate (e.g. Iqbal et al., 1998). It presents a basic financial interrelationship between wealthy and needy economic agents based on money lending. Islamic banking institutions present a renewed banking model. Depositors’ funds are managed according to PSLB mechanism (Archer et al., 2010). This mechanism is carried out via Mudarabah contract and commercialised through PSIAs (e.g. Sundararajan, 2008).