Dr. Ahmad Elnaggar is the economist who pioneered the formation of the Islamic Banking

Islamic banking

Islamic banking is banking or banking activity that is consistent with the principles of Islamic law and its practical application through the development of Islamic economics. Sharia prohibits the fixed or floating payment or acceptance of specific interest or fees for loans of money...

 system by setting up the Mit Ghamr Savings Bank in Egypt

Egypt

Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...

 in 1963.

This took the form of a savings bank

Savings bank

A savings bank is a financial institution whose primary purpose is accepting savings deposits. It may also perform some other functions.In Europe, savings banks originated in the 19th or sometimes even the 18th century. Their original objective was to provide easily accessible savings products to...

 based on profit-sharing in the Egyptian town of Mit Ghamr

Mit Ghamr

Mit Ghamr is an Egyptian center producing aluminium accounting for more than 70% of Egypt's total production, especially aluminum utensils...

. The experiment lasted until 1967, by which time there were nine such banks in the country. These banks, which neither charged nor paid interest

Interest

Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....

 (or Riba

Riba

Riba means one of the senses of "usury" . Riba is forbidden in Islamic economic jurisprudence fiqh and considered as a major sin...

 in Islamic terminology), invested mostly by engaging in trade and industry, directly or in partnership with others, and shared the profits with their depositors (Siddiqi 1988). Thus they functioned in essence as saving-investment institutions rather than as commercial banks. Subsequently, The Nasir Social Bank, established in Egypt in 1971, was declared an interest-free commercial bank, although its charter made no reference to Islam

Islam

Islam . The most common are and .   : Arabic pronunciation varies regionally. The first vowel ranges from ~~. The second vowel ranges from ~~~...

 or Sharia

Sharia

Sharia law, is the moral code and religious law of Islam. Sharia is derived from two primary sources of Islamic law: the precepts set forth in the Quran, and the example set by the Islamic prophet Muhammad in the Sunnah. Fiqh jurisprudence interprets and extends the application of sharia to...

.

Elnaggar's experiment with Islamic Banking was initially undertaken under cover, without projecting an Islamic image, for fear of being seen as a manifestation of Islamic fundamentalism

Islamic fundamentalism

Islamic fundamentalism is a term used to describe religious ideologies seen as advocating a return to the "fundamentals" of Islam: the Quran and the Sunnah. Definitions of the term vary. According to Christine L...

which was anathema to the political regime at the time.