Islamic banking
Islamic banking is a financial system that operates in accordance with Islamic law, or Sharia. It prohibits interest (riba) and encourages profit-sharing and ethical investments. Instead of earning interest on loans, Islamic banks provide financing through profit-sharing arrangements, asset leasing, or partnerships. Transactions must also avoid excessive risk (gharar) and invest in socially responsible projects. This system emphasizes fairness, transparency, and risk sharing, aiming to promote economic stability and social justice while aligning financial practices with Islamic values.
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Islamic banking is a financial system that operates according to Islamic law (Sharia). It prohibits earning interest (riba) and investing in businesses considered haram (forbidden), like alcohol or gambling. Instead, Islamic banks engage in profit-sharing, leasing, and partnership models. They invest in tangible assets and projects, sharing profits and risks with customers. This ethical approach promotes transparency and equity, aiming to foster economic stability and social justice. Islamic banks offer various products like Murabaha (cost-plus financing) and Ijara (leasing), aligning financial practices with Islamic values while serving the needs of their clients.