Islamic banking is a complex term which needs to be addressed carefully. We will mention here some core principles or rules to define Islamic banking. It will help you to make your concepts clear.
- Islamic banking based on asset-based financing
- Islamic banking does not give fix profit on any kind of deposits
- Another thing is Islamic banking does not lend the hard cash to any person
- The process to calculate the profit makes a transaction Halal or Haram
- Islamic banking is also based on risk sharing
- Islamic banking’s each transaction and product is governed by Shariah board.
- Islamic banking’s rules are derived from the Holy Quran, Hadith, Sunnah, Ijma and Qiyas
In the next post, we will define the basic difference between Islamic banking and conventional banking. So, subscribe us to get an update on it. It’s very important to know the basics as well all have to deal with the banking system in our life directly or indirectly.