Rules of Islamic Finance

Islamic finance rules comply with the General principles to avoid tricked and moon which are gambling and speculation combined with uncertainty that is associated with the exploitation and oppression of uncertainty. This closes the door to the concept of interest and prevents the use of traditional instruments based on religion. Islamic financial system encourages risk-sharing and encourage entrepreneurship, discourages speculative behaviour and emphasizes the sanctity of contracts.

The pillars of the Islamic financial system is the prohibition of RIBA, literally meaning "surplus" interpreted "any unjustified increase of capital either in sales or loans." More precisely, any increase is guaranteed in return linked to the maturity and principal amount, regardless of investment performance, and will consider usury and is strictly prohibited.

Islamic finance provides various tools to satisfy users and providers of funds in a variety of ways. Basic instruments include characterization method of financing (murabaha) and profit sharing (speculative), leasing (leasing) and partnership (participation), and forward sale (bye ' peace). These instruments serve as building blocks for the development of a wide range of financial instruments that are more complex, suggesting that there is great potential for financial innovation and expansion in the Islamic financial markets

Islamic clerics have passed and "Sharia supervisory boards" for various Islamic financial institutions, a large number of decisions through collective ijtihad explain the basic principles behind Islamic movements and Shariah requirements regarding the different modes of financing, as well as some details of their practical implementation. This understanding is necessary to facilitate not only to comply with Shari ' Ah, but also helps the Islamic financial institutions to use new products in light of Islamic principles.

If you are not an Islamic financial institutions according to the teachings of Islamic law, there is nothing but its name to distinguish it from a traditional institution. One of the goals in posting this work promoting appreciation of practitioners on the importance of compliance with the provisions of Islamic law and its relevance for consumers.

The bedrock for Islamic banking Shariah law is enshrined in the Qur'an and Sunnah of the Prophet Mohamed (PBUH). Unfortunately there was an impression in certain quarters, especially in the West, and that there is no agreement among scholars on what constitutes Islamic banking actually. The late Sir Edward highlighted Georges conservative "Bank of England" this impression, in a speech to a recent Conference on "Islamic banking". And he said,

There are a number of issues we need to address. One that, as I understand it, there is no single definition of what constitutes Islamic banking. Interpretation of various institutions accept Islamic banking products in its own way. Individual boards of Shariah Adviser looks, as there is no equality body in some jurisdictions there is no definitive answer on the status of a particular product of Islamic banking. This leads to uncertainty as to what is and what is not, how ' acceptable ' to do private business, which in turn can complicate risk assessment for each of the Bank and its clients.

Instead, it will involve scholars of Islamic law it completely, and in the final agreement, in what Islamic banking is. Slight differences of opinion, if they exist, when relating to procedural matters or detail, but not substance. These differences are shared between judges in courts throughout the world.