Islamic banking, Islamic finance, or Sharia-compliant finance is banking or financing activity that complies with Sharia and its practical application through the development of Islamic economics. Some of the modes of Islamic finance include mudarabah, wadiah (safekeeping), musharaka, murabahah (cost-plus), and ijarah (leasing).
Sukuk is the Arabic name for financial certificates, also commonly referred to as "sharia compliant" bonds. Sukuk are defined by the AAOIFI as "securities of equal denomination representing individual ownership interests in a portfolio of eligible existing or future assets." The Fiqh academy of the OIC legitimized the use of sukuk in February 1988.
Takaful is a co-operative system of reimbursement or repayment in case of loss, organized as an Islamic or sharia-compliant alternative to conventional insurance, which contains riba (usury) and gharar.
BankIslami Pakistan Limited is a Pakistani Islamic bank based in Karachi. It has 400+ branches in 150 cities in Pakistan.
The Dubai Islamic Bank (DIB) is an Islamic bank in Dubai, established in 1975 by Saeed Bin Ahmed Lootah. It is the first Islamic bank in the world to have incorporated the principles of Islam in all its practices and is the largest Islamic bank in the United Arab Emirates.
Murabaḥah, murabaḥa, or murâbaḥah was originally a term of fiqh for a sales contract where the buyer and seller agree on the markup (profit) or "cost-plus" price for the item(s) being sold. In recent decades it has become a term for a very common form of Islamic financing, where the price is marked up in exchange for allowing the buyer to pay over time—for example with monthly payments. Murabaha financing is similar to a rent-to-own arrangement in the non-Muslim world, with the intermediary retaining ownership of the item being sold until the loan is paid in full. There are also Islamic investment funds and sukuk that use murabahah contracts.
Dubai Banking Group is the global shari'a compliant financial investor of Dubai Group with assets valued at over USD 10 billion. The group was established in 2007 when Dubai Islamic Investment Group, founded in 2004, and Dubai Bank, founded in 2002, consolidated their activities to form Dubai Banking Group.
CRDB Bank Plc is a commercial bank in Tanzania. It is licensed by the Bank of Tanzania, the central bank and national banking regulator. As of September 2022, CRDB Bank was the largest commercial bank in Tanzania.
NewHorizon, a trade publication, is a quarterly English-language magazine owned by the Institution of Islamic Banking and Insurance (IIBI) and published in the United Kingdom. From December 2012 it went on online.
A Sharia Board certifies Islamic financial products as being Sharia-compliant. Because compliance with Sharia law is the underlying reason for the existence of Islamic finance, Islamic banks should establish a Sharia Supervisory Board (SSB) to advise them on whether their products comply, and to ensure that their operations and activities comply with Sharia principles. There are also national Sharia boards in many Muslim majority countries that regulate Islamic financial institutions nationwide.
Islamic finance products, services and contracts are financial products and services and related contracts that conform with Sharia. Islamic banking and finance has its own products and services that differ from conventional banking. These include Mudharabah, Wadiah (safekeeping), Musharakah, Murabahah, Ijar (leasing), Hawala, Takaful, and Sukuk.
The Arab Chamber of Commerce and Industry (ARABCCI) or (ArabCham) in Hong Kong was established in 2006 to promote commercial ties between Hong Kong and Greater China with the Arab world. The Arab Chamber of Commerce is a not for profit organisation, The President is Edwin Hitti.
The economic policies proposed under the banner of "Islamisation" in Pakistan include executive decrees on Zakāt (poor-due), Ushr (tithe), judicial changes that helped to halt land redistribution to the poor, and perhaps most importantly, elimination of riba. Perhaps the foremost exponent of Islamisation among Pakistan's rulers—General Muhammad Zia-ul-Haq—advanced a programme in 1978 to bring Pakistan law in line with the principles of Sharia law.
Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) is a Bahrain-based not-for-profit organization that was established to maintain and promote Shariah standards for Islamic financial institutions, participants and the overall industry. The commission also organizes a number of professional development programs in their effort to improve the industry.
Salaam Somali Bank, often abbreviated to SSB, is a Somali commercial bank. It is headquartered in Mogadishu, Somalia. SSB is one of the largest privately owned banks in the country.
Rusni Hassan currently is a Professor and Dean at IIUM Institute of Islamic Banking and Finance, International Islamic University Malaysia. Previously, she was a Deputy Dean at the Institute, a Coordinator for Research and Publication and Course Coordinator for Islamic Law of Transactions and Islamic Banking and Takaful. She was a Research Committee for Review of Islamic Banking Laws, Central Bank of Malaysia and an examiner for Financial Planner Association of Malaysia. Presently she is the examiner for the Chartered Institute of Management Accountants. She was a member of Shariah Advisory Council Bank Negara Malaysia and Shariah Advisor for Association of Islamic Banking Institutions Malaysia. She also served as Secretary for the Association of Shariah Advisors in Islamic Finance Malaysia for 8 years starting from 2012 until 2020.
Octaware Technologies is a software development company based in Mumbai, India. It was incorporated in 2005. It is India's first company claiming sharia compliance that has been listed on the Bombay Stock Exchange, the listing happened on 3 April, 2017. It received approval for listing in early 2016. The company operates domestically and internationally with subsidiaries registered in United Arab Emirates, United States, and India. It has marketing offices in Zimbabwe, Nigeria, Saudi Arabia and Qatar.
Gharar literally means uncertainty, hazard, chance or risk. It is a negative element in mu'amalatfiqh, like riba (usury) and maysir (gambling). One Islamic dictionary describes it as "the sale of what is not present" — such as fish not yet caught, crops not yet harvested. Similarly, author Muhammad Ayub says that "in the legal terminology of jurists", gharar is "the sale of a thing which is not present at hand, or the sale of a thing whose aqibah (consequence) is not known, or a sale involving hazard in which one does not know whether it will come to be or not".
Sharia and securities trading is the impact of conventional financial markets activity for those following the islamic religion and particularly sharia law. Sharia practices ban riba and involvement in haram. It also forbids gambling (maisir) and excessive risk. This, however has not stopped some in Islamic finance industry from using some of these instruments and activities, but their permissibility is a subject of "heated debate" within the religion.
Challenges in Islamic finance are the difficulties in providing modern finance services without violation of sharia. The industry of Islamic banking and finance has developed around avoiding riba by avoiding interest.
