Content Introduction

Definition

Basic Principles of Islamic Banking

Concept of Islamic banking Financial

Conventional Banking VS Islamic

Framework of Islamic Finance system

Islamic Banking

Islamic Capital Market

Takaful

Islamic Inter bank

money market

Introduction

When it emerged?Islamic finance has grown tremendously since it first emerged in the 1970's.

How many Islamic financial institutions worldwide?

There are over 300 Islamic financial institutions worldwide across 75 countries.

Definition" Islamic bank is an institution that mobilize

financial resources and invest that money in an attempt to achieve pre-determined Islamicaly - acceptable social and financial objectives. Both mobilization and investment of money should be conducted in accordance with the principles of Islamic ”Shariah(principles).

Basic Principles of Islamic Banking

Prohibition of Interest

(Riba)

Prohibition of investing in unlawful businesses

Sharing

of profit

and loss

Sharing of profit and loss

The borrower and the lender share the profits as well as

losses arising from the venture with the

finances obtained from the lender. The basic view is that the general community should benefit from

such activities.

Prohibition of investing in

unlawful businesses

Islamic Law prohibits investing in unlawful businesses such as

businesses involved in selling alcohol or pork;

or businesses that produce media for instance, gossip

columns or pornography; or

gambling industry.

Prohibition of Interest

(Riba)

#The interest deprives someone from the blessings of Allah‘ as it leads to taking away of property actually belonging to someone.

#Muslims should stay away from interest for their own welfare as it eventually invites Allah‘ fury;

Concept of Islamic banking Financial

1 .Risk sharing2 .Right and duties of individual

3 .Sanctity of contract

Example of how dose Islamic home finance work.

Islamic Banking

Based on Shariah

Offer financing

Conventional Banking

Based on conventions and

interestOffer cash loan

Mobilize resources to develop the society

Attract resources and lend them to gain maximum

profit

Review by certified auditors and shariah advisory boardPay zakat (religious obligation) and tax (government requirement)

Review solely by certified

auditors Pay tax as required by the

goverment

Islamic Banking VS Conventional Banking

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