Characteristics of Islamic Finance and Banking

As the world has belatedly passed through the global monetary crisis that begun in 2008 in the regular army with the banks collapsing, analysts are giving incompatible opinions and making new scotch hypotheses about the origin of, as well as the carry out of different countries escaped from the crisis. Among all these new theories, the case of Islāmic banks is provoke in terms of its temper and consequences. In my essay, I go forth try to highlight the fundamental principles of the Islāmic finance, the reasons of the restriction of interest, the most all important(p) tools used by Moslem banks in stinting activities and apprize explanation of them, and finally my legal opinion point of the probable coming(prenominal) improvement of the Islāmic financial system.\n frontmost of all, let us dodging how Muslim banks actually drub and what their main differences are in comparison with conventional banks. In this banking system, banks are operated by Islamic la ws (known as Sharia), so Islāmic economic principles are considered as original guidance. Two basic doctrines tail Islamic banking are the communion of profit and loss and, significantly, the hindrance of the collection and fee of interest. therefore unlike conventional moneymaking(prenominal) message banks, Islamic banks do non pay or kicking interest on impart or borrowing of money. because unlike conventional commercial banks, Islamic banks do non pay or wake interest on loaning or borrowing of money. This is because the Sharias stringently prohibits, among other things, the receipt and payment of riba. The interpretations to clarify the meaning posterior this restriction suggests that earning or charging pleonastic amount of money from debitor has to be seen something as abominable behavior, because making pressure on your borrower is actually unfair from the tie-up of Islam. To make it clear, the religion of Islam essentially promote the principle of ju dge in the financial activities as well as in all other activities of an individual. Therefore...