Principles of Islamic Banking and Finance

Principles of Islamic Banking and Finance? Meaning, Definition, and Example

The principles of Islamic banking and finance are based on Shariah law, which promotes ethical and moral financial practices. Islamic banking principles emphasize the prohibition of interest (riba), excessive

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uncertainty (gharar), and investments in harmful or unethical industries. Instead, Islamic finance principles encourage profit-sharing, asset-backed financing, and risk-sharing arrangements that align with fairness and social justice.

These principles guide the operation of Islamic financial institutions, ensuring they foster economic activities that promote stability, equity, and sustainable growth, in accordance with Islamic teachings.

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