Islamic finance: Difference between revisions
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In Islamic finance and banking products, profit must be derived from risk-taking and trading and all forms of interest are prohibited. | In Islamic finance and banking products, profit must be derived from commercial risk-taking and trading only, and all forms of interest are prohibited. | ||
Islamic finance models therefore operate on the basis of risk sharing, to encourage investments which may be of benefit to the community. | Islamic finance models therefore operate on the basis of risk sharing, to encourage operational investments which may be of benefit to the community. | ||
Furthermore, commercial investments should only support practices that are permitted. Thus, for example, trading in alcohol, pornography, financial services, pork, armaments, tobacco and gambling are not allowed. | |||
== See also == | ==See also == | ||
* [[Riba]] | |||
* [[Sukuk]] | * [[Sukuk]] | ||
Revision as of 15:41, 28 March 2013
In Islamic finance and banking products, profit must be derived from commercial risk-taking and trading only, and all forms of interest are prohibited.
Islamic finance models therefore operate on the basis of risk sharing, to encourage operational investments which may be of benefit to the community.
Furthermore, commercial investments should only support practices that are permitted. Thus, for example, trading in alcohol, pornography, financial services, pork, armaments, tobacco and gambling are not allowed.
