Islamic finance — Secura Investment Management Company
Islamic banking is banking activity which follows the principles of Islamic law (sharia) and its practical application through the development of Islamic economics. Hence, the most accurate name for Islamic banking is sharia-compliant finance.
Islamic finance works on the concepts of Islamic economics and islamic banking principles. The principles of Islamic banking includes
· prohibiting interest for loans,
· avoiding gambling,
· avoiding investment in prohibited industries and
· driving clear of uncertainty based transactions.
Shariah bans the acceptance any kind of interest or fees for loan amounts (called riba) in any manner. Conventional banking system works on the principle of paying interest at a pre-determined rate on deposits of money. But islamic law prohibits both both payment and receipt of interest, Muslims generally dont take interest in conventional banking system. Through islamic banking, financial inclusion can be promoted and a larger pool of savings can be brought into the economy.