Introduction

Islamic banking, also referred Islamic finance or shariah-compliant finance, according to shariah (Islamic
law). Two fundamental principles of Islamic banking are the sharing of profit and loss, and the
prohibition of the collection and payment of interest by lenders and investors.

Modes of Islamic Banking

 Mutually agreed profit it means a sale on mutual agreed profit

 Ijara
 Ijarah wa iqtina
 Istisna’a
 Mudaraba
 Musharakah
 Bai al-Salam
Law of Shariah
Islamic banking is based on Islamic law (Shariah). The rules of fiqh muamalat came from the
Quran and the Sunnah, and other secondary sources of Islamic law.
Sources of Shariah

There are four source’s of Shariah

 The Holy Book

 The Sunnah
 Ijma’ (Consensus)
 Qiyas (Analogy).
 Is Islamic Banking Haram or Halal
It is haram, which means prohibited, as it is considered usurious and exploitative. By
contrast, Islamic banking exists to further the sociol-economic goals of an Islamic
community to allow the Halal way of banking.