300+ TOP Islamic Banking MCQs and Answers Quiz Exam 2024

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Islamic Banking MCQs and Answers Quiz Exam
300+ TOP Islamic Banking MCQs

and Answers Quiz Exam
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Islamic Banking Multiple Choice Questions |

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Islamic banking mcqs
1. Islamic Finance is strongly _____ oriented.

https://engineeringinterviewquestions.com/islamic-banking-mcqs-and-answers/ 1/19
(A) profit
(B) money
(C) equity
(D) interest
2. In Islamic Finance, the owner of capital _____ the

profits made by the entrepreneur.
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(A) can share

(B) cannot share
(C) receive
(D) can never take
3. The Islamic financial system regards “the time value of

money” as
(A) interest
(B) rent
(C) loss
(D) profit
4. The Islamic financial system regards “the monetary

value of time” as
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(A) interest
(B) profit

(C) loss
(D) rent
5. In Sharia law and Islamic financing, “making money

from money” is
(A) permitted
(B) not permitted
(C) permitted in certain cases
(D) permitted for Islamic banks only
6. The Islamic financial system works on the basis of
(A) sharing return

(B) sharing risk
(C) sharing risk and return
(D) predetermined risk and return
7. In Islamic banking and finance, any deal must have an

underlying _____ backing the deal.
(A) asset
(B) profit
(C) risk
(D) currency
8. A “sukuk” is basically a Shariah-compliant
(A) loan
(B) profit
(C) bank cheque
(D) investment certificate
9. “Takaful” is basically a Shariah-compliant
(A) loan
(B) insurance
(C) investment
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(D) ownership

10. Which from the following is/are NOT permitted under

Islamic Financial Principles?
I. Interest
II. Short selling
III. Non-asset backed derivatives
(A) I only
(B) I and II
(C) I and III
(D) I, II and III
11. What is asset side financing out of these means
a. large enterprise financing

b. import financing
c. Letter of credit with margin (for musharika)
d. all of answers are correct
Answer: b
12. Giving share of investor to customer on lease is the
a. basis of musharika
b. basis of diminishing musharika
c. basis of ijarah
d. basis of hibah
Answer: b
13. An agreement in which advance fee is made for

commodities to be delivered afterwards on is
a. murabaha
b. baisalam
c. ijarah
d. b& c
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Answer: d
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14. Word Musharika is originated from Arabic word

Sharikah meaning
a. friends
b. ijarah
c. lessor
d. partnership
Answer: d
15. A most ordinary kind of Shirkat-ul-Aqd where equality

in capital, management or liability might be identical in
one case but not in all respect meaning either profit is
equal but not labour or vice versa is
a. shirkat-ul-aqd
b. shirkat-ul-ainan
c. shirkat-ul-dain
d. shirkat-ul-milk
Answer: b
16. Working capital financing in Musharika is
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
a. liability side financing

b. asset side financing
c. assets
d. liabilities
Answer: b
17. Where everyone partner contribute some capital into a

commercial venture is
a. partnership in capital
b. shirkat-ul-amwal
c. a & b
d. shirkat-ul-abdan
Answer: c
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18. Investments given by all partners/shareholders
known to as

a. partners
b. ijarah
c. murabah
d. takaful
Answer: a
19. Mutually or equally using an asset by taking twists

under conditions where partners or joint vendors are on
superior stipulations is
a. musharikaintifa
b. musharika
c. ijarah
d. hibah
Answer: a
20. Sharikah is chief term than
a. ijarah
b. murabaha
c. musharika
d. shirkat-ul-ainan
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
Answer: c
21. The term Riba literally means
a. Any speculation
b. Any excess
c. Any profit
d. Any wealth
Answer: b
22. The term Hawalah refers to a contract of
a. Profit loss sharing

b. Repayment of loans
c. Assignment of debt
d. Profit sharing
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Answer: c
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23. Deposits placed with banks practically take the form

of
a. Donations from depositors to the bank

b. A sale contracts with the bank
c. Authority to the bank to lent monies
d. Loans from depositors to the bank
Answer: d
24. The Islamic financial system is founded on
a. Cancellation, revocation of debt

b. Absolute prohibition of the payment or receipt of any
predetermined, guaranteed rate of return
c. Imposition of an obligatory tax on earnings
d. Land and property tax levied by the state
Answer: b
25. Ijarah literally means
a. Price of goods
b. Type of transaction
c. Risk or loss or fraud
d. To give something on rent
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Answer: d
26. The term Waqf refers to


a. Bill of exchange
b. What is due to the state treasury
c. Promissory note
d. Charitable foundation or trust
Answer: d
27. The Arabic term Kafil means
a. A person taking possession of goods

b. A person taking delivery of goods
c. A person providing surety
d. A person withholding delivery of goods
Answer: c
28.What does the abbreviation IFI stand for in Islamic

banking?
a. Islamic Forum for Intermediation

b. Islamic Finance Industry
c. Islamic Financial Instrument
d. Islamic Financial Institution
Answer: d
29. Islamic corporate governance promotes
a. Currency reserves
b. Ethical and moral behaviour
c. Debt whose repayment is postponed
d. Specialised large-scale commercial institutions
Answer: b
30. The term Dhaman in Islamic commercial law refers to
a. Islamic banking operations

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b. Several types of Islamic financial transactions
c. The taking on of a liability or responsibility of another person
d. Commercial activities of Islamic banks 
Answer: c
31. Sukuk is Arabic name stand for
a. financial liabilities
b. financial certificates
c. financial assets
d. financial loans
Answer: b
32. A type of partnership where one party offer funds

while other gives expertise and management is
a. murabaha
b. musharika
c. ijarah
d. mudarabah
Answer: d
33. Word Musharika is originated from the
a. latin word
b. arabic word
c. persian word
d. french word
Answer: b
34. Which is liability side financing out of these means
a. large enterprise financing

b. t-bills and federal investment bonds / debenture
c. inter- bank lending / borrowing
d. b & c
Answer: d
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35. Expression Finance Certificates & Certificate of
Investment in Musharika is 
a. liability side financing

b. liability
c. assets
d. assets side financing
Answer: d
36. Factually it means a credit sale is
a. baimuajjal
b. mudarabah
c. ijarah
d. murabaha
Answer: a
37. An investor and his customer contribute either in

shared possession of an assets or equipment, or in a
combined commercial venture is
a. diminishing musharika
b. musharika
c. ijarah
d. salam
Answer: a
38. The term Shirrkah – al- aqd in Islamic commercial

law refers to a partnership or joint venture formed by…
a. Payment of a fixed price

b. Safe keeping
c. Contract
d. Ruling by the shariah scholars
Answer: c
39. The Islamic financial system prohibits transactions

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featuring

a. Extreme uncertainties resulting from speculation and gambling

b. Sharing of profit and risk of loss
c. Partnership agreements
d. Trading for profit
Answer: a
40. Are Islamic banking products for Muslims only
a. For Muslims and and those non-Muslims who are allowed by

Sharri’ah scholars.
b. No
c. Yes
d. For muslims and those who convert to muslims
Answer: b
41. Wakalah is used by Islamic banks mostly for
a. Consumer loans
b. Sales through documents
c. Fund management
d. Guaranteeing payments
Answer: c
42. The term Arbun refers to
a. Down payment
b. Loan payment
c. Savings.
d. Deposit with a bank.
Answer: a
43. Banking may broadly be described as the business of

providing
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a. Investment services
b. Financial services

c. Loans and mortgages

d. Foreign exchange services
Answer: b
44. Which of the following is a type of investing

instrument?
a. Musharakah
b. Tawarruq
c. Kafalah
d. Qimar
Answer: a
45.The term Aqd in Islamic commercial law refers to
a. Ownership of goods
b. A contract
c. Non-permissible
d. Permissible
Answer: b
46. Takaful, a form of Islamic insurance, refer to a

scheme for
a. Struggling for livelihood

b. Perfect ownership
c. Equal distribution of wealth
d. Mutual assistance and shared responsibility
Answer: d
47. The Arabic term Ayn refers to
a. Time of possession
b. Fixation of cost
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c. A tangible (physical asset)
d. Conditions

Answer: c
48. What does the abbreviation IFSB stands for
a. Islamic Finance Supervision and Banking

b. Islamic Financial Supervisory Board
c. Islamic Financial Services Board
d. Islamic Financial Services Bank
Answer: c
49. Shariah provides a network of ethical and moral rules

of behaviour for
a. Potential buyers
b. Travelling merchants
c. All participants in market
d. Muslims only
Answer: c
50. Religious supervisory board of Islamic banks plays an

important role in
a. Determination of the ratio of profit-sharing according to Islamic

principles.
b. Raising capital for the banks according to Islamic principles.
c. Introduction of new product and services that comply with
Islamic princples.
d. Mobilisation of funds according to Islamic principles
Answer: c
51. Tameen is another name for
a. Takaful (Islamic insurance)

b. Faqir (a poor person)
c. Shirkah (partnership)
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d. Tatfif (fraud)
Answer: a 
52. Amanah in Islamic banking refers to
a. A deposit held in trust which creates various fiduciary duties.

b. An expert who is consulted for advice on Islamic law.
c. An interest-free loan.
d. A loan that does not have to be repaid
Answer: a
3. The Arabic term Haq means
a. Legal rights
b. Credit proposal
c. Taking full responsibility
d. Kind of sale
Answer: a
54. The Shari’ah is set of rules or law governing
a. Spending on objects which have been explicitly prohibited.

b. The quantity and quality of a good for sale
c. Economic, social, political and cultural aspects of Islam societies.
d. Principles of partnership
Answer: c
55. The Arabic term Qimah implies
a. Duties of a man to god

b. A particular situation
c. Sharing certain risk
d. Sale of the real value of goods
Answer: d
56. The term Hiba refers to a contract of

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a. Money payment
b. Gift

c. Investment
d. deposit
Answer: b
57. Under a Salam contract goods are
a. Not delivered until payment is made

b. Taxed before delivery
c. Purchased for delivery in future
d. Delivered for payment later
Answer: c
58. The term Kafalah in islamic commercial law refers to
a. Finance
b. Guarantee
c. Purchase
d. Bargain
Answer: b
59. Islamic financial system seeks to
a. Encourage wasteful expenditure

b. Administer land revenue
c. Postpone debt repayment
d. Enhance equality and fairness in financial dealings for the good
of society as whole
Answer: d
60.Maqsid, an Islamic term, refers to
a. Land and possessions

b. Objectives of Shari’ah.
c. Terms of a valid sale contract
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d. A contract of sale which is binding
Answer: b 
Islamic Banking Objective Questions with Answers Pdf Download

Online Quiz Test
ONE THOUGHT ON “300+ TOP ISLAMIC BANKING MCQS AND

ANSWERS QUIZ EXAM”
Muhammad Shoaib Malick

FEBRUARY 2, 2024 AT 12:00 AM
Great Work for learner of Islamic banking. appreciate if

you develop some advance level questionnaire for exam
on Islamic banking
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20/02/2024, 06:10 300+ TOP Islamic Banking MCQs and Answers Quiz Exam 2024

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Home » Islamic Banking Objective Questions » 300+ TOP

300+ TOP Islamic Banking MCQs

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Islamic Banking Multiple Choice Questions |

2. In Islamic Finance, the owner of capital _____ the

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Multiple Choice Questions and Answers

Mcq Questions and Answers

Multiple Choice Questions

Multiple Choice Question

(A) can share

3. The Islamic financial system regards “the time value of

4. The Islamic financial system regards “the monetary

5. In Sharia law and Islamic financing, “making money

6. The Islamic financial system works on the basis of

(A) sharing return

7. In Islamic banking and finance, any deal must have an

8. A “sukuk” is basically a Shariah-compliant

9. “Takaful” is basically a Shariah-compliant

10. Which from the following is/are NOT permitted under

11. What is asset side financing out of these means

a. large enterprise financing

12. Giving share of investor to customer on lease is the

13. An agreement in which advance fee is made for

14. Word Musharika is originated from Arabic word

15. A most ordinary kind of Shirkat-ul-Aqd where equality

16. Working capital financing in Musharika is

a. liability side financing

17. Where everyone partner contribute some capital into a

19. Mutually or equally using an asset by taking twists

20. Sharikah is chief term than

21. The term Riba literally means

22. The term Hawalah refers to a contract of

a. Profit loss sharing

23. Deposits placed with banks practically take the form

a. Donations from depositors to the bank

24. The Islamic financial system is founded on

a. Cancellation, revocation of debt

25. Ijarah literally means

26. The term Waqf refers to

27. The Arabic term Kafil means

a. A person taking possession of goods

28.What does the abbreviation IFI stand for in Islamic

a. Islamic Forum for Intermediation

29. Islamic corporate governance promotes

30. The term Dhaman in Islamic commercial law refers to

a. Islamic banking operations

31. Sukuk is Arabic name stand for

32. A type of partnership where one party offer funds

33. Word Musharika is originated from the

34. Which is liability side financing out of these means

a. large enterprise financing

a. liability side financing

36. Factually it means a credit sale is

37. An investor and his customer contribute either in

38. The term Shirrkah – al- aqd in Islamic commercial

a. Payment of a fixed price

39. The Islamic financial system prohibits transactions

a. Extreme uncertainties resulting from speculation and gambling