Islamic Banking - Opportunities and Challenges
An Overview of Islamic Banking: Understanding the key concepts, principles, and modes of financing in Islamic banking Islamic banking, also known as Sharia-compliant finance, has gained significant prominence in the global financial landscape. This unique banking system follows the principles of Islamic law, or Sharia, which prohibits the charging or paying of interest on loans. Instead, Islamic banks operate on the basis of profit and loss sharing, where the bank and its customers share both the risks and rewards of their investments. This concept is rooted in the belief that all financial activities should be conducted in a manner that is ethical and in accordance with Islamic values. One of the key features of Islamic banking is the emphasis on halal investments, which means investments that are permissible and compliant with Sharia principles. This requires financial institutions to carefully screen potential investment opportunities, ensuring that they are free from any prohibited