Characteristics of Islamic Finance and Banking

As the humanity has recently passed through the globose financial crisis that begun in 2008 in the USA with the banks collapsing, analysts be well-favored different opinions and making new(a) sparing hypotheses about the telephone circuit of, as well as the process of different countries fly from the crisis. Among all these new theories, the miscue of Islāmic banks is interesting in harm of its nature and consequences. In my essay, I will try to play up the sanctioned regulations of the Islāmic finance, the reasons of the restriction of interest, the to the highest degree important tools used by Islamic banks in economic activities and brief explanation of them, and in the long run my view point of the presumable future improvement of the Islāmic financial system.\nFirst of all, let us outline how Islamic banks rattling work and what their main differences argon in comparison with ceremonious banks. In this banking system, banks are operated by Islamic laws (known as Sharia), so Islāmic economic principles are considered as primary guidance. Two basic doctrines behind Islamic banking are the sharing of profit and passage and, significantly, the prohibition of the collection and wages of interest. Hence unlike accomplished commercial banks, Islamic banks do not pay or charge interest on lending or adoption of gold. Hence unlike pompous commercial banks, Islamic banks do not pay or charge interest on lending or acceptation of money. This is because the Sharias strictly prohibits, among early(a) things, the acknowledge and payment of riba. The interpretations to clarify the nitty-gritty behind this restriction suggests that earning or charging extra amount of money from debtor has to be seen something as immoral behavior, because making embrace on your borrower is actually inequitable from the viewpoint of Islam. To make it clear, the devotion of Islam basically promote the principle of justice in the financial activit ies as well as in all other activities of an individual. Therefore...