Islamic Banking Principles

Principles of Islamic Banking are based on Islamic law rules of the agreement between the bank and others to deposit funds and / or financing activities or other activities in accordance with sharia.

Some of the principles / laws adopted by the Islamic banking system, among others:
  1. Payment of loans with different values ​​of the loan value with the value determined previously not allowed.
  2. Funders must share the profits and losses as a result of institutions that borrow funds business.
  3. Islam does not allow the "making money from money". Money is only a medium of exchange and not a commodity because it has no intrinsic value.
  4. Gharar element (uncertainty, speculation) is not allowed. Both sides must know all too well the results they would get from a transaction.
  5. Investments should only be given to businesses that are not forbidden in Islam. For example: business liquor / alcoholic beverages should not be funded by the Islamic banking.
The principle of Islamic banking will ultimately bring benefit to the people because it promises economic system balance

This is unfortunate because the lack of knowledge of these principles so that there are still many people who feel less confident and less easy to use the facilities contained in Bank Syariah principles. In Islamic Banking has stipulated a wide range of transactions that are detrimental to both parties. Because if you let anyone hurt and harmed then it violates the teachings of Islam itself. Shariah banking principle is derived from the Quran and Hadith.

Read Also:

Islamic Economics

Islamic Banking

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