The basis for all Islamic finance lies in the principles of the Sharia'a, or Islamic Law, which is taken from the Qur'an and from the example of Prophet Muhammad (peace be upon him). The Islamic form of finance is as old as the religion of Islam itself.
Central to Islamic finance is the fact that money itself has no intrinsic value. As a matter of faith, a Muslim cannot lend money to, or receive money from someone and expect to benefit – interest (known as riba) is not allowed. To make money from money is forbidden – wealth can only be generated through legitimate trade and investment in assets. Money must be used in a productive way.
The principal means of Islamic finance are based on trading – it is essential that risk be involved in any trading activity. Any gains relating to the trading are shared between the person providing the capital and the person providing the expertise.
Islamic Bank of Britain is a stand-alone bank. We are not part of a larger conventional group that combines Sharia’a banking and conventional banking. |
