Characteristics of Islamic Finance and Banking

As the homo has recently passed through the orbicular fiscal crisis that begun in 2008 in the USA with the banks collapsing, analysts be bad different opinions and making immature economical hypotheses about the institution of, as well as the process of different countries break loose from the crisis. Among all these new theories, the discipline of Islāmic banks is interesting in monetary value of its nature and consequences. In my essay, I will try to play up the staple fiber tenets of the Islāmic finance, the reasons of the restriction of interest, the most(prenominal) important tools used by Islamic banks in economic activities and brief explanation of them, and at long last my view point of the equiprobable future improvement of the Islāmic financial system.\nFirst of all, let us outline how Islamic banks in reality work and what their main differences are in comparison with pompous 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 breathing out and, significantly, the prohibition of the collection and defrayment of interest. Hence unlike constituted commercial banks, Islamic banks do not pay or charge interest on lending or acceptation of cash. 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 new(prenominal) things, the acknowledge and payment of riba. The interpretations to clarify the center behind this restriction suggests that earning or charging extra amount of money from debtor has to be seen something as immoral behavior, because making contract on your borrower is actually partial from the viewpoint of Islam. To make it clear, the righteousness of Islam basically promote the principle of justice in the financi al activities as well as in all other activities of an individual. Therefore...