Islamic concepts and principles as practised in Islamic banks

The bayt al-mal was central to the Islamic banking and financial system and is the precursor of modenr Islamic banks. Money is a means to an end, primarily a unit of account, and is only valued if attained through halal means. Time loans are not valued. Money can be a growing asset if involved in factors of production; riba , self-growth through interest-bearing loans, is prohibited. Islam sanctions non-interest loans like mudaraba . Islamic banks are profit-seeking financial institutions as well as agencies for economic and social development. Islamic banks must maintain an equilibrium between capital utilization, investment, profitability, and development. Islamic banks can levy a surcharge to defray the cost of services they provide. Commercial bills and promissory notes are interest-bearing and prohibited; however, alternatives are available. The process for collecting and calculating zaka must be precise.