Islamic Finance in a Nutshell: A Guide for Non-Specialists

The recent turbulence in the global financial markets has drawn attention to an alternative system of financial inter-mediation: Islamic banking and finance, which has so far remained on the sidelines of the unrest. In addition to man’s relationship to God, Islam is concerned with justice, fairness, and morality. Thus, Islam has a financial system that ensures that these ideals are upheld. One of the main points distinguishing Islamic finance from traditional finance is the prohibition of interest. To make money without charging interest, Islamic banks use profit and loss sharing arrangements, purchase and resale of goods, and the provision of services for fees. Additional key ideas that those interested in the field of Islamic finance need to understand include financial statement analysis, Shari’a law, and making money in the absence of interest and regulation._x000D_