Characteristics of Islamic Finance and Banking

As the creation has recently passed through the global fiscal crisis that begun in 2008 in the USA with the banks collapsing, analysts atomic number 18 big(p) different opinions and making upstart scotch hypotheses about the livestock of, as well as the process of different countries break loose from the crisis. Among all these new theories, the slip of paper of Islāmic banks is interesting in ground of its nature and consequences. In my essay, I will try to cotton up the prefatorial dogmas of the Islāmic finance, the reasons of the restriction of interest, the some important tools used by Islamic banks in economic activities and brief explanation of them, and lastly 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 received banks. In this banking system, banks are operated by Islamic laws (known as Sh aria), so Islāmic economic principles are considered as primary guidance. Two basic doctrines behind Islamic banking are the sharing of profit and injury and, significantly, the prohibition of the collection and recompense of interest. Hence unlike effected commercial banks, Islamic banks do not pay or charge interest on lending or espousal of coin. Hence unlike constituted commercial banks, Islamic banks do not pay or charge interest on lending or borrowing of money. This is because the Sharias strictly prohibits, among other things, the acknowledge and payment of riba. The interpretations to clarify the mean behind this restriction suggests that earning or charging extra amount of money from debtor has to be seen something as immoral behavior, because making wedge on your borrower is actually foul from the viewpoint of Islam. To make it clear, the godliness of Islam basically promote the principle of justice in the financial activities as well as in all other activi ties of an individual. Therefore...