Islamic Finance
Is finance allowed in Islam?
Islamic finance is a very old concept which as old as Islam itself. Finance in Islam is a serious subject a Muslim are not allows lending or borrowing money and benefiting from it any way, it is not allowed in Islam.
The interest is known as riba and it is not allowed to a Muslim. All the basic principles of any Islamic banking come from the shariah which is like a legal code of Islam. Figh al-muamalat is the rules that govern commercial transaction in Islamic Finance.
Understanding Islamic Banking
Islamic finance is a very different type of banking from your normal system of banking. Islamic Finance Sydney works on sharia law or Islamic law and is worked according to Islamic economics.
There is a lot of difference between a conventional banking system and a Islamic banking system as Islamic banking do not allow or prohibits unnecessary high rates and other speculations. The Shariah do not allow any type of gambling which is called as maisir. Also taking interests is not allowed in Islamic Finance. There are things which are prohibited in Islamic finance such as alcohol, gambling, pork.
Sometimes it is seen as a modern phenomenon but it is a very old concept whose principles are coming from Quran.
Principles of Islamic Finance
Islamic Finance Australia strictly complies with Sharia law. There are some prohibitions is Islamic laws and they are not always necessary illegal in the country which they are living.
Following are some basic principles followed by an Islamic Finance Sydney company:
Interest charging is not allowed
In Islam lending money to anyone is not considered a good thing. As it is considered an exploitative practice which can lead to someone exploitation. Sharia law does not allow interest charging on any one.
Prohibited activities
Some activities, such as producing and selling alcohol or pork, are prohibited in Islam. The activities are considered haram or forbidden. Therefore, investing in such activities is likewise forbidden.
Speculation or maisir
Any form of speculation or any kind of gambling is not allowed according to sharia law. Thus any Islamic Finance Australia institutions cannot get themselves into any kind of loan where the profit is dependent on any uncertain event in near future.
Risk
Islamic prohibits engaging in any activity which is risky or uncertain in nature. There is a particular term for measuring the risk of uncertainty which is called gharar.
Following are some basic principles for an Islamic Finance to follow. If you are also looking for an Islamic Car Finance Australia or Islamic Home Finance Australia then Ijarah Finance is the best option for you to choose. Contact us today for more information regarding our Islamic Finance Sydney services.