Islamic finance products, services and contractsBanking or banking activity that complies with Sharia (Islamic law)—known as Islamic banking and finance, or Sharia-compliant finance—has its own products, services and contracts that differ from conventional banking. Some of these include Mudharabah (profit sharing), Wadiah (safekeeping), Musharakah (joint venture), Murabahah (cost plus finance), Ijar (leasing), Hawala (an international fund transfer system), Takaful (Islamic insurance), and Sukuk (Islamic bonds).
GhararGharar (غرر) literally means uncertainty, hazard, chance or risk. It is a negative element in mu'amalat fiqh (transactional Islamic jurisprudence), like riba (usury) and maysir (gambling). One Islamic dictionary (A Concise Dictionary of Islamic Terms) describes it as "the sale of what is not present" — such as fish not yet caught, crops not yet harvested. Similarly, author Muhammad Ayub says that "in the legal terminology of jurists", gharar is "the sale of a thing which is not present at hand, or the sale of a thing whose aqibah (consequence) is not known, or a sale involving hazard in which one does not know whether it will come to be or not".
Islamic banking and financeIslamic banking, Islamic finance (مصرفية إسلامية masrifiat 'iislamia ), or Sharia-compliant finance is banking or financing activity that complies with Sharia (Islamic law) and its practical application through the development of Islamic economics. Some of the modes of Islamic banking/finance include Mudarabah (profit-sharing and loss-bearing), Wadiah (safekeeping), Musharaka (joint venture), Murabahah (cost-plus), and Ijara (leasing).
RibaRiba (ربا ,الربا، الربٰوة ALA, ˈrɪbæː) is an Arabic word that can be roughly translated as "usury", or unjust, exploitative gains made in trade or business under Islamic law. Riba is mentioned and condemned in several different verses in the Qur'an (3:130, 4:161, 30:39 and perhaps most commonly in 2:275-2:280). It is also mentioned in many hadith (reports describing the words, actions, or habits of the Islamic prophet Muhammad). While Muslims agree that riba is prohibited, not all agree on what precisely it is.
Islamic economicsIslamic economics (الاقتصاد الإسلامي) refers to the knowledge of economics or economic activities and processes in terms of Islamic principles and teachings. Islam has a set of special moral norms and values about individual and social economic behavior. Therefore, it has its own economic system, which is based on its philosophical views and is compatible with the Islamic organization of other aspects of human behavior: social and political systems.
Shafi'i schoolThe Shafi'i school (شَافِعِي, also spelled Shafei), or Madhhab al-Shāfiʿī, is one of the four major traditional schools of religious law (madhhab) in the Sunnī branch of Islam. It was founded by Muslim theologian Muḥammad ibn Idrīs al-Shāfiʿī, "the father of Muslim jurisprudence", in the early 9th century. The other three schools of Sunnī jurisprudence are Ḥanafī, Mālikī and Ḥanbalī. Like the other schools of fiqh, Shafii recognize the First Four Caliphs as the Islamic prophet Muhammad's rightful successors and relies on the Qurʾān and the "sound" books of Ḥadīths as primary sources of law.
