Sunday, February 17, 2019
Another major principle of Moslem is fairness. In Islamic banking, fairness is highlighted through its operations which the dubious toll and condition transactions be not engaged with Islamic banks. foothold and conditions needed in a transaction are disclosed in the agreement. In addition, everyone in the transaction can make informed end which are not misled or cheated. Besides, according to article for WIBC on Islamic Banking and Finance, there is a clear division between the allowed and forbidden of the activities. For example, transactions involving alcohol, gambling, armaments, pork related products, and other socially detrimental activities should be avoided in Islamic Finance. In Islamic banking, there are still fivesome main concepts which are profit and sharing, Wadiah, Musharakah, Murabaha and Ijarah. Profit and loss principle is in reality based on mudarabah principle. chthonian this principle, profits will be shared between owner of capital (financier) and the entrepreneur on the basis of contractual agreement. However, financier will lost it money invest if the business fail. This bureau that, income from the money invest by financier is not guarantee. For wadiah, refund of the trail is guarantee by the bank. Depositor under this principle might receive a share on profit of the banks business. Wadiah is safekeeping as their principal is guarantee in full of demand although the profit of investment by bank is not guarantee. Musharakah is a joint enterprise or partnership business which both parties will manage the business together. Under this principle, ratio of profit or loss pre-determined basic. After a certain(a) periods, a party can terminate the joint venture gradually. Murabaha is other principle of Islamic ban... ...e in financial resources.The principle of Islamic is Syariah, it is develop through four main Islamic juristic schools which is Hanafi, Maliki, Shafi and Hanbali. However, Quran and hadith is the two main sour ces which the Shariah derived from. In Islamic finance, there are three major principles. Firstly, the prohibition of usury or interest (riba). In the words of Maulana Maudoodi, page 139, Riba can be defined as the unmoving increase on the capital which collected against a fixed period. This center that interest is consider as riba if the amount loaned is going doubled and re-doubled and it is disposed as consumption needs instead of productive needs. One of the examples of riba is letting income.According to Chapter 2, Verse 275 of the Quran, involve in trade activities although is sound identical soft of riba but actually is encouraged by Islam but not for riba.