Islami banks do business of banking as commercial banks but it is on the basis of Islamic Shariah or Islamic principles and guided by Islamic economics.
Two basic principles behind Islamic banking are
- the sharing of profit and loss and,
- significantly, the prohibition of the collection and payment of interest.
More from this Section
- Company /corporation
An organization of business or voluntary association of many persons who invest money/capital under the existing law to gain profit and they share the profit and loss arising there from...
- Banking System
Banking system refers to the foundation of banking institutions classified on the basis of functions namely, central bank, commercial banks ...
- Prime Lending Rate (PLR)
Prime Lending Rate (PLR) is the rate of interest charged on loans by banks to their most creditworthy customers.
Factoring is sale of receivables to a financial institution usually on a ‘non-recourse’ basis
- Abusive tax shelter
Abusive tax shelter is a limited partnership that the IRS judges to be claiming tax deductions illegally.
- Asset stripper
Asset stripper is a corporate raider (company A) that takes over a target company (company B) in order to sell large assets of company B to repay debt. Company A calculates that the net selling of the assets and paying off
- Cash management services
Cash management services is a service in which a bank agrees to handle cash collections and cash disbursements for a business firm