Islamic banks
Riba-free financial institutions
Islamic banks are financial institutions that operate according to Sharia law, which prohibits charging or paying interest.
Instead of lending money at interest, they use profit-sharing arrangements, leasing, or cost-plus financing where the bank buys an asset and sells it to the customer at a markup.
Islamic banks have grown rapidly in Muslim-majority countries and increasingly operate in Western financial centers.
- ShariaMuslim religious legal code
- profit and lossNet financial results
- halalPermitted under Islamic law
- profit-sharingDistributing earnings among workers
- risk sharingDistributing potential losses collectively
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