Essay --

Another major article of faith of Muslim is fairness. In Islamic banking, fairness is highlighted through its operations which the equivocal terms and condition transactions are not engaged with Islamic banks. Terms and conditions needed in a transaction are let out in the agreement. In addition, everyone in the transaction can make sensible decision which are not misled or cheated. Besides, according to article for WIBC on Islamic Banking and Finance, at that place is a clear division between the allowed and require 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 shut away five main concepts which are meshing and sharing, Wadiah, Musharakah, Murabaha and Ijarah. Profit and loss teaching is actually based on mudarabah principle. Under this principle, profits will be shared between owner of capital (financie r) and the entrepreneur on the fundament of contractual agreement. However, financier will lost it money invest if the art fail. This means that, income from the money invest by financier is not guarantee. For wadiah, deliver of the principal is guarantee by the bank. Depositor under this principle might bugger off a share on profit of the banks caper. Wadiah is charge as their principal is guarantee in full of demand although the profit of investment by bank is not guarantee. Musharakah is a joint first step 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 periods, a party can terminate the joint speculation gradually. Murabaha is another principle of Islamic ban... ...e in financial resources.The principle of Islamic is Syariah, it is developed through four main Islamic juristic schools which is Hanafi, Maliki, Shafi and Hanbali. However, record book and Sunna i s the two main sources which the Shariah derived from. In Islamic finance, there are three major principles. Firstly, the prohibition of usury or liaison (riba). In the words of Maulana Maudoodi, page 139, Riba can be defined as the stationary increase on the capital which collected against a contumacious period. This means that interest is consider as riba if the amount loaned is going duple and re-doubled and it is given as consumption needs instead of productive needs. nonpareil of the examples of riba is rental income.According to Chapter 2, Verse 275 of the Quran, involve in trade activities although is enunciate like soft of riba moreover actually is encouraged by Islam but not for riba.