Staying true to your values is what makes a Muslim individual close to their ethnicity. Sharia/Islamic Banking is one way to connect your beliefs and innovation together. Such a banking network has gained popularity in parts of Asia, Africa, and the Middle East, eliminating the need for traditional banking. There are a lot of Islamic Banking Certifications that can help you understand the core of Sharia Laws and regulations. Further, this blog explains the basics involved with Islamic Finance.
Islamic finance is a way to perform financial activities that are compatible with the principles of Sharia. Sharia law forbids you from unethical, immoral, speculative activities as well as interest, gambling, and indecision.
Islamic finance motivates entrepreneurship, mutual cooperation, generosity, and a spirit of partnership that connects the capital owner with the real economic activities that may actually contribute to the welfare of society through commerce, manufacturing, construction, and related areas.
This is not only limited to the modes of financing but, also comprises all business and financial transactions or rulings.
All of us must seek lawful wealth for our needs, attain self-sufficiency, and provide shelter, and so on. There is a high demand from the Muslim community for Sharia-compliant alternatives to conventional finance.
The main challenge revolves around what is allowed and what is not, according to the Sharia Laws.
Sharia lays down rules that promote fair dealing and business ethics based on universal principles.
These principles consider the community needs that commit to a healthy society. Let us dive into the principles!
Islamic banking has to strictly follow the norms of Sharia Law. For a lot of Muslims, traditional banking institutions are a big No! The Islamic beliefs avert them from getting involved with usury or interest (Riba). The main focus being, how you generate capital in compliance with Sharia. This makes it very important for you to understand the basic principles involved with Sharia Banking.
Now that we know the basic principles, let’s dive straight into the types of Islamic Banking investments.
Conventional banking focuses on generating profits, through the interest charged. It is an unethical banking system that runs on manmade laws and regulations. This system allows the public to deposit money at low-interest rates and gives a loan to the borrowers at a higher rate.
Down below we have listed the major differences between Islamic Banking and Conventional Banking:
Islamic/Sharia banking has extensively increased the demand of professionals who have completed an Islamic Banking Certification. Specifically, when it comes to Muslim-dominated areas around the world. Sharia Finance requires a lot of time and attention, as it involves legal laws and regulations. It might sound difficult but once you get a hang of it, it’s going to be a piece of cake!