Operations of Islamic Banks
The main principles of their banking are:
- Prohibition of interest in all forms of transactions.
- Undertaking business and trade activities on the basis of fair and legitimate (Halal) profits.
- Giving Zakah.
- Prohibition of Monopoly.
- Cooperation for the benefit of society and development of all Halal aspects of business trade and investment that are not prohibited by Islam.
The Islamic Development Bank (the only bank of its kind working in Jeddah) has similar objectives except that the Bank’s activities are oriented more towards development projects of the member countries rather than to commercial activities. According to the agreement of the Bank, “Islamic Development Bank aims to foster economic development and social progress of member countries, individually as well as jointly, in accordance with the principles of Shari'ah”.
Source: Money and Banking in Islam, Ziauddin Ahmed; Munawar Iqabal; M. Fahim Khan. Republished with permission.
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