Think Different

  Islamic banks, or Sharia-compliant banks, operate without charging or paying interest on loans. Instead, they generate revenue by sharing risks with their clients. How It Works No Interest Islamic banks abstain from charging or paying interest on loans as the Holy Quran forbids riba, the Arabic term for interest. Risk Sharing These banks earn by sharing risks with their clients. For instance, they might purchase a property and then lease it to the customer. Profit When a loan is repaid, Islamic banks make a profit. This profit is structured in a way that avoids reliance on interest. Why It's Important Islamic banking aims to further the socio-economic objectives of the Islamic community. It bans usury and speculation, which are considered exploitative, and is based on the principle of equal sharing of profits, losses, and risks. In addition to not having interest rates, Islamic finance's key principle is risk sharing among parties in all transactions. Below are some key Sh...