Islamic Banking

EENI- School of International Business

Sub-subject: The Islamic Banking and Finance System. Syllabus:

  1. Introduction to the Islamic Banking and Finance System
  2. Fundamental Prohibitions: Speculation and Interest Based Loans
  3. Compliance with the Sharia for financial products and services
  4. Types of loans in the Islamic Banking: Al-Mudaraba, Al-Murabaha, and Al-Musharaka
  5. Islamic Banks in the World
  6. Cases of banks and bankers applying the principles of the Islamic Banking
    1. Islamic Development Bank
    2. Mohammad Abdul Mannan
    3. Sulaiman Al-Rajhi
    4. Jawad Ahmed Bukhamseen
The sub-subject “The Islamic Banking” is studied...
  1. Masters (e-learning): International Business, Muslims Countries
  2. Doctorates: Ethics and Business, Islamic Countries

Learning materials in English or Spanish Banca Islámica French Islam Portuguese Islam

Sample of the sub-subject: The Islamic Banking and Finance (Islamic Civilisation)
Islamic Banking Zakat

Description of the Sub-Subject: The Islamic Banking and Finance.

The Islamic financial system coincides with the international financial system (investment funds and companies, banks, brokers, and investment), but introduces two fundamental prohibitions:

  1. The Prohibition of Riba (Interest Based Loans)
  2. The Prohibition of Speculation

Under these two premises are re-defining the role of the banks in the Islamic Economics. Of course; an Islamic Bank must comply with the Sharia.

An Islamic Bank cannot be a single lender who is not involved in the business, the Islamic Bank should take a more active role, should be a financial partner, the Islamic Bank assumes the risks of the company and therefore have a part of the business ownership.

When the leaders of the World are searching for financial reforms; it is desirable to have the global financial system built on ethical and moral foundations widely accepted for the common good of humanity.” Dr Ahmad Mohamed Ali, President of the Islamic Development Bank

Recently the Vatican stated that:

The principles of the Islamic Finance may represent a possible solution to the global financial crisis.” (Osservatore Romano, March 2009).

Under the Islamic Banking system there are mainly three types of loans:

  1. Al-Mudaraba
  2. Al-Murabaha
  3. Al-Musharaka

If for whatever reason, any of the parties achieved a benefit derived from the Riba then has an obligation to destine it to charity (Zakat).

Under the principles of the Islamic Economics, the objective of the Islamic Banking is, besides making money, contribute to the distribution of the wealth in a fair and equitable way, not on speculation. Thus, an Islamic Bank can only offer products and services in accordance with the Sharia law.

The largest Islamic Bank is the “Bank Melli Iran,” followed by the “Al-Rajhi Bank of Saudi Arabia.”

  1. Iran has the world's largest repository of the Islamic financial asset.
  2. Six of the ten largest Islamic banks in the World are Iranian

The International Bank of Kuwait offers services of the Islamic Banking.

Mohammad Abdul Mannan Muslim Banker

Jawad Ahmed Bukhamseen Kuwaiti Businessman

Related information: The Arab Development Funds and the Islamic Chamber of Commerce and Industry

Religions and International Business



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