Islamic Finance
/ˌɪslɑːˈmɪk faɪˈnæns/
Definitions
- (n.) A financial system governed by Sharia law principles, prohibiting interest (riba) and emphasizing risk-sharing, asset-backed financing, and ethical investing.
Islamic finance prohibits charging interest on loans, adhering to Sharia principles.
- (n.) The body of legal rules and practices regulating financial transactions compliant with Islamic jurisprudence (fiqh al-muamalat).
The regulatory framework for Islamic finance ensures contracts comply with Sharia law.
Forms
- islamic finance
Related terms
See also
Commentary
Islamic finance is distinct from conventional finance in its prohibition of interest and emphasis on risk-sharing and asset backing, requiring careful drafting of contracts to ensure compliance with Sharia principles.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.