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An Islamic Development Bank branch in Dhaka. Sharia and securities trading is the impact of conventional financial markets activity for those following the islamic religion and particularly sharia law. Sharia practices ban riba (earning interest) and involvement in haram. It also forbids gambling and excessive risk (bayu al-gharar).
A disadvantage Islamic funds have compared to conventional ones is that since they must "exclude companies with debt-to-market capitalization" above a certain ratio (which the industry has set at 33 percent), and since a fall in the price of the stock raises its debt-to-market capitalization ratio, falling stock prices may force a fund to sell ...
In Islamic jurisprudence , Bai-muajjal, also called bai'-bithaman ajil, [284] or BBA, is a credit sale or deferred payment sale, i.e. the sale of goods on a deferred payment basis. In Islamic finance, the bai' muajjal product also involves the price markup of a murabahah contract, and a murabahah product involves a bai-muajjal deferred payment.
Answers to the argument (of economists such as Farooq) that lenders of money are due some kind of rent-like compensation; [262] and to the question of why charging extra to finance a purchase (in, for example, murabaha Islamic finance) is allowed, but in lending cash it is riba, [Note 52] [413] can be found (supporters believe) in the "Islamic ...
The industry has been praised for turning a "theory" into an industry that has grown to about $2 trillion in size; [6] [7] [8] for attracting banking users whose religious objections have kept them away from conventional banking services, [9] drawing non-Muslim bankers into the field, [2] and (according to other supporters) introducing a more stable, less risky form of finance.
According to at least one author (Monzer Kahf), Mu'amalat "sets terms and conditions of conduct for economic and financial relationships in the Islamic economy" and provides the "grounds on which new instruments" of Islamic financing are developed. It also extends beyond discussions of Islamic legality "to the social and economic repercussions ...
Between the 9th and 14th centuries, the Muslim world developed many advanced economic concepts, techniques and usages. These ranged from areas of production, investment, finance, economic development, taxation, property use such as Hawala: an early informal value transfer system, Islamic trusts, known as waqf, systems of contract relied upon by merchants, a widely circulated common currency ...
Islamic taxes are taxes sanctioned by Islamic law. [1] They are based on both "the legal status of taxable land" and on "the communal or religious status of the taxpayer". [1] Islamic taxes include zakat - one of the five pillars of Islam. Only imposed on Muslims, it is generally described as a 2.5% tax on savings for charity.