What is Islamic banking system and defination with How its works

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I have seem to be there is no standard way of describe accurately, what is Islamic bank is, banking actively that is consist of the rule of Sharia and its apply through the development of islamic economics.Many person has given the defination of islamic bank, i.e At first, Mirza Basheer-ud-Din Mahmood Ahmad said that islamic economics in explain in his book “Nizame Nau” (1942) and “Islam ka Iqtisadi Nizaam” (1945). After some days Muhammad Hamidullah (1944,1955,1957 and 1962) has given same definition of Islamic bank. They have seem to be, the necessary of commercial bank and their perceived “necessary evil” have proposed a banking system based on concept  of Mudarabha profit and loss sharing.

The banking system of the principles of Islamic economics. The fundamental of principles behind Islamic banking are the sharing of profit and loss but basically, the prohibition of the collection and payment of interest man to man. On the other hand, collecting system of interest is not permitted under Islamic law.

On the other hand, I have seem to be, the broadly speaking an “Islamic bank is an institution that mobilises financial resources and invest them in an attempt to achieve pre stronged is islamically acceptably social and financial objectives. This word mobilisation and investment of funds should be conducted in accordance with the principles of Islamic Sharia”.

At last say that as early as soon economy and an early from of mercantilism called Islamic capitalism improved the eight and twelfth centuries. A rule of banking based on the statutes of Islamic law and economics collecting interest or riba is  forbidden by Islamic Law.

Sharing or dividing benefit/profit and loss are a banking rule and share holder capital and deposits are kept separate to ensure fair revenue sharing.

Following the rule of Islamic Bank at means banking-
1. Forbidden or Prohibition of interest.
2. Ethical or treating of morality Standards.
3. Moral and social values.
4. Responsibility or lialility and business Risk
These called principles of Islamic Banking.

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