Islamic finance refers to a set of rulings that are consistent with the principles of the Shari`ah (Islamic rulings) and its practical application through the development of Islamic economics.
In fact, Shari`ah prohibits the payment or acceptance of interest charges (riba) for the lending and accepting of money, as well as carrying out trade and other activities that provide goods or services considered contrary to its principles.
The source of the Shari’ah are the Qur’an followed by the recorded sayings and actions of Prophet Muhammad (peace be upon him). If solutions to problems are not found in these two sources, rulings are made based on the consensus of Muslim scholars and Ijtihad (legal reasoning), so long as such rulings to not deviate from the fundamental teachings in the Qur’an.
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