Shari’ah concepts in Islamic banking

Abstract

The paper analyses the main Shari’ah concepts in Islamic banking, a system which operates in accordance with the Islamic law principles, the most important being the prohibition against the payment or acceptance of interest charges (riba), replaced by profit-and-loss-sharing arrangements(PLS), Mudharabah. Also, the paper presents a survey of the historical evolution of the Islamic banking system in Muslim countries, starting with the first Islamic bank, early in the 60’s, Mit Ghamr Local Savings Bank in Egypt. In conclusion, the Islamic banking system is a rapid growth one. It is expected that this presentation will be helpful in increasing the interest in the Islamic principles of banking and financing.