Course Description

Global Islamic Finance and Banking is a rapidly growing sector that operates in compliance with Shariah (Islamic law) principles. Unlike conventional banking, Islamic finance prohibits interest (riba), excessive uncertainty (gharar), and unethical investments. Instead, it focuses on profit-sharing, risk-sharing, and asset-backed transactions, promoting ethical and socially responsible financial activities.

Key financial instruments in Islamic banking include Murabaha (cost-plus financing), Mudaraba (profit-sharing investment), Musharaka (joint venture partnerships), and Ijarah (leasing). Additionally, Sukuk (Islamic bonds) provide Shariah-compliant alternatives to conventional bonds, ensuring investments are backed by tangible assets rather than pure debt.

Islamic banking institutions also offer Takaful, an alternative to traditional insurance, where members contribute to a risk-sharing pool instead of paying premiums to an insurer. These financial models ensure transactions adhere to ethical guidelines, avoiding investments in industries such as alcohol, gambling, and speculative markets.

With increasing global demand, Islamic finance has expanded beyond Muslim-majority countries to Western markets, offering financial solutions that appeal to ethical investors worldwide. Organizations such as the Islamic Development Bank (IDB) and AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions) play a key role in setting industry standards.

Islamic finance continues to grow, driving financial inclusion and ethical banking worldwide.