Abstract
Islamic banking and finance (IBF) is an ideological discipline that draws on Shariah principles to expunge interest and other exploitative elements from the economic and financial spheres of human society. It is an equity-based system that primarily relies on profit and loss sharing (PLS) modes, namely, Mudarabah (joint venture) and Musharakah (equity participation), to perform borrowing, lending and investment functions. However, it may use some other interest-free instruments, such as Murabaha (deferred payment sale), Ijarah (leasing), Bai Salam (advance payment) and Bai Istisna (procurement engagement), to replace the interest-based banking and finance system in its entirety.
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© 2008 M. Mansoor Khan and M. Ishaq Bhatti
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Khan, M.M., Bhatti, M.I. (2008). Islamic Banking and Finance Movement Worldwide: Performance and Prospects. In: Developments in Islamic Banking. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, London. https://doi.org/10.1057/9780230582309_3
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DOI: https://doi.org/10.1057/9780230582309_3
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-54733-3
Online ISBN: 978-0-230-58230-9
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