INTRODUCTION OF ISLAMIC

FINANCE

BY: MOHD ZAKY B. MD RASUL

INTRODUCTION
Islamic finance refers to a system of finance that
complies with Islamic law.
Activities that involve interest (riba), gambling
(maisir) and speculative trading (gharar) are
prohibited.

RIBA

Definition : Increase, additon or growth

Unlawful gain
Example : bank interest

Example

Loan RM10

A
Pay RM12

RM2 is a riba

 Allah s.w.t said in holy Quran:

while God has made buying and selling lawful
and usury unlawful.

Risk

Hazard

uncertainty

Gharar

EXAMPLE
Uncertainty in life insurance policy because we cannot predict
our future.

Why it prohibited by islam?

Surah al Nisa: 29 o you who

believe? Eat not your property
among yourselves unjustly by
falsehood and deception, except
it be a trade amongst you by
mutual consent

MAYSIR
definition

Al-quran

Gambling
betting

They ask the concerning wine and

gambling, say in the is great sin and
some benefit for men. The sin is
greater than the benefit(2:219)

THE ORIGIN, HISTORY AND

EVOLUTION OF ISLAMIC FINANCE
Practiced by nabi muhammad when the Prophet
himself carried out trading operations for his wife,
known as mudharabah.

MAJOR MODELS OF ISLAMIC

BANKING AND FINANCE SYSTEM
Murabah
(Profit
sharing)

Mudharah
(Cost Plus)

Ijarah
(leasing)