Guided by the Sharia laws Islamic banking is grounded on the

laws on the belief that all types of interest is forbidden.

Investing in businesses that deal in business of pork or alcohol

or those that lead to gossip such as media or are against

Islamic values such as pornography is completely prohibited.

Speculative transactions are also banned in this law. Because of

a different way of running their financial system the regular

banking financial instruments cannot be used in Islamic

banking.

However, the banking and finance in Islam do have the same

motive as the conventional banking which is to generate money

for the banking organisation which is by lending capital while

also keeping within the boundaries outlined by the Islamic law.

Instead of the basic principle which the conventional banks use

that is transfer of risk the Islamic banks follow the principle of

risk sharing.

The laws of Sharia vary from country to country. While in

some countries they are liberal in other places they follow the

exact interpretation of Sharia laws.