GUEST COLUN - By Ashar Nazim - 1) What is Islamic finance? n
Islamic finance is a system of financial services that complies
with the principles of Shari’a (Islamic law). Islamic finance is
free from the elements of Riba (interest), Gharar (extreme
uncertainty and lack of transparency), Qimar (gambling) and some
other market malpractices which are prohibited by Shari’a.
Islamic finance transactions are typically asset backed as
charging of returns on lending money is prohibited. Islamic
finance is based on the principle of assuming risk / liability
in order to obtain rewards. 2) What is Shari’a? n Shari’a is the
way of life, divine guidance and laws as prescribed by Allah.
The primary sources of Shari’a are the Quran and the Hadith
(sayings, actions and silent approvals of the Holy Prophet S.A).
For areas where these sources are silent or not clear, Ijtihad
or juristic interpretations of Islamic scholars are relied upon.
Shari’a embodies all aspects of the Islamic faith, including
beliefs, acts of worship, de