What is an Islamic bank?

Muslims use the term "Islamic banking" to refer to a banking system that follows Sharia law. This type of bank provides Sharia-compliant services, which means it does not charge interest or commission, does not engage in gambling or other forms of speculation, and does not invest in companies involved in alcohol production or gambling.

This is guided by Islamic law and principles. It forbids the receipt and payment of interest, the trading of financial derivatives, and the investment in companies that engage in non-compliant activities.

Because it does not charge interest on loans, the Islamic bank loan is a great option for anyone who follows the Muslim faith.
They instead provide risk-sharing products such as profit-sharing investment accounts and Islamic bonds. These products are intended to be more adaptable than traditional fixed deposits offered by traditional banks.

It is also a financing system that adheres to Islamic investment principles. The fundamental principle of Islamic finance is that banks cannot make loans to people who are not financially stable enough to repay them on time.