London School of International Business (LSIB)

What are the key principles of Islamic finance covered in the Ofqual Level 5 Certificate in The Concepts of Islamic Finance and Banking qualification?

Key Principles of Islamic Finance Covered in the Ofqual Level 5 Certificate in The Concepts of Islamic Finance and Banking

Islamic finance is based on principles that adhere to Sharia law, which prohibits the payment or receipt of interest (riba). The Ofqual Level 5 Certificate in The Concepts of Islamic Finance and Banking covers the following key principles:

Principle	Description
Prohibition of Riba	Islamic finance prohibits the payment or receipt of interest, as it is considered exploitative and unjust.
Risk-Sharing	Parties in Islamic finance share both profits and losses, promoting a more equitable distribution of risk.
Asset-Backed Financing	Islamic finance is based on tangible assets, ensuring transactions are backed by real economic activity.
Ethical Investments	Islamic finance prohibits investments in industries such as alcohol, gambling, and pork, promoting ethical and socially responsible investing.

By understanding and applying these key principles, students of the Ofqual Level 5 Certificate in The Concepts of Islamic Finance and Banking will gain a comprehensive understanding of how Islamic finance operates and its significance in the global financial landscape.