Islamic finance and banking are based on principles that adhere to Sharia law, which prohibits the payment or receipt of interest (riba). The Ofqual Level 5 Certificate course covers the following key principles:
| Principle | Description |
|---|---|
| 1. Sharia Compliance | All financial transactions must comply with Islamic law, which prohibits investments in certain industries such as alcohol, gambling, and pork. |
| 2. Profit and Loss Sharing | Islamic banks share profits and losses with their clients, promoting a more equitable distribution of wealth. |
| 3. Asset-Backed Financing | Islamic finance is based on tangible assets, such as real estate or commodities, rather than speculative investments. |
| 4. Risk-Sharing | Parties share both the risks and rewards of investments, fostering a sense of partnership and mutual benefit. |
| 5. Prohibition of Gharar and Maysir | Islamic finance prohibits uncertainty (gharar) and gambling (maysir), promoting transparency and ethical conduct in financial transactions. |
By understanding and applying these key principles, students enrolled in the Ofqual Level 5 Certificate course will gain a comprehensive understanding of Islamic finance and banking, preparing them for a successful career in this rapidly growing industry.