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 Concepts of Islamic Finance and Banking online course covers the following key principles:
| Principle | Description |
|---|---|
| 1. Prohibition of Riba | Islamic finance prohibits the payment or receipt of interest, as it is considered exploitative and unjust. |
| 2. Risk-Sharing | Parties in Islamic finance share both profits and losses, promoting a more equitable distribution of risk. |
| 3. Asset-Backed Financing | Islamic finance is based on tangible assets, ensuring transactions are backed by real economic activity. |
| 4. 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 Concepts of Islamic Finance and Banking online course will gain a comprehensive understanding of how Islamic finance operates and its significance in the global financial landscape.