Islamic banking uses a number of Shariah compliant instruments to undertake its activities: such as Mudarabah, Musharakah, Murabahah, Istisnah, and Salam. Considering that Shariah compliance essentially is discouraging debt, unlike its conventional counterpart, Islamic banks normally do not apply penalties for early sett lement of debt-basedfinancing.
By Farouk Abdullah Alwyni
Islamic Finance News
