![]() According to the Asian Banker Research Group, the world's 100 largest Islamic banks have set an average asset growth rate of 13%. There are over 1500 Islamic financial institutions worldwide across 80 countries. Current global Islamic financial assets and assets under management have reached USD2.88 trillion with annual growth of 14% as at December 2019. Islamic finance has grown tremendously since it first emerged in the 1970's. Furthermore, by emphasising the need for transactions to be supported by genuine trade or business related activities, Islamic banking sets a higher standard for investments and promotes greater accountability and risk mitigation. Through the use of various Islamic finance concepts such as ijarah (leasing), mudharabah (profit sharing), musyarakah (partnership), financial institutions have a great deal of flexibility, creativity and choice in the creation of Islamic finance products. Activities that involve interest (riba), gambling (maisir) and speculative trading (gharar) are prohibited. These principles are supported by Islamic banking's core values whereby activities that cultivate entrepreneurship, trade and commerce and bring societal development or benefit is encouraged. The underlying principles that govern Islamic banking are mutual risk and profit sharing between parties, the assurance of fairness for all and that transactions are based on an underlying business activity or asset. Islamic banking refers to a system of banking that complies with Islamic law also known as Shariah law. ![]()
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