Syariah’s Principle is a rule of agreement based on Islamic law between banks and other parties for the storage of funds and / or financing of business activities, or other activities in accordance with syahria’s.
Some principles / laws adopted by the Islamic banking system, among others:
- Payments on loans with a value different from the value of the loan with a predetermined value are not allowed.
- The funder must share the profits and losses as a result of the institution's borrowing business.
- Islam does not allow "to make money from money". Money is only a medium of exchange and not a commodity because it has no intrinsic value.
- The Gharar element (uncertainty, speculation) is not permitted. Both parties should know well the results they will get from a transaction.
- Investments should only be given to unlawful attempts in Islam. For example liquor business should not be funded by sharia banking.