The Sharia Law also known as the Islamic Law is the foundation of the concept of Islamic finance which dates back to the birth of the religion of Islam itself. Sharia law is a code of conduct that guides the followers of Islam in social, economic, and political matters based on the Holy Quran and examples preached by Prophet Muhammad.
Islamic finance’s main focus point is the fact that money
itself has no intrinsic value. This denotes that Muslims are prohibited to lend
money in order to receive an interest on it known as riba in Arabic. Trading is the principle means of Islamic finance
and essentially a proportion of the risk is borne by both parties. Any gains involved
in the trading are shared between the person providing the capital and the
person providing the expertise. However, sharia also prohibits business
transactions based on prohibited products and industries that are damaging to
society according to Islamic teachings such as alcohol, pork, prostitution, pornography,
tobacco, and any products based on uncertainty or gambling.
Key concepts of the
Sharia Law include the following: humans are mere trustees of wealth and
therefore they must manage wealth according to Allah's commands; Muslims must balance trade and wealth
with the virtues of life, meaning they should seek moderation in the material
world by avoiding being either stingy or too materialistic; an individual must
balance personal needs with social needs by using the earth's resources wisely
and by promoting justice in all economic activities; economic transactions should take place within a reasonable, responsible,
free-market economy where supply and demand are decided based on the
market trends.
Translations2u specialises in the translation of Islamic finance agreements and other Sharia law matters.
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