Islamic banking and finance
banking and finance activity compliant with Islamic law
Islamic banking, Islamic finance (Arabic: مصرفية إسلامية masrifiyya 'islamia), or Sharia-compliant finance is banking or financing activity that complies with Sharia (Islamic law) and its practical application through the development of Islamic economics. Some of the modes of Islamic finance include mudarabah (profit-sharing and loss-bearing), wadiah (safekeeping), musharaka (joint venture), murabahah (cost-plus), and ijarah (leasing).
Sharia prohibits riba, or usury, generally defined as interest paid on all loans of money (although some Muslims dispute whether there is a consensus that interest is equivalent to riba). Investment in businesses that provide goods or services considered contrary to Islamic principles (e.g. pork or alcohol) is also haram ("sinful and prohibited").
These prohibitions have been applied historically in varying degrees in Muslim countries/communities to prevent un-Islamic practices. In the late 20th century, as part of the revival of Islamic identity, a number of Islamic banks formed to apply these principles to private or semi-private commercial institutions within the Muslim community. Their number and size has grown, so that by 2009, there were over 300 banks and 250 mutual funds around the world complying with Islamic principles.
By 2024, estimates of total Sharia-compliant assets ranged from US$3.88 trillion according to the Islamic Financial Services Board's Stability Report 2025, to US$5.98 trillion according to the ICD–LSEG Islamic Finance Development Report 2025, which applied a broader definition of the Islamic economy across 140 countries. The Gulf Cooperation Council region accounted for the largest share at 53.1% of IFSB-measured assets, followed by East Asia and the
Pacific at 21.9%, driven by Malaysia and Indonesia.
This brief starts where responsible research should: with the source description of “Islamic banking and finance” as banking and finance activity compliant with Islamic law. Everything that follows is an evidence route, not borrowed authority.
Why this record matters
The subject matters to the history & society register because the source frames it as banking and finance activity compliant with Islamic law. Its deeper value depends on whether names, dates, institutions and citations support that framing.
Chronology, provenance and viewpoint should be read together before a broad social or political interpretation is accepted. The source revision retrieved here is dated Sep 18, 2026. The linked authority identifier is Q457753. The Library of Congress control number is sh88004780. 1 of 1 selected statements include explicit references; 0 carry qualifiers and 0 use preferred rank. The first chronological checks are 2009, 2024 and 2025.
Later summaries often reconcile disputed chronology or motive more neatly than the contemporary record permits. The source lead contains qualifying language; that uncertainty should survive quotation, summary and reuse. Authority statements aid reconciliation but still require their own references, qualifiers and ranks to be checked.
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This entry incorporates text from “Islamic banking and finance” on English Wikipedia. Contributors are listed in the page history. Text is available under the Creative Commons Attribution-ShareAlike 4.0 License. Selected authority identifiers and statements are retrieved from Wikidata under CC0; their references and qualifiers remain part of the verification path.