Islamic Banking

Islamic banking (Arabic : al-Islamiyah al-Mashrafiyah) is a banking system whose implementation is based on Islamic law (Syari'ah). Establishment of this system is based on the prohibition in Islam to lend or collect loans with loan interest rates (Riba), as well as the prohibition to invest in businesses categorized forbidden (haram). Conventional banking system can not guarantee the absence of these things in investments, such as in businesses associated with the production of food or drink unlawful, media or entertainment business that is not Islamic, and others.
Although these principles may be applied in the economic history of Islam, but only at the end of the 20th century began to stand up Islamic banks which apply for private commercial institutions or semi-private in the Muslim community in the world.

Principles of Islamic banking :
Islamic banking has the same purpose as conventional banking, the banking institutions in order to generate capital gains by way of loan, deposit funds, to finance business activities, or other appropriate activities.
Principles of Islamic law forbids the elements below in banking transactions.

• Commerce over the forbidden goods,
• Interest (riba),
• Gambling and speculation that intentional (maisir), and
• Ambiguity and manipulative (gharar).

Comparison between Islamic banks and conventional banks are as follows:

Islamic Banks

• Perform only lawful investments according to Islamic law
• The principle of profit-sharing, buying and selling, and leasing
• Profit-oriented and falah (happiness of the world and the hereafter according to the teachings of Islam)
• Relationships with customers in the form of partnership
• Collection and disbursement of funds according to the Sharia Supervisory Board fatwas

Conventional Banks

• Invest either lawful or unlawful according to Islamic law
• Wearing the interest rate
• Profit-oriented
• Relationships with customers in the form of creditor-debtor
• Collection and disbursement of funds are not regulated by the board of a kind

Afzalur Rahman in his book on Islamic Banking and Insurance Doctrine (1980) argues that the principles of Islamic banking aims to bring benefit to our customers, because the promise of justice in accordance with the Islamic economic system.

Islamic banking products

Deposits

•     Al-wadi'ah (care services)
•     Deposits Mudhorobah

For the

•     Al-Musharaka (Joint Venture)
•     Al-Mudaraba
•     Al-muzara'ah
•     Al-Musaqah

Buying and selling

•     Bai 'Al-Murabahah
•     Bai 'As-Salam
•     Bai 'Al-Istishna'

Lease

•     Al-Ijarah
•     Al-Ijarah Al-Bit-Tamlik Muntahia

Service

•     Al-Wakalah
•     Al-Kafalah
•     Al-Eve
•     Ar-Rahn
•     Al-Qardh

Big success of Islamic banking in Turkey

Turkey since 1985 has implemented the Islamic banking, is now the country is immune from the global crisis of Islamic banking forbids usury system reaps huge success in Turkey. In recent years, several Islamic Bank began popping up in the country, although some others are still embodied in the "name" conventional, but is "secretly" anti-usury apply.
Fruit, the Union of Non-Usury Bank Turkey is now believed to be the ideal example of a credible financial system capable of overcoming the current global economic crisis.
Necar Yunus, head of the Majlis Unity Bank declared Turkish Non-Riba, Islamic banks in the system was already implemented in Turkey since 1985 ago. This system proved successful in every respect, both the law, management, and finance.
"Bank with non-usury system proved a great success in our country," said Necar while giving a speech at the event in memory of the death of the father of the Turkish Islamic Bank Prof. Dr. Sabahuttin, as reported by the Turkish newspaper, Zaman.
Meanwhile, Prof. Dr. Uzsavi Ismail, professor of economics at al-Fatih University of Turkey, said if the bank with non-usury system is believed to be the perfect solution for the future of the world economic system.
Analysis Uzsavi not an exaggeration, because the Vatican Pope Benedict XVI called on the entire world just to use the Islamic banking system is non-usury as a solution to the global financial crisis.
(taken from www.wahdah.or.id/baru/wis/index.php/index-info-dunia-islam/1963-perbankan-islam-sukses-besar-di-turki)