ISLAMIC FINANCIAL TERMINOLOGY

Islamic Banking refers to a system of banking or banking activity that is consistent with Shari'aor Islamic law. 

Shari'a:meaning the Way or the Path - Commonly known as Islamic Law.

PRIMARY SOURCES

THE QURA'AN:
Sets the framework on Islamic finance and economics. About 70- 100 verses concerning business relationships 

THE SUNNAH:
The Acts and Sayings of the Prophet PBUH -A large wealth of prohibitions and recommendations. The backbone of contracts -Found in 6 main collections

SECONDARY SOURCES

THE FIQH - Scholarly Interpretations in History
The largest body of contract law. Open to interpretation and dispute. 

Four (4) main schools of thought (all Sunni Schools):

  • Hanafi (Pakistan,...)
  • Shafii (Far East)
  • Maliki (North Africa,...)
  • Hanbali (Saudi,...)

IJMA - Community Consensus

IJTIHAD - Personal Judgement

QIYAS - Reasoning and Debate (Shari'a Scholars)