The Arab Banking System

 
Picture retrieved from: http://www.worldpoliticsreview.com

In the Arab speaking countries, banking is based on the Islamic law: SHARIA, called fiqh muamalat, which means: Islamic rules on transactions, and came from various sources like: the Quran.

All Islamic banks, for instance, have established Sharian Committees or Sharian Advice Councils that have the assignment of making sure their system functions in accordance with the Sharian concepts.

Some of these concepts are:  

1. Wadiah: "free safekeeping of money and easy access to withdrawals whenever needed".
Retrieved from http://www.bankislam.com.my/Wadiah.aspx 

2. Mudharabah: "profit sharing" between an investor and an entrepreneur, where the funds can be supplied or loaned by the bank (it can be investor or entrepreneur), but both of them will enjoy the profit gained.
Retrieved from http://www.bankislam.com.my/Mudharabah.aspx  

3. Ijarah Thumma Bai': "to hire and subsequently purchase assets, either for individual or corporate customers". The bank buys an asset for you and then leases it to you over a period in which you pay rentals; later, when the period ends, you should buy this asset. 
Retrieved from http://www.bankislam.com.my/Hire Purchase-i.aspx  

4. Hibah: "gift", in this case "payment in return of a benefit received" like, for example, giving incentives to customers who make their monthly payment on time.

Retrieved from http://www.bnm.gov.my/microsites/financial/pdf/resolutions/07 hibah.aspx  

5. Qard: "interest-free loan, where "the borrower is only obligated to repay back the principal amount of the loan". 
Retrieved from http://www.albaraka.com.pk/glossary/qs.php  

In general, we may notice Arab Banking is strictly attached to Islamic religion and moral principles.