Islamic banking and Islamic Financial Market

The model of Islamic Banking, whose theoretical and practical development chronologically belongs to the period after the World War II, can be justifiably considered as a phenomenon based on the principles notably different in comparison with the dominant model of banking organization and operating throughout the world. In most Islamic countries, financial markets are either non-existent or have developed only to a limited extent. Government securities are traded only to a small degree, and those instruments which are marketed often carry riba. Equity markets are also underdeveloped, though from the point of view of Islamic financial institutions, such investments are of potentially greater interest than conventional government securities. The shares of specifically Islamic companies are quoted on the Cairo, Amman and Kuwait stock markets, and many of the other shares on offer could be considered as legitimates Islamic investments. The Islamic Financial Market includes banking, capital markets, and insurance that comply with shari¿a principles. Islamic finance is structured to avoid the following, which are all prohibited under shari'a: riba, maisir, and gharar.