Introduction to Islam
As a fully inclusive bank, we are keen for our non-Muslim customers to understand more about Islam, and Islamic finance’s place within it.
An Introduction to Islam
Islam was revealed over 1,400 years ago as a way of life for its followers. Islam is an Arabic word meaning submission, representing a Muslim’s submission to Allah, or God.
For the world’s 1.6 billion Muslims, Islam comes after Christianity and Judaism, and is the final religion for all of humanity. The Quran is the Islamic holy book and the Prophet Muhammad (Peace be Upon Him - pbuh) is the messenger of Islam, considered the last in a line of prophets including Abraham, Moses and Jesus.
The Islamic faith is built upon five pillars. These are:
- Shahadah: bearing witness to the oneness of God
- Salat: performing ritual prayers five times each day
- Sawm: fasting during the month of Ramadan
- Zakat: paying an alms (or charity) tax to benefit the poor and the needy
- Hajj: pilgrimage to Mecca
In addition to these pillars, Muslims follow the Sharia, the body of Islamic law. It provides a framework for all aspects of life, including eating and drinking, finances, marriage, divorce, death and inheritance, taxes, trade, crime and punishment.
The Sharia is derived from the Quran, the Sunnah, which is the established practice of the prophet Muhammad (pbuh), and the rulings of Islamic scholars who are highly educated in Islamic law and jurisprudence.
The significance of Islamic finance
An important element of the Sharia is the prohibition of interest, or Riba. It is explicitly forbidden for Muslims and this is stated in the Quran and the Sunnah several times. For example, in Chapter 3, verses 130-137 of the Quran (Surat 'Al Imran), Allah says,
O you who have believed, do not consume usury, doubled and multiplied, but fear Allah that you may be successful."
Islamic finance, therefore, exists to help Muslims avoid interest as part of their daily lives. It is based on principles contained within Islamic Commercial Law, with trading activities and real assets forming its foundations.
This has led to the development of a range of Islamic finance products which allow its users to save, buy property and secure business financing in a way that is permitted within Islam. The underlying principles of Islamic finance can be compared to those of socially responsible investing, making it suitable for consumers of all faiths and beliefs.