Islamic Banking Principles and Risk Sharing

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What is the concept that differentiates Islamic banks from conventional banks?

Sharing of risks and rewards (correct)

Postponement of consumption

Fixed interest payments

Hoarding of money

What is prohibited in Islamic financial transactions?

Equity participation

Gharar (uncertainties) and maysir (gambling) (correct)

Fixed interest payments

Risk sharing

What is money considered as in Islamic banking principles?

A reward for postponing consumption

A commodity with inherent value

Potential capital (correct)

A means of speculation

What is the primary objective of Islamic banking?

To stimulate the economy Signup and view all the answers

What is the Islamic perspective on the time value of money?

It is recognized only when money acts as capital Signup and view all the answers

What is the belief underlying Islamic financing?

Financier and borrower should equally share the risk Signup and view all the answers

What is the primary objective of establishing Islamic banks?

To spread economic prosperity within the framework of Islam Signup and view all the answers

What is the only type of loan allowed in Islam?

Qardhul Hassan (Benevolent loan) Signup and view all the answers

What is the primary objective of Islamic banks, despite their differences from conventional banks?

To make a profit Signup and view all the answers

In Islamic banking, what is the role of suppliers of funds?

They become investors Signup and view all the answers

What is the central principle of Islamic economics that emphasizes mutual responsibility and social balance?

Socio-economic Justice and Equitable Distribution Signup and view all the answers

What is the Islamic principle that prohibits gaining ownership through fraud, deceit, theft, or other falsehoods?

Trusteeship Signup and view all the answers

Which of the following is NOT a principle of Islamic economics?

Interest-based lending Signup and view all the answers

What is the Islamic principle that requires partial acceptance of liability for risk in financial ventures?

The Duality of Risk Signup and view all the answers

What is the approach of Islamic banking towards economic development?

Optimistic approach Signup and view all the answers

What is the significance of Riba prohibition in Islamic banking?

It prohibits any advantage or benefit to the lender Signup and view all the answers

What is the underlying principle of Islamic banking in terms of resource allocation?

Optimum resource allocation Signup and view all the answers

What is the Islamic financing model that involves a levy of 2.5% of personal wealth?

Zakat Signup and view all the answers