Islamic banking models are based on asset and business ownership and the responsibilities and risks involved; there is a heavy reliance on understanding the general and specific business environments in which they operate. They also need to monitor and manage their various partnership businesses to ensure the strict observance of Shari’a law in business activities.

Islamic finance differs from conventional finance in that it is based on a profit-and-loss-sharing principle.

An Islamic finance does not charge interest but rather participates in the yield resulting from the use of funds. The Islamic financial provider uses the depositors’ funds to invest in business projects and then these depositors share in the profits of such investment according to a predetermined ratio. There is thus a partnership between the Islamic financial provider and its depositors on one side, and between the Islamic financial provider and its investment clients on the other side. The Islamic financial provider plays the role of financial mediator for the productive benefits of the community. A Hadith of the Prophet, "Allah's hand is over two-partners as long as one of them does not cheat the other, but when he cheats his partner, He withdraws it from both”.

Islamic finance contracts should be clear and free from:

• Jahalah (Ignorance)
• Gharar (Uncertainty in the contractual obligation)
• Debt trading
• Short selling