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Islamic Banking

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Because the Qur'an spoke against usury, Islamic Banking aims at removing or redefining interest rates from financial institutions.

In Islamic banking, the lost time value of money is compensated by charging a mark-up on the asset that is financed.

The asset usually remains in the name of the bank, until the principal loan including the mark-up has been paid.

In the case of a business loan, instead of charging interest, an Islamic bank will require a certain percentage of the borrower's business profits to be paid to the bank for an indefinite period of time.

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