Islamic Ethics & Finance
Business conduct, professional ethics, and Islamic finance principles grounded in Quran and Sunnah.
Islamic Business Ethics
Core Values in Commerce
“The truthful, honest merchant is with the Prophets, the truthful, and the martyrs.” — Jami’ al-Tirmidhi, Hadith 1209
| Value | Application |
|---|---|
| Sidq (Truthfulness) | Honest description of goods, no false advertising |
| Amanah (Trustworthiness) | Fulfilling contracts, protecting client interests |
| Adl (Justice) | Fair pricing, fair wages, no exploitation |
| Ihsan (Excellence) | Going beyond the minimum; quality in all work |
| Tawadu’ (Humility) | No arrogance in success, gratitude in hardship |
Prohibited Business Practices
- Riba — usury/interest (strictly forbidden, Quran 2:275-279)
- Gharar — excessive uncertainty or ambiguity in contracts
- Maysir — gambling and speculation-based transactions
- Ghish — fraud and deception
- Ihtikar — hoarding to artificially inflate prices
Islamic Finance
Key Instruments
| Instrument | Type | Description |
|---|---|---|
| Murabahah | Sale | Cost-plus financing; bank buys then sells at declared profit |
| Ijarah | Lease | Islamic leasing/rental arrangement |
| Musharakah | Partnership | Shared ownership and profit/loss |
| Mudarabah | Investment | One party provides capital, other provides expertise; profits shared |
| Sukuk | Bond equivalent | Asset-backed certificates; no interest |
| Takaful | Insurance | Cooperative mutual guarantee; replaces conventional insurance |
AAOIFI Standards
The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) sets globally recognized standards for Islamic finance.
References
- Al-Quran, Surah al-Baqarah 2:275–279 (on Riba).
- Ibn Rushd. Bidayat al-Mujtahid (The Distinguished Jurist’s Primer).
- AAOIFI. Shari’ah Standards. https://aaoifi.com
- Usmani, M.T. An Introduction to Islamic Finance. Maktaba Ma’ariful Quran, 1999.
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