Islamic Banking Terms - What They Mean

THE Al Quran clearly states that Muslims cannot make money on money. Chapter 2, Verses 278 and 279 of the Al Quran are specific:

"O ye who believe! Fear Allah, and give up what remains of your demand for usury, if ye are indeed believers. If ye do it not, Take notice of war from Allah and His Messenger: But if ye turn back, ye shall have your capital sums: Deal not unjustly, and ye shall not be dealt with unjustly."

But this does not mean that Islam forbids business activities or making profits. The Prophet Mohammed SAW himself was a trader early in his life.

Islamic law allows business activities for as long as they do not involve interest, also commonly called 'riba', in any form.