Basic Islamic Framework
Where do the rules of Islamic economy come from?
Muslims strive to lead their lives based on Islamic principles.
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Islamic principles of economics and trade come from these sources:
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The Holy Quran
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Teachings of Prophet Muhammed (peace be upon him)
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Understanding of the pious predecessors (the first 3 generations, called the ‘salaf’)
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Consensus of Muslim jurists
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What kind of transactions are allowed in Islam?
Business and trade transactions that comply with the basic Islamic principles, such as:
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Fairness
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Justice
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Maintaining balance
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Providing equal opportunities
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Sharing profits and losses
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Transactions based on tangible assets
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Social responsibility
What kind of transactions are prohibited in Islam?
In Islam, there are several transactions forbidden, including but not limited to:
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Usury (called Riba in the Quran)
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Gambling
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Hoarding wealth
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Dealing in unlawful goods or services (like intoxicants, pork)
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Short sales (ones with excessive or unreasonable risk)
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Transactions that have uncertainty or ambiguity
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Exploitation