Principles and Instruments of Islamic Financial Institutions

AbstractIslamic financial institutions are part of the modern world economy and subject to the same economic laws as any other traditional financial market participants. Statesmen and traditional banks see a promising business opportunity in Islamic banking and finance. The mechanism of Islamic capital market is differs from the well-known. Economic agents are guided not only by legal rules but also by the rules prescribed in the Holy Scripture, the Quran. Islamic finance provides a variety of financial products. The main instruments of financing used by Islamic financial institutions have some distinctive features: estimating the value of any asset on the basis of its real value, every contract is concluded exclusively on one type of financial services, a clear definition of the prices of goods/services, a clear definition of the share of each partner in profit/loss