Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

Skip to content
Home » How many types of Islamic banking are there?

How many types of Islamic banking are there?

Islamic banking, rooted in Sharia law principles, offers financial services that comply with Islamic ethics. There are various types of Islamic banking, each with its unique features. One of the prominent types is Musharaka, which involves a partnership where both parties contribute capital and share profits and losses. Mudaraba is another form, wherein one party provides capital, and the other party manages it, sharing profits based on a pre-agreed ratio while bearing losses alone.

Murabaha is a prevalent Islamic financing structure, resembling a cost-plus sale. In this arrangement, the bank purchases the desired item and sells it to the customer at a marked-up price, allowing the buyer to pay in installments. Musawama is a type of trading where the seller and buyer negotiate the price without disclosing the seller’s cost. Additionally, Islamic banking includes leasing, where the bank purchases an asset and leases it to the customer for a predetermined period.

Salam and Istisna are other forms of Islamic financing. Salam involves advance payment for goods to be delivered at a future date, providing liquidity to the seller. Istisna, on the other hand, is a contract for manufacturing goods where the buyer specifies the details and pays progressively as the work progresses. Each of these types of Islamic banking serves specific financial needs while adhering to Islamic principles.

(Response: There are seven main types of Islamic banking, including Musharaka, Mudaraba, Murabaha, Musawama, Leasing, Salam, and Istisna.)