Islam is a way of life that contains a code of laws and ethics that seeks to maximize the benefit and minimize the harms to individuals and society with particular emphasis on the universal values of the protection of religion, life, intellect, family, and wealth. The teachings of Islam are enshrined in Islamic law called the Shariah, which is based on the teachings of the Quran, Islam’s Holy Book and on the life of the Prophet Muhammad, peace be upon him.
Shariah places restrictions on the types of finance and investments that are allowed. Islamic finance can be defined as the body of financial contracts and rules that have been adopted from the rich heritage of scholarly research in the Islamic law of transactions and modified to comply with the modern economy and financial systems. In Islam, money must be used in a productive way, and generating returns on money must be through legitimate trade, services or joint-ventures. Generating interest on money is seen as income through exploitation and is prohibited. Shariah also does not permit trade or investment in unethical industries or commodities, such as arms, gambling, alcohol, interest-based finance, non-halal food or beverages, non-Halal entertainment and more.