Question

whats the key operating mechanisms of Islamic banking and finance ?

Answer 1

The main feature of Islamic banking is it is asset based and there is risk sharing

The Islamic banking operates according to Islamic rules, in which the depositors are getting a share of a income rather than interest ,the depositors money is invested in a specific project or business by the Islamic bank and the income arise from that is given to depositors in the form of share but there is risk sharing .

Islamic law prevent the interest, a SUKUK is an Islamic financial certificate which is similar to bond

The sukuk holder of a company receives profit but a bond holder gets a interest payments.

The Islamic banking growing so fast, this system allows every Muslim community to access the banking rather than old times so the number of access has been increased in a good manner.