When discovering the city, you’ll see signs for Islamic banks. The word Islamic Banking doesn’t mean they’re exclusively for Muslims, as everyone is welcome to bank there. Modern Islamic banking is based on profit-sharing between borrower and lender. No interest is charged for borrowing money. The Arabic term for this is Riba. Allow me to clarify how loans work under this system. Instead of just giving you money to buy a car or house, the lender would really buy the car or your house and sell it to you in a slightly higher cost, which you pay in installments. The bank isn’t permitted to charge for overdue payments or increase the amount you are going to pay.
There are over 300 Islamic banks in over 50 nations and even western financial institutions offering Islamic choices. In actuality, the first modern Islamic bank opened right here in Dubai in 1975. Much of contemporary capitalism originated in the Islamic Golden Age (the 8th to 13th centuries) when concepts like mudaraba (speculation) and waqf (endowment) were introduced.