Money has taken many different forms throughout history, and human relations with the economy have developed considerably over time. Anthropological studies of money aim to illustrate our interactions with these financial networks. A financial network is a collection of financial institutions and the relationships that exist between them, preferably through direct transactions or the ability to mediate a transaction. These transactions are made possible by the Islamic banking and financial approach, which I will use to refer to financial transactions that adhere to Sharia, Islamic religious law.

Islamic banking, often referred to as Islamic finance or Sharia compliant finance, refers to financial or banking transactions that comply with Islamic religious laws. In traditional Western banking, banks borrow money in the form of deposits and lend that money to earn interest. However, Islamic banking has two basic principles that contradict this practice. The first principle is the sharing of profits and losses. The second prohibits lenders and investors from collecting or paying interest.

Researcher Bill Maurer has conducted a critical analysis of Islamic banking and finance, which has become a global phenomenon. (The main centers of these global financial operations are in Iran, Saudi Arabia, and Malaysia, as well as Europe, Switzerland, and the UK.) Islamic banks have a very short history. The first bank was established in Egypt in 1963, in the years leading up to the partition that divided British India into two independent dominions, and arose out of the anti-colonial mission of Islamic modernists on the Indian subcontinent. Maulana Maududi, an Islamic scholar, aimed to build a new type of economy that would modernize Islam and challenge Western domination. Modernists attempted to theorize an economy that provided for a redistribution of wealth and was not dependent on interest-bearing debt. They hoped that this new economic structure would meet the needs of modern society while remaining faithful to the Sharia and the Koran.

Like the Christian Bible, there is only one Quran, yet this holy book has many interpretations. As a result, different types of Islam can take on an assortment of different meanings from the text, even within the same state. However, some of the ideals of the Quran are global, contributing to the universality of Islam. This has been built and strengthened by the products and services that Islamic banks around the world provide.

The function of the bank in Islamic banking is not to make money for itself or to increase the income of clients, but to encourage entrepreneurship and local development. Money has no intrinsic value and cannot be multiplied by just spinning it – the “money produces money” rule does not apply in Islam. On the contrary, Islamic banking is based on partnership: shareholders, depositors and borrowers share all the profits and losses. The main reasons why the Islamic economy is structured in this way are the duties to pay zakat, translated as “gifts” or “charity”, and avoid riba, “interest” or “usury”. Riba is a fundamental regulation in the Islamic financial system. It is about keeping a percentage of a loan or granting loans at interest and is fully concerned with social justice. An example of social justice is when a bank gives loans to companies for investments and the companies want to make a profit. In this case, neither the bank nor the consumer has a competitive advantage. As a result, both partners bear the expense of the failing business, and the bank must also take a risk.

Regulations against gharar, which are linked to risky sales or gambling, are also essential in this system. For example, you cannot sell an item or merchandise that has not yet been manufactured; the product you are selling must exist. You also can’t sell a product until you have it. All Islamic banking products must be monitored and recognized by the Council of Islamic Banks, as well as lawyers and clerics.

Murabaha is the most common commodity in Islamic banking. This is a form of sale in which the bank buys a specific product, or has already purchased one from the consumer, and specifies the precise amount spent on it. This way the bank and the consumer are aware of what is going on and what is being sold. There is an additional profit, but this profit is obvious and negotiated by both parties. There are some crucial guidelines to follow here. As stated previously, the product must exist. A legitimate contract must exist, indicating any defective elements, and it must be immediate, absolute and unconditional.

Islamic banking shows how laws and religious ideals can be translated into practical solutions in everyday life. Everything in the Islamic banking system must adhere to Sharia, both for what is permitted (halal) and prohibited (haram). The bank is not able to invest its funds in products, services or areas prohibited by Islam. Customers of an Islamic bank can be sure that their money will not be invested in the manufacture or trafficking of alcohol, nicotine, drugs, or pornography, for example, or in casinos or nightclubs. Islamic banks also do not offer bonds. Because keeping a percentage is unfair, it is strongly related to riba.

In relation to Islamic financing, Western accounting methods face three challenges: the thin line between bank owners and corporations, the separation of bank management from bank ownership, and the growing interweaving of bank shareholders. banks and bank managers. Islamic banks create jobs, generate income, and promote economic growth and social stability.

The analysis of Islamic banking and finance illustrates how financial networks are implemented in different societies. Our understanding of money is impacted, not only by Western countries, but also by non-Western societies, whose religious and cultural values ​​have had significant impacts on their economies and ours.