Islamic banking is a system of conducting business activities in line with the principles of Islamic Shari’a’. It follows the rules and provisions of Islamic jurisprudence pertaining to trade and business, so-called fiqhal muamalat (Islamic rules on transactions.
Islamic banking avoids all the prohibited activities such as riba (usury-interest), gharar (uncertainty), financing of haram (forbidden) trades & businesses like alcoholic beverages, pornography, gambling, etc.