Author: Ahmedov, Sh.S; Azimova, N.S.

Annotation: This article examines the fundamental concepts and principles of Islamic finance—a financial system governed by Sharia (Islamic law), which prohibits interest (riba), excessive uncertainty (gharar), gambling (maysir), and economically harmful activities. Islamic finance emphasizes fairness, transparency, and risk sharing, ensuring that transactions are supported by real economic activity. The article provides an overview of the modern development of Islamic banking since the mid-20th century in countries such as Malaysia, Sudan, and the UAE, highlighting its growing role in the global financial system. It defines and analyzes the main Islamic finance contracts—murabaha, musharakah, muzaraba, ijara, salam, and istisna—and examines how profitability is combined with social responsibility and sustainability. The study emphasizes the relevance of Islamic finance as an ethical, sustainable, and stable alternative to conventional financial systems. This article examines the principles and terminology of Islamic finance—a financial system governed by Shariah (Islamic law), which prohibits interest (riba), excessive uncertainty (gharar), gambling (maysir), and harmful economic activity. By emphasizing fairness, transparency, and risk sharing, Islamic finance ensures that transactions are underpinned by real economic activity. The article provides an overview of its modern development, which began with the establishment of Islamic banks in countries such as Malaysia, Sudan, and the UAE in the mid-20th century, and highlights its growing role in the global financial system. Key concepts and contracts, such as murabaha, musharakah, muzaraba, ijara, salam, and istisna, are defined and analyzed to illustrate how Islamic finance combines profitability with social responsibility and sustainability. The study highlights the relevance of Islamic finance as an ethical, sustainable, and stable alternative to conventional financial systems.

Keywords: Islamic finance; Sharia; ethical finance; sustainable finance; Islamic banking; financial contracts.

Pages in journal: 163 - 171