Islamic Banking Business is defined as being any financial business; the aims and operations of which are, in addition to the conventional good governance and risk management rules, in consonance with the ethos and value system of Islam. Islamic banking does not permit the charging of interest as it is based on Sharia Law as well as the prohibition of certain products such as alcohol, armaments or pork, as well as activities such as gambling, entertainment and hotels.
The principles of Sharia law are applied to financial services in varying ways. With regards to deposit accounts for example, rather than earning interest, savers share in the profits and losses made by the institution from the use of this money. When it comes to mortgages, as it is against Islamic law to receive or pay interest, prospective homeowners may enter into a lease agreement with their lender. It is important to note that Islamic finance is open to both Muslims and non-Muslims.
Banks in Mauritius are provided with a single banking license which entitles them to conduct both domestic and international transactions, and transact in all currencies. Mauritius has the jurisdiction’s low set up and operating costs, which are relatively lower than any other jurisdiction of repute. The combination of fiscal and non-fiscal factors has also made Mauritius a very attractive jurisdiction to structure Islamic products.
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