Write a detailed note on Islamic Banking.

Islamic Banking or Sharia - Compliant Finance is banking or financing activity that complies with sharia (Islamic law) and its practical application through the development of Islamic economics. Some of the modes of Islamic banking/finance include Mudarabah (Profit sharing and loss bearing), Wadiah (safekeeping), Musharaka (joint venture), Murabahah (cost plus), and Ijara (leasing). Sharia prohibits riba, or usury, defined as interest paid on all loans (although some Muslims dispute whether there is a consensus that interest is equivalent to riba). Investment in businesses that provide goods or services considered contrary to Islamic principles (e.g. pork or alcohol) is also haraam (sinful). Islamic Banks work on the principles of an interest free banking. Riba or interest under Islamic Law basically means anything in "excess" - the investor should not make an "undue" profit from the hard work of the other. Islamic banks make available accounts which provide profit or loss instead of interest rates. The banks use this money collected by them and invest in something that is shari at compliant, that is not haraam and does not involve high risks.