1. Transparency: Transparency is a key ethical principle in Islamic finance. Financial professionals working in Islamic banks should ensure that all transactions and investments are transparent and fully disclosed to customers. One example of transparency is providing detailed information on the profit-sharing ratios for investment accounts, so customers are fully aware of how their money is being managed.
2. Honesty: Honesty is another important ethical principle in Islamic finance. Financial professionals should always provide honest information to customers and avoid withholding or manipulating information for personal gain. For example, when advising customers on investment opportunities, financial professionals should disclose any potential risks or drawbacks, even if it may result in lower commissions or fees.
3. Fairness: Fairness is a core principle in Islamic finance, and financial professionals should ensure that all transactions are conducted in a fair and just manner. For example, when setting profit-sharing ratios for investment accounts, financial professionals should ensure that they are equitable and do not unfairly favor one party over another.
4. Avoiding interest (Riba): Riba, or interest, is strictly prohibited in Islamic finance. Financial professionals working in Islamic banks should adhere to this principle and avoid any transactions or investments that involve interest. This includes avoiding traditional loans with interest charges and instead, offering profit-sharing investment accounts that comply with Islamic principles.
5. Social responsibility: Financial professionals working in Islamic banks should also prioritize social responsibility and consider the impact of their actions on society and the environment. This may include supporting charitable initiatives, promoting environmental sustainability, and adhering to ethical business practices that benefit the community as a whole. For example, Islamic banks may invest in socially responsible projects that promote economic development and create positive social impact.
Ethical banking involves consciousness of how banking practices affect society and the
environment. Financial institutions that emphasize ethical practices seek profit like any other
financial institution. However, they strive to generate earnings without sacrificing principles
or causing harm.
Discuss any FIVE (5) best ethics that should be performed by the financial person who works
in Islamic financial system. You need to give examples in explaining it.
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1 answer