Islamic finance core principles are driven by the individual's world view and the regulations and guidelines that are needed.

2. Individual’s
world view
The not for profit and
eternal motivation
The for profit and
worldly motivation
1.

3. not-for-
profit
motivation
Lending & debt
rescheduling
1.1

4. for-profit
motivation
Legitimate
trading
1.2

5. Implications of
core principle 1
Deferred (financial)
sales replace lending as
for profit financing

6. Deferred (financial)
sales
Price deferred sale
Object deferred sale
Object & price deferred sale
Asset is delivered price deferred for future payment
Price paid but asset deferred for future delivery
Payment of price and delivery of asset both deferred
for future

7. Financial sales should
be free from
contractual
ambiguities
Contractual ambiguity is the
characteristic of gambling and is
known as Gharar

8. Origins of contractual
ambiguities (Gharar) that
must be eliminated
Ambiguity in time of delivery
Ambiguity in existence of the deliverable
Ambiguity in price of the deliverable
Ambiguity in quantity of the
deliverable
Ambiguity in nature and
specification of the
deliverable

9. ownership
risks and benefits
are Intertwined
Commercial lending violates this principle &
separates risks and benefits of ownership &
transfers risks to borrower, benefits to lender
The principal amount of funds invested and profit
rate cannot be guaranteed
In joint ownership or agency relationship the risks
and benefits must be shared

10. Adherence to
prohibitions3
Riba (Interest); commercial lending and debt
rescheduling
Deferred sale of money and debts
Alcohol, pornography and mind corrupting
products and services
Gambling, selling what is not owned
(derivatives) and ambiguities (Gharar) existing in
contracts

11. Documentation
and transparency

12. Moral screening and
internal regulation for
Shariah compliance
5

13. Time and value
of money6
In deferred sales the price can be higher
can than the spot price for consideration of
time
Loan and debt rescheduling are charitable in
nature and the value of money in
consideration of time becomes irrelevant

14. Innovation and
renovation7
All what is not
expressly prohibited
is permitted