Islamic banking , principles and relevance to the UAE

Islmaic banking / principles
Its a banking system, which is based on the sharia "Islamic Law"and guided by Islamic economics.

The islamic banking must operate within the framework of the religion which is based on the Quran and sunna, meaning only halal activities is allowed. which hold ethics paramount and some activities forbidden to muslims are liquor , gambling and interest.
interest is knows as reba is forbidden is islam that means all banking activities must avoid it. another principles is based on profit sharing partnership between two sides involved in a transaction. so the two basics principles are sharing of profit and loss and the prohibition of payment and collection of interest.

Islamic banking vs Conventional banking
Conventional banks use fund from depositors and pay interest , aw well as they lend funds to borrowers and charge then interest.
Islamic banks however, accept deposits in the basis of profit and loss sharing between the bank and the depositors, either by Murabaha or Musharaka.
funds are invested in the basis of Ijarah, Murabaha , musharaka, Salam etc.
The income that they earn is shared in a pre agreed sharing ration and the loss os shared in the ratio of despots and equity investments.

Relevance to the UAE
The use has we know have a lot f investments , businesses and diversification going on in every aspect,on top of that its a muslim country with a lot of individuals who sep halal business and banking. which led the UAE islamic banking sector to grow and become in some cases better than the conventional ones we have in the county. having islamic banks help reduce the risk of the collapse, which happened to the world economy because it has been proven that islamic banking systems are less risky and safer than conventional systems. so far islamic banks have been very successful in the country and is important to the UAE as the government itself owns some of them.