Basis of the investment upon which Islamic banks are based

Investment is of the most prominent aspects of economic activity that received considerable attention by economists because of its great role in money investment and establishing various production projects.

Because Islamic banks are for investment and development, we had to pause with the basis of investment and the fundamentals of Islamic banking.

Investment is defined as "a financial contract that achieves additional money in the future. Furthermore, the production process by which companies and foundations get various goods or services to ensure their continuity."

Based on this definition, we notice the absence of the disciplinary role and investment values in the various investment processes. Therefore, Islamic banks came to show the importance of investment and to put an end to the false practices which are not in harmony with the Islamic Shari`ah. Hence, it focused on the following:

• Not to investment in projects prohibited by the Shari`ah because they harm individuals as well as the society. We notice that Islamic banks are keen to watch the activity and the profit of all projects, in addition to subjecting the project to a Shari`ah committee that approves the project if it is in harmony with the Shari`ah and disapprove it if it contradicts the Shari`ah rulings.

• Caring for general development, operation, and solving the general economic problems without focusing on the profits gained by investors. In this context, we observe the interest of Islamic banks' owners to benefit from the studies presented by the staff, the technical and environmental matters, and the investment revenues and whether they are in harmony or not with the developmental strategy of the state. An Islamic bank may suggest projects that a county needs which may be labor-intensive and less capital in case if there is unemployment or directing towards education projects if there is a high illiteracy percentage.

Hence, the only important aspect of investment is economic and social development in addition to achieving a suitable profit margin.

We notice that Islamic banks consider investment as the basic motivation for community development and getting rid of social and economic problems through employment and operation of available resources, such as money and individuals.

On the other hand, the basis of investment in Islamic banks focuses on the principle of profit and loss, in addition to avoiding the interest rate that is found in other traditional banks that are based on the concept of guarantee and taking advantage of others.