Islamic Finance Agreement
Like the Islamic equivalent for short selling, a number of Islamic financial institutions have used down payment or Urbun as a Sharia-compliant alternative to the conventional call option. [Note 18] In this mode, the Islamic equivalent of the “Premium” option is called “down-payment” and the equivalent of the “strike price” is called “default price.”  According to Islamic finance critic El-Gamal, the Islamic finance industry has “synthesized Islamic versions of short and long selling options, put and call.”   (options are a “common form” of a derivative).  The Islamic financial equivalent of a conventional appeal option (in which the buyer has the right, but not the obligation to buy in the future shrub at a predefined price, and thus gets a profit if the price of the underlying asset rises above the predefined price) is called the sale of Urbun (down payment) in which the buyer has the right to cancel the sale by losing his down payment.   The Islamic equivalent of the “premium” in a conventional call option is called “down-payment” and the equivalent of the “strike price” is called “default price.” A put option (i.e. if the seller has the right, but not the obligation to sell at a predefined price at a given price at a given time in the future, and thus will benefit if the price of the underlying asset falls) is called “reverse urbun” in the world of Islamic finance.  Since Islamic finance is based on several restrictions and principles that do not exist in the conventional banking sector, specific financing agreements have been drawn up, in accordance with the following principles: the banking sector represents the bulk of the Islamic financial industry. Banking products are often classified in one of the three major categories two of them are “investment accounts”:[Note 47][Note 4] While the original supporters of the Islamic banking sector hoped, that the Profit Loss Sharing Group (PLS) would be the primary means of financing to replace interest rate loans, long-term financing through profit-sharing and loss-sharing mechanisms is “much riskier and more longer-term or medium-term loans from conventional banks. , according to critics such as economist Tarik M. Yousef.
 Musharaka al-Mutanaqisa (literally “partnership in decline”) is a popular financing method to finance large acquisitions, particularly housing construction. An agreement between Musharaka al-mutanaqisa includes, in addition to the partnership, two other Islamic contracts – ijarah (leasing from the client`s assets by the bank) and Bay (gradual sale of the bank`s participation to the customer).  While the banking sector has become essential to the function and development of our society, it has also brought a number of themes. One of the key roles of conventional banks is, for example, borrowing money and recouping it with interest. And while the investor is assured of a predetermined interest rate, the methods would argue for many that the conventional banking model leaves something to be desired. The modes of exploitation of the conventional banking system are based on “man-made” principles that aim to maximize profits (usually without restriction) and therefore do not take into account ethics and morality, which creates real problems for people who turn to the conventional banking system, because they have no control over conventional banks. , based on legal but unfair practices to make borrowers pay more. – that is, credit card holders encourage credit card holders to pay minimum payments so they can earn interest.