Islamic banking, Islamic finance, or Sharia-compliant finance is banking or financing activity that complies with Sharia and its practical application through the development of Islamic economics. Some of the modes of Islamic finance include mudarabah, wadiah (safekeeping), musharaka, murabahah (cost-plus), and ijarah (leasing).

Sharia is a body of religious law that forms a part of the Islamic tradition based on scriptures of Islam, particularly the Quran and hadith. In Arabic, the term sharīʿah refers to God's immutable divine law and this referencing is contrasted with fiqh, which refers to its interpretations by Islamic scholars. Fiqh, practical application side of sharia in a sense, was elaborated over the centuries by legal opinions issued by qualified jurists and sharia has never been the sole valid legal system in Islam historically; it has always been used alongside customary law from the beginning, and applied in courts by ruler-appointed judges, integrated with various economic, criminal and administrative laws issued by Muslim rulers.