The definition of Islamic banking is a banking system that adheres to Islamic ethos, principles, and values and is governed by Islamic law or Shariah. A limited definition of interest-free banking is the set of financial products or services that do not charge interest. Islamic banking, the more generic term, is predicated on avoiding unethical and unsocial practices in addition to interest-based transactions, which are forbidden by Islamic law or Shariah. Islamic banking, in a practical sense, is the conversion of traditional financing into transactions based on actual goods and services. The Islamic banking system’s design points in the direction of a system that promotes economic development.