how do islamic banks make money 
to earn money without the typical practice of charging interest islamic banks use equity participation systems which are similar to profit sharing equity participation means if a bank lends money to a business the business will pay back the loan without interest and instead give the bank a share in its profits if the business defaults or doesn t earn a profit then the bank also doesn t get paid the bottom lineislamic banking is also referred to as islamic finance or shariah compliant finance it refers to finance or banking activities that comply with islamic law there are many differences between islamic and mainstream finance but two of the most important are the methods of sharing profit and loss and the prohibition of the collection and payment of interest by lenders and investors shariah also prohibits taking interest on loans islamic banks make a profit through equity participation which requires a borrower to give the bank a share in their profits rather than paying interest 