Islamic banks are financial institutions that operate according to the principles of Islamic law, or Sharia. They avoid charging interest, which is considered usury, and instead focus on profit-sharing and risk-sharing arrangements. This means that customers can invest their money in projects, and both the bank and the customer share the profits or losses. These banks offer various services, including savings accounts, loans, and investment products, all structured to comply with Sharia guidelines. Common practices include Murabaha (cost-plus financing) and Mudarabah (profit-sharing), which ensure that transactions are ethical and beneficial for all parties involved.