Modes of financing
In recent times, Islamic financing services have increased phenomenally around the world. Islamic banks offer now, to their clients, different modes to investment their money and finance their projects. These modes include solutions for short, medium, and long-term project-financing and investments.and-loss-sharing is the most common mode proposed by Islamic banks for import financing, pre-shipment export financing, working capital financing and financing of all single transactions. This mode could also be used in the case of socio-economic projects such as infrastructure projects. PLS instruments include Mudaraba, an equity participation contract under which one of the parties participates with capital and the other with know-how. If the project ends in profit they share the profit in a pre-arranged proportion and if it results in loss the entire loss is borne by the financier, and the entrepreneur gains no benefit out of his effort, which was his part of the investment. PLS instruments also include Musharaka, an equity participation contract under which a bank and its client contribute jointly to finance a project. Ownership is distributed according to each party's share in the financing. Besides, Islamic banks propose non-PLS modes of investment that include Shari'ah acceptable forms of trade and leasing. Murabaha, salam and Istinasa are the most known Trade-based techniques. Murabaha is a purchase and resale contract in which an asset is purchased by the bank for its customer, with the resale price determined based on cost plus profit mark-up. As opposite to Murabaha, Salam is a purchase contract with deferred delivery of goods. While, Istisna is a medium-term contract, whereby the manufacturer, or the seller, agrees to provide the buyer with described goods after they have been manufactured within a certain time and for an agreed price. , leasing-related financing, Islamic banks agree to purchase and maintain the assets and afterwards dispose of them according to Shariah rules. Ijara, for example, is a leasing contract whereby a party leases an asset for a specified rent and term. The bank bears all risks associated with ownership., Islamic banks could use other schemes of financing such as the investment deposit scheme that provides investors with an Islamic alternative to making short-term investments by participating in the financing activities of the Bank. Under this scheme, the Bank accepts deposits from both individual and institutional investors for use in its Import Trade Financing Operations.
Banks adopt several modes of acquiring assets or financing projects. But they can be broadly categorized into three areas: investment, trade and lending. 
In the modern economic system, Islamic banks are mostly using the debt-creating modes of trade and leasing for their financing activities, while the main basis for mobilizing deposits from the public are the partnership modes of Musharakah and Mudarabah. Both modes belong to profit-and-loss sharing or the risk-sharing techniques involved in partnerships. If the financier wants to finance the whole project, the form of Mudarabah can come into operation. If investment comes from both sides, the form of Musharakah can be adopted.Islamic bank arranges Musharakah on the basis of a written agreement with the client for a specific transaction or project for a fixed period of time that can be renewed. It could be used to finance industry, trade, real estate, contracting and almost all legal enterprises through partnership. A Musharakah business or its assets can also be securitised by selling Musharakah Certificates in the market. The Musharakah Certificate represents the ownership of the holder in a proportion of the assets of the project. It could be sold in the marker only if it represents non-liquid assets. If the certificate only represents a proportion of liquid assets of the project; it could not be sold in the market except, as it could be assimilated to a trade of money and thus would be similar to Riba.addition, the returns of the Islamic bank in Musharakah have been tied up with the actual profits accrued through the enterprise. Thus the client is required to provide the bank periodically with the results of operations of the business. The bank should also share the losses of the business. And if the enterprise earns enormous profits, all of it cannot be secured by the industrialist exclusively, but they will be shared by the common people as depositors in the bank. And since financial institutions do not normally want to remain partner of a specific project for good, they can sell their share to other partners of the project as aforesaid. is another agreement between the Islamic bank and an entrepreneur, whereby the entrepreneur can mobilize the funds of the bank for its business activity. It is considered as the basis of Islamic banking in the sense that funds are mobilized by banking and non-banking financial institutions mainly under this kind of partnership. The bank acts as a mudarib for the savers and investors and as financier for the entrepreneurs. If the bank employs the clients deposits without committing any of its own, it acts as mudarib for the client until the conclusion of the business transaction for which the funds were invested; whereas the entrepreneur provides his expertise, labor and management of the project. Profits made are shared between the bank and the entrepreneur according to predetermined ratio. In case of loss, the bank loses the capital, while the entrepreneur loses his provision of labor. It is this financial risk, according to the Shariah, that justifies the bank's claim to part of the profit. The profit-sharing continues until the loan is repaid. The bank is compensated for the time value of its money in the form of a floating rate that is pegged to the debtor's profits. Its liability mudarabah is limited to the amount of capital provided and the creditors of a mudarabah have no recourse to other assets of the Islamic bank. Financial institutions can also mobilize funds for investment by issuing negotiable investment instruments called Mudarabah Certificates; they represent ownership in the funds collected. It would distribute a percentage of the profit earned from the investment of those funds on Mudarabah principles. Mudarabah Certificates are registered in the name of their owners in proportion to the each ones share therein. A Mudarabah Sukuk can also be issued on the Mudarabah principle.addition, Islamic banks can use Mudarabah to finance import trade o