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Similarly, scarcity of any thing creates problems in life. Keeping this in view, Islam talks of a middle path. Islamic banking refers to a banking activity consistent with the rules and regulations of Islamic law and its practical application through the development of Islamic economics, according to which sale of such goods as are prohibited by Islamic doctrine is not allowed. Islamic banking also prohibits such investments as are contrary to the tenets of Islam. Islamic banking also puts restrictions on risky bidding of any kind. Basically, bidding includes such operations which, by chance or for exploitive purposes, involve money. There is a similar restriction on 'trading in risk,' technically called bayual-gharar. However, there is some difference of opinion as to what exactly gharar is. This work attempts to explain Islamic banking in a comprehensive and precise manner that would add to the existing literature on the subject. Hopefully, it would win the appreciation of readers.