Islamic banks offer asset-backed financing. Islamic banks cannot process documents and this is due to their asset-backed nature, resulting in vibrant economic activities. Additionally, Islamic banks must comply with conventional regulatory standards as well as Shariah standards. Islamic banks do not do business with companies producing tobacco, alcohol or other dangerous toxic products. Islamic banks are not only interest-free. Islamic banking transactions must avoid other elements of fraud, deception and uncertainty. The Gharar-free nature of Islamic banking transactions implies that such complex conventional instruments as options and sub-securities are not permitted in Islamic banking. Additionally, own borrowing is not permitted in the Islamic banking system. Islamic banks provide finance to create assets. Therefore, Islamic banks do not offer credit cards, personal loans and financing/overdrafts. Islamic banking also does not allow trading in most derivative products. However, Salam and Istina are close alternatives to futures in conventional banking. Many risk management actions will be reflected in long-term business success, but business success is not just a criterion for risk management procedures. This is because commercial success depends on the quality of the product, its USPs, its effective marketing, its simplicity and, besides, the cultural, political and macroeconomic context in which the product is launched and marketed. According to Culp (2007), risk refers to future events whose outcome is uncertain and may involve the possibility that the organization will be impacted positively or consequently negatively by such events in terms of value. He further pointed out ...... middle of document ......d that there are already certain derivative instruments such as those of Salam and futures which have been developed keeping in mind the principles of Islamic banking and that further efforts are in order to develop such instruments which will be Shariah compliant and thus help these organizations to effectively use derivatives for hedging purposes and thus not lose out on not being able to apply such simple and practical tools which are extremely important in the current financial context of uncertainty and change and furthermore it can be stated that certain essential elements must be ensured by these organizations before such methods can be used and that one of the requirements most often expressed by Islamic finance today is that of developing derivative products. market and which allow these organizations to use their relatives to cover the risks.