The article discusses Islamic banking, its theory, practice, and challenges. It covers various aspects such as the framework of Islamic finance, experiences of Islamic banks in different countries, derivatives, comparative analysis of financial statements, and challenges faced by Islamic banks. The main goal is to provide insights into the functioning of Islamic banking and highlight important considerations before engaging in Islamic transactions. Key findings include the experiences of Islamic banks in different countries, challenges in developing Islamic secondary market instruments, and the importance of understanding the differences between Islamic and non-Islamic banks.