Islamic banking
Printed From: IslamiCity.org
Category: Religion - Islam
Forum Name: Islamic Finance
Forum Description: Islamic Finance
URL: https://www.islamicity.org/forum/forum_posts.asp?TID=33594
Printed Date: 25 April 2024 at 7:56am
Software Version: Web Wiz Forums 12.03 - http://www.webwizforums.com
Topic: Islamic banking
Posted By: Zohaib565
Subject: Islamic banking
Date Posted: 09 May 2015 at 12:42am
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As we all know conventional banking system is also called '' Fractional Banking reserve system'' as every bank put its fraction of money in State bank as the state bank is the lender of last resort. State bank in return give that bank money with some interest too. As interest 'RIBA' is haram in islam so how could an islamic bank deals with state bank??
or how they can work without taking interest or what should they do?? |
Replies:
Posted By: muffe
Date Posted: 16 June 2015 at 7:54am
| All banks also the Islamic ones are based on fractional reserve banking, i.e printing a piece of paper and calling it money. In terms of interest which is forbidden, Islamic banks use many different instruments like lease, Mudaraba, tawarruq, joint venture etc. Some are based on asset and the real economy, others are controversial and just mimicks conventional interest bearing instruments. |
Posted By: ISLAM HASHTAG
Date Posted: 28 August 2015 at 10:27pm
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I have a list of books,which are very easy to understand and explains Islamic banking in detail.One of the book is a workbook which teaches the practical implementation of Islamic Banking in all sphere.
Take a look,if this may answer your query.. http://islamhashtag.com/books-on-islamic-banking-and-islamic-finance/ - http://islamhashtag.com/books-on-islamic-banking-and-islamic-finance/ |
Posted By: Ceo3
Date Posted: 18 September 2016 at 11:57am
| Fractional reserve banking is counter to the Shariah. Islamic banking operates on a 100% deposit backing system. |
Posted By: Tim the plumber
Date Posted: 20 September 2016 at 1:25am
How does a depositer get paid for lending his money out? |
Ceo3 wrote:Posted By: Ceo3
Date Posted: 21 September 2016 at 12:39am
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The simplest example would be a fixed deposit. Say a client invest for a year in an Islamic Bank. The bank would utilise funds in profit and loss sharing ventures, investment in approved stocks and buying and selling in cost plus agreements. The profit on these endeavours would be shared amongst the depositors/bank on a pre-agreed upon ratio. Should there be no profits the depositor would not gain anything and only the deposited amount would be returned.
Important to note if we use the Malaysian banking system that on average interest rate returns are only 1% point above their Islamic banking counterparts. |
Posted By: Tim the plumber
Date Posted: 23 September 2016 at 12:57am
So you would be something like a shareholder in the bank. But nit get as much profit. A 1% difference between doing things in the usual way and doing them in an Islamic way is a lot. |
Posted By: Ceo3
Date Posted: 27 September 2016 at 12:43am
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That is correct sir. The returns on Islamic products are on average not as high as conventional banking products. However the funds are in an investment fund rather than shares in the actual bank.
It promotes one of the basic tenets of Islam, redistributing wealth from rich to poor. Whereas traditional banking moves wealth from poor to the well off. The evils and prohibition of interest based banking is found in all religious scriptures. Therefore perhaps a better term is religious/ethical banking (if I may call in that) as opposed to calling it Islamic banking. Religious banking represents the equitable and just (for individual and society) alternative the "other" 99% of us have been looking for. |
Posted By: webcrest
Date Posted: 07 November 2016 at 1:46am
| I am thinking to buy a house by Islamic Banking. Discussion with different Islamic school of thoughts made me more confused. Can anyone guide me in better way? |
Posted By: Ceo3
Date Posted: 07 November 2016 at 9:28pm
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True that there is no agreement on home financing with Islamic Banks whether it is truly shariah compliant. What Islamic Banks offer is they purchase home along with buyer and over the lifetime of agreement the buyer pays rent and buys over the banks share to eventually become sole owner. They add a profit which is included in the loan.
While i dont believe this to be the best product they can offer, i do think it is better than pure interest based home finance. You could also rent thereby avoiding all this. However should you proceed make sure your property in good location so value increase, try to give a bigger deposit and what the total is that you paying the bank over the loan period. All the best Insha Allah |
Posted By: onlinequran5
Date Posted: 09 October 2017 at 5:52am
| I heard from many bankers that the Islamic banks also offer interest base loan and investment. |
Posted By: ZAHRA1234
Date Posted: 07 December 2018 at 12:51am
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Posted By: Noor-e-hidayat
Date Posted: 09 October 2019 at 2:55am
100% Agreed bro
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Posted By: SyedaSM
Date Posted: 23 January 2020 at 1:29am
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Posted By: Soleh
Date Posted: 25 August 2020 at 9:46am
| There is my website about islamic banking http://islamictubeuk.com" rel="nofollow - islamictubeuk.com |