Islamic banking is a banking system that is based on the principles of Islamic law (which governs all aspects of Muslim life) and guided by Islamic economics.
Two fundamental principles of Islamic banking are the sharing of profit and loss, and the prohibition of the collection and payment of interest by lenders, investors, or depositors.
Islamic banking is a finance system that complies with Shariah (Islamic Law). Shariah is a code of conduct that guides all aspects of a Muslims’ life.
Islamic banks are guided by principles such as risk sharing, which involves profit and loss sharing.
Shariah prohibits certain elements that are common in conventional finance including interest and speculation.
There are at least six basic principles that are taken into consideration while executing any Islamic banking transaction.
These principles differentiate a financial transaction from a Riba (interest-based) transaction to an Islamic banking transaction.
Islamic law or Shariah serves as the foundation for Islamic financial philosophy. Islamic banking is prohibited from engaging in transactions containing interest or riba by
Correctly interpreted according to Shariah terminology the word “Riba” means excess, increase, or addition, which, implies any excess compensation without due consideration (the consideration does
The global banking system first began to develop in the 17th century, which is when the term interest first appeared. Interest refers to the providing
There are two kinds of Riba In the Holy Quran, Allah (SWT) says in Sura Al-Baqarah (2-279): “ …..And if you repent, yours is your
When carrying out any Islamic financial transaction, at least six fundamental principles are taken into account These guidelines set apart an interest- or riba-based financial
An Islamic principle is a belief in the free market. Islam views tangible goods with intrinsic value as money. Here are some examples of goods
Islamic banks offer products for current and savings banking accounts, structured to comply with the principles of Shariah. There are two prominent views based on
An Al-Wasiyya, commonly referred to as an Islamic Will, is a legally binding document that specifies a person’s final intentions, the assets they intend to
Investments in specific industries are prohibited by Islamic law. These include: Many Islamic scholars also advise against investing in the tobacco and weapon industry.
Islamic bank savings and term deposits are banking products. They are often referred to as investments in South Africa. It is important to distinguish between
The concept of insurance is not haram in Islam when undertaken in the framework of Takaful or mutual cooperation and solidarity. Contrary to conventional insurance,
Takaful means “guaranteeing each other” in Arabic. It is an Islamic system of mutual insurance built around the concept of ‘tabarru’ (donation, gift). ‘Tabarru’ contributions
Your coverage payment is combined into a single fund, the participant’s Takaful Fund, which is used to cover any unforeseen expenses in the event that
Takaful mitigates the problematic elements of gharar, maysir, and riba and is Shariah-compatible because it is founded on the principle of collaboration rather than sale
Conventional insurance is based on a contract of exchange (sale) between the insurance company and the covered person. This contract is void because it has
A transactional account that allows you to set up debit orders, deposit cash, make ATM withdrawals, have online banking access, payments, and more.
Allows you to save and grow your cash funds by benefiting from the profit share of an Islamic bank or Islamic window.
Interest-free mortgage bonds where the Islamic bank owns the home and sells it back to you for a higher fixed price each month.
Interest-free car purchase at an agreed price. At the last payment, the ownership is transferred to you.
Banking and lending can be hard to understand.
Having to include Shariah compliance adds an extra layer of complexity.
Islamic banking and finance are readily available and can meet almost all your needs.
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