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Islamic Banking is excellent strategy to make profits from uncovered market segment.
it is more than clear in AL-Qur'an when Allah said وَأَحَلَّ اللَّهُ البَيْعَ وَحَرَّمَ الرِّبَا
it is allow for Muslims to sell what they want with some profits but the forbidden things is the interest, so for sure there is nothing to do with the getting profit, more than that Islamic Finance will give you or guide to sell and get profit without putting in the risk of having interest
There is no contradiction between both of them, pure Islamic finance does not prohibit making profits, it is not charity.
To be able to answer this concern, we need to understand what principles behind both kinds of banking, Islamic and conventional one and how do they make profit.
First, conventional bank making profit from the general banking transactions that are based on interest or certain fees that are coming from loans, remittance, or treasury transactions. Most of those transactions are a kind of Riba or fees that coming from prohibited transactions in Islamic principles due to unfairness like "Bay'a Al-Gharar".
While in Islamic banking, any financing product should be reviewed by the Sharia Counsel of the bank and remove any revenue may come from prohibited transaction based on sharia principles. The financing transactions in Islamic banks are kind of Buyou'a such as Murabaha and not as simple cash loan with interest. And the permitted Buyou'a in Islam are well known and approved by Sharia principles.
In summary, Islamic transactions (Buyou'a) will stimulate the whole economic cycle by involving many different parties in the transaction not only the two main parties, the bank and customer. Therefore, it will enrich the community and involved in the economic cycle of the goods generation. The factory will generate the good that will be purchased by the distributor, then the retailer will purchase it then sell it to the bank and the bank will sell it to the customer with postponed value making some margin. All related entities in this transaction will get benefit, then the community will get too. While in normal conventional transaction, bank will lend money to the customer with certain interest. And this will cause the poor will be more poorer and the rich will be more richer.
Therefore, I believe the purely Islamic banks with trusted Sharia Counsel have real Islamic products, while I doubt the conventional banks developing Islamic product. For the later one, I believe it's a marketing try but as genuine like the Islamic banks.
Finally, I believe that we have only three Islamic banks here in Saudi Arabia, Al Rajhi Bank, Al Inma Bank, and Al Bilad bank. Others, I don't think so...
Thank you for your question, First Islamic financing not clear for all Muslim, due to several reasons,I believed that In the Arab world its a conventional product not creative one, so they are looking for profit & to enrich bank balance sheet, while for west eastern muslim countries -ASIA , more professional ( i.e. Malaysia), & Im sure that Islamis financing will have a GLOBAL financial driven of our globalized world. thank u
Islamic Banking refers to the system of banking activities that are inconsistent with the principles of Shariah. Islamic Banking has the same purpose as convential banking except it operatesd under the rules of Shariah.
The transactions of Islamic Banking are based on riba free basis (non-interest based) and it is pure Islamic. Howeber, the concept of Islamic banking is new as compared to convertial banking and it has lot of chances of improvement in the light of Quran and Sunnah.
Islamic Finance is not a logo to make profit. It is a different way to do business and finance. However, practices might have some violation of Islamic principles. This does not mean that banks or Islamic financial institutions are using the concept as strategy.
yes is a pur islamic banking
is the best financial strategy of our prophet mohammed sala allho3alaihi wa salam.
Islamic finance is one solution for many societies and religious people in the world
No body can prove the current Islamic financing purely runs on the Islamic principle.. In fact it is a backdoor for conventional banking system.. when you take some credit from Islamic banks they charge you extra money This is the money that you need to pay on the amount borrowed..this is similar to interest..no matter what the people say about this ..even they have gone to such an extent that they try to justify these charges as part of Islam and they try to give it a different name..
Further more the main difference between the Islamic and conventional financing is that conventional banking is based on paper money ..this concept was introduce to the world economy some200 years ago while we see that the Quran talks about gold and silver and describe gold and silver as money..My question from all those people is that those who say that we should follow the Salaf of the first three hundred years is that did the salaf used these paper money..what would they have done with the paper money if it would have been introduced in there time ..Surely they would have threw theses paper money in the dust bin ..As long as the paper money is part of the economy then just forget about pure Islamic financing..
