It is a banking system, which provides banking services and products in line with the rules and principles of Sharia and is conducted under direct supervision and audit of Sharia scholars.
Sharia is an umbrella term which stands for the principles and rules related to practical aspects of life which cover acts of worship, financial transactions, family law and laws of inheritance, rules of war and peace etc. whether they are mentioned explicitly in the Holy Quran and Sunnah or derived from other Sharia sources by Mujtahedeen through application of the rules of Ijatihad.
All individuals, corporate entities, firms, societies, clubs, government organizations, statutory bodies/corporations, public, private institutions etc. are eligible to open account in Islamic banks provided they fulfill the banks’ and the regulatory authorities’ requirements.
Islamic banking offers Riba free banking in line with Islamic Sharia rules. It neither gives nor takes loans on nterest. It operates as a trading company, which buys, sells and enters into different modes and contracts of nvestment such as Mudaraba, Musharaka etc.
Some of the most commonly used modes of Islamic banking and finance are:
• Mudaraba: It is a form of partnership where one party provides the funds while the other provides management services against apre-agreed share in the profit of the investment. However, if there isany loss, it is borne solely by the apital provider.
• Musharaka: It is a partnership with all the parties contributing to the capital of the Musharaka on the basis of rofit and loss sharing. The profit shall be shared as per the agreement but the loss will be borne pro rata.
• Ijara: It is a leasing contract in which the owner of an asset or its usufruct sells the usufruct of the underlying asset to the lessee for an agreed rental.
• Salam: It is a kind of sale in which payment is made on spot while the delivery of the goods is deferred.
Islamic banks invest/utilize the funds received from the Account Holders/customers under Islamic modes of financing and investment contracts to generate profit.
What is the difference in ahlibank Al Hilal Islamic banking services as the other banks are also offering same services?
ahlibank owns a unique distinction and exposure of Islamic
banking which it obtains with its presence in several GCC countries.
As far as comparison with the services provided by other banks, the
main difference is that Al Hilal Islamic banking provides Sharia
compliant products and services and in no way enters into any Sharia
repugnant and interest based transaction.
Ahli Islamic has a full-fledged Sharia Supervisory Board (whose decisions are binding on the bank) and a Sharia Compliance and Audit Department, which are involved in structuring, documentation, vetting approval and post transaction audit of all transactions and products. The Sharia Board is comprised of renowned Sharia scholars. Dr Ali Mohieddine Al-Quradaghi, the Chairman of Sharia Supervisory Board, is one of the most revered Sharia scholars in the world in the field of Islamic banking and finance.
No, Islam does not prohibit from selling or buying or entering into partnership with non-Muslims provided the underlying transactions are Sharia compliant.
Yes, the Account Holder bears the loss in proportion to his/her investment.
Islamic banks do not offer loans; they offer financing through Sharia compliant modes of investment and transactions.
It’s called Ribh in Arabic and is translated as profit in English.