Islamic money Faqs

Islamic financial was consistent with the prices out-of Sharia. A switch factor would be the fact it works instead of interest, that isn’t let inside Islam, due to the fact currency in itself isn’t reported to be a commodity at which you could potentially money.

The newest Islamic banking system spends actual trading facts backed having actual assets. As a result Islamic finance companies, particularly Al Rayan Bank, don’t conduct business unless he’s got a valuable asset so that your order to be carried out.

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Islamic banks also are perhaps not allowed to use economic products you to definitely are derived from speculation, which present a high part of chance so you’re able to a bank, and assets and you will places of its users. By following which resource-recognized means, Al Rayan Bank, and you may Islamic banking total, is not exposed to a comparable threats as the antique financial institutions. Due to this fact the fresh Islamic funds industry became an ethical and long lasting alternative to traditional banking following latest financial drama.

Al Rayan Bank offers shelter and you may stability in order to its customers because it is part of a much bigger Islamic financial called Masraf Al Rayan (MAR). This gives Al Rayan Bank monetary balances and additionally accessibility so you can possibilities and you will training to continue developing their set of Sharia compliant shopping financial products.

Furthermore, just like the a United kingdom lender, Al Rayan Bank are authorised by Prudential Regulated Power (PRA) and you will managed from the Economic Conduct Authority while the PRA, which means that it will see the British banking statutes. Such as for instance, Al Rayan Financial savers exactly who set the dumps into the Financial is protected by the latest Monetary Services Settlement Plan.

Its lack of demand for Islamic finance is just one of the important aspects one identify Islamic financial institutions off old-fashioned financial institutions. not, there are more extremely important distinctions:

• Islamic banking was investment-backed and thus an Islamic bank cannot would providers except if a valuable asset is paid for to allow the order to help you feel presented considering Sharia.
• The company expenditures plus the payouts Islamic banking companies create cannot be in/out-of companies that are believed illegal under Sharia, i.epanies one to deal in appeal, gambling, pornography, speculation, smoking and other commodities in contrast to Islamic viewpoints.
• The entire site out of Islamic banking should be to bring a way for neighborhood to perform the earnings in a way that try ethical and socially in control. Trading, entrepreneurship and you may chance-sharing was recommended and these would be the economic values one to underpin Islamic funds as well as the facts provided by Al Rayan Bank.
• Islamic banking institutions possess a beneficial Sharia Supervisory Panel to be sure all the purchases and processes depend on Sharia and you can ethical standards.

New Qur’an will make it clear one to notice, otherwise riba, is actually forbidden. Antique financial, that is focus created, is actually thus perhaps not suitable for Muslims. Brand new Qur’an does enable trade as a method regarding promoting wide range referring to the foundation getting Islamic banking. It operates in the place of appeal to give approved Sharia certified lending products. These are predicated on Islamic financing beliefs related to trade, particularly rental, assets and you can connection.

With Islamic finance companies Muslims can save their cash, pick their homes and you will would its every now and then financial when you look at the a great Sharia compliant means. Certain Muslim users stick with conventional financial institutions and simply don’t support the attract it secure. Yet not, whatever they might not understand is that, indirectly, this can offer investment with other customers to have activities that are maybe not let within the Islam, plus desire-mainly based lending. Eg, a great Muslim owner’s places is partly, or completely, always render an interest-depending loan to fund a casino otherwise brewery. This is not enabled according to Sharia.