Interest-Free Banking: Sharia's Embrace.!
Islamic banks operate in accordance with Sharia law, which prohibits usury, and distinguishes them from conventional banks. A key distinction is the absence of interest charges on loans provided by Islamic banks. These banks adhere to Islamic principles, refraining from charging interest on loans or providing interest on deposits.
One such principle is Mudarabah, emphasizing profit and loss-sharing between the bank and its customers. If the bank generates profits, it shares them with its customers, and in the event of a loss, customers bear a portion of the bank's losses. Another principle is Musharafa, promoting mutually beneficial and halal (permissible) business practices.
Waadiyyah is another rule observed by Islamic banks, emphasizing the safeguarding of customers' deposited funds. The principle of Murabahah involves a sales contract where both buyer and seller agree to a price higher than the market value for the goods being sold. Additionally, Ijara, or leasing, is a significant source of income for Islamic banks, involving the leasing of immovable properties.
One such principle is Mudarabah, emphasizing profit and loss-sharing between the bank and its customers. If the bank generates profits, it shares them with its customers, and in the event of a loss, customers bear a portion of the bank's losses. Another principle is Musharafa, promoting mutually beneficial and halal (permissible) business practices.
Waadiyyah is another rule observed by Islamic banks, emphasizing the safeguarding of customers' deposited funds. The principle of Murabahah involves a sales contract where both buyer and seller agree to a price higher than the market value for the goods being sold. Additionally, Ijara, or leasing, is a significant source of income for Islamic banks, involving the leasing of immovable properties.