Islamic banking

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Transcript of Islamic banking

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Content Introduction


Basic Principles of Islamic Banking

Concept of Islamic banking Financial

Conventional Banking VS Islamic


When it emerged?Islamic finance has grown tremendously since it first emerged in the 1970's.

How many Islamic financial institutions worldwide?There are over 300 Islamic financial institutions worldwide across 75 countries.


"Islamic bank is an institution that mobilize financial resources and invest that money in an attempt to achieve pre-determined Islamicaly - acceptable social and financial objectives. Both mobilization and investment of money should be conducted in accordance with the principles of Islamic Shariah(principles).

Basic Principles of Islamic Banking

The borrower and the lender share the profits as well as losses arising from the venture with the finances obtained from the lender. The basic view is that the general community should benefit from such activities.

Islamic Law prohibits investing in unlawful businesses such as businesses involved in selling alcohol or pork; or businesses that produce media for instance, gossip columns or pornography; or gambling industry.

#The interest deprives someone from the blessings of Allah as it leads to taking away of property actually belonging to someone.#Muslims should stay away from interest for their own welfare as it eventually invites Allah fury;

Concept of Islamic banking Financial

1. Risk sharing2. Right and duties of individual3. Sanctity of contract

Example of how dose Islamic home finance work.

Mobilize resources to develop the societyAttract resources and lend them to gain maximum profitReview by certified auditors and shariah advisory boardPay zakat (religious obligation) and tax (government requirement)Review solely by certifiedauditors Pay tax as required by the govermentIslamic Banking VS Conventional Banking

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