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ISLAMIC BANKING

ISLAMIC BANKING. A New Avenue to Business. DEFINATION. Islamic banking refers to a system of banking activity that is consistent with Islamic law ( Sharia ) and guided by Islamic economics. CHARACTERISTICS. No Riba ’ Avoid the eonomic activities involving speculation ( ghirar )

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ISLAMIC BANKING

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  1. ISLAMIC BANKING A New Avenue to Business

  2. DEFINATION Islamic banking refers to a system of banking activity that is consistent with Islamic law (Sharia) and guided by Islamic economics.

  3. CHARACTERISTICS • No Riba’ • Avoid the eonomic activities involving speculation (ghirar) • introduction of an Islamic tax (zakat) • staying away from goods and services that are contrary to Islamic values (alcohol, pork, etc.) • investments in gambling, prostitution, pornography and weaponry are prohibited. Acceptable investments include those made in education, food production and biotechnology.

  4. CONVENTIONAL VS ISLAMIC BANKING • One of the main differences between conventional and Islamic banking is the absence of interest-based transactions (riba). For instance, instead of lending funds to a buyer for purchasing property, an Islamic bank would itself buy the property and sell it to the buyer at a profit. The buyer will pay back the amount in instalments.

  5. Sukuk refers to the Islamic equivalent of bonds

  6. Global Islamic Banking Of late, Islamic financial institutions are expanding in the US and other parts of Europe to meet the needs of a growing Muslim population. Islamic banking in the United Kingdom is now in fact larger than that of Pakistan according to a report by the International Financial Services (IFS) BANK of Tokyo-Mitsubishi UFJ (Malaysia) Bhd (BTMU) has embarked on an initiative to take a leadership role in promoting Islamic financing to its clientele across the globe. It aims to not only attract such transactions to Malaysia but also to pro-actively participate in the transactions originating from the Middle East and other region.

  7. Islamic Banks Malaysia • Affin Islamic Bank Berhad • AffinMechant Bank Berhad • Alliance Islamic Bank Berhad • Al-Rajhi Bank • AmIslamic Bank Berhad • Bank Islam Malaysia Berhad • Bank Muamalat Malaysia Berhad • CIMB Islamic Bank Berhad • EONCAP Islamic Bank Berhad • HSBC Amanah Malaysia Berhad • Hong Leong Islamic Bank Berhad • Kuwait Finance House Berhad • Maybank Islamic Berhad RHB Islamic Bank Berhad • Asian Finance Bank Berhad

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