Islamic Bank | Corporate Profile | About Us (2023)

Islamic Bank | Corporate Profile | About Us (1)

Pakistan's Leading Islamic Bank is also the Country's Best Bank

The Best Bank in Pakistan

Meezan Bank, Pakistan’s best bank and the first and largest Islamic bank, is a publicly listed company with a paid-up capital of Rs. 17.89 billion. It is one of the fastest growing financial institutions in the banking sector of the country. With its Vision of establishing ‘Islamic banking as banking of first choice ...’ – the First Islamic Bank commenced operations in 2002, after being issued the first-ever Islamic commercial banking licence by the State Bank of Pakistan.

The Bank provides a comprehensive range of Islamic banking products and services through a retail banking network of more than 900 branches in more than 250 cities of the country. Backed by a state-of-the art T-24 core banking system, the branch network is supported by 24/7 banking services that include over 950 ATMs, VISA and MasterCard Debit cards, a Call Center, Internet Banking, Mobile Application and SMS Banking facility.

The Bank operates strictly under the principles of Islamic Shariah and is well-recognized for its product development capability, Islamic banking research and advisory services. In order to ensure strict Shariah-compliance in all its products and services, the Bank has established a dedicated Product Development and Shariah Compliance department that operates under the supervision of the Bank’s in-house Resident Shariah Board Member and a Shariah Board comprising of internationally renowned Shariah scholars.

Meezan Bank has been recognized as the ‘Best Bank in Pakistan’ by Pakistan Banking Awards– the most prestigious awards in Pakistan’s Banking sector, which is a testimony of the Bank’s commitment to excellence.The Bank has consistently been recognized as the ‘Best Islamic Bank in Pakistan’ by numerous local and international institutions.Other awarding institutions include Islamic Finance News - Malaysia, Global Finance magazine - New York, Asset AAA - Hong Kong, Asiamoney – Hong Kong, The Banker – United Kingdom, South Asian Federation of Accountants, Islamic Finance Forum of South Asian Awards, Pakistan Banking Awards – Dawn & IBP Pakistan, Employers Federation of Pakistan and CFA Association - Pakistan.

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History

" We must work our destiny in our own way and present to the world an economic system based on true Islamic concept of equality of manhood and social justice "

Quaid-e-Azam Mohammed Ali Jinnah

1997

"Al-Meezan Investment Bank is established with a mandate to pursue Islamic Banking. Riba free certificates of investment are launched

2002

Meezan Bank acquires the Pakistan operations of Societe Generale and concurrently Al Meezan Investment Bank converts itself into a full fledged Islamic commercial bank. The first Islamic banking license is issued to the Bank and it is renamed Meezan Bank. President General Pervez Musharraf inaugurates the new Islamic Commercial Bank at a formal ceremony in Karachi.

Car Ijarah, Pakistan’s first Riba-free car financing scheme, is launched

2003

Meezan Bank establishes itself as the pioneer of Islamic Banking in Pakistan and quickly establishes branches in all major cities of the country. A wide range of products are developed and launched consolidating the Bank’s position as the premier Islamic Bank of the country Al Meezan Investment Management Limited (AMIM), the asset management arm of Meezan Bank, introduces Meezan Islamic Fund (MIF), the country’s first open-end Islamic Mutual Fund.

Easy Home, Pakistan’s first Shariah compliant housing finance scheme, is launched

2004

The Government of Pakistan awards the mandate for debut of international Sukuk (Bond) offering for USD 500 million. The offering is a success and establishes a benchmark for Pakistan. Meezan Bank acts as the Shariah Structuring Advisor for this historic transaction.

ATMs and ATM Debit Card launched

2005

Meezan Bank becomes the first customer of Islamic Insurance (Takaful) by signing the first Memorandum of Understanding MoU with Pak-Kuwait Takaful Company Limited (PKTCL). The signing of this MoU has ushered Pakistan into a new era of Islamic Insurance (Takaful).

(Video) Dubai Islamic Bank In Kenya Advert | By Tamaz Productions

ATMs and ATM Debit Card launched

2006

Meezan Bank, becomes the first Islamic bank to introduce 8 am to 8 pm banking at selected branches in Karachi.

Internet banking launched

2008

Meezan Bank was awarded 'Best Islamic Bank in Pakistan' by Islamic Finance News of REDmoney Group, Malaysia and 'Best Islamic Financial Institution in Pakistan' by Global Finance Magazine, New York. Branch network grew to 166 branches (including sub-branches) in 40 cities nationwide. Deposit base grew to Rs. 70 billion and the total financing portfolio amounted to Rs. 39 billion

Dedicated Islamic Banking Centres established in 3 cities.

2009

Being a socially responsible bank, Meezan Bank launched Meezan Labbaik, a Hajj and Umrah product - the primary objective being the desire to facilitate Muslims in performing their holy duty. Meezan Visa Debit Card was also launched during the year which is accepted at over 30 million outlets worldwide and allows customers to withdraw funds from their account from more than 1.4 million ATMs worldwide and can also be used for shopping, dining, traveling, fuel and cash needs.

2010

Meezan Bank developed a number of new deposit products to cater to the unique needs of different market segments. Among the products launched during this year were Meezan Business Plus, a Mudaraba-based account that offers an array of free services for businesses, Meezan Euro Savings Account and Meezan Pound Savings Account.

During the year, 38 Islamic banking awareness seminars were held in 23 cities across Pakistan and were attended by more than 4,400 participants representing customers, general public and professionals.

2011

The inauguration of the new Head office in Karachi symbolizes Meezan Bank's established position amongst the leading banks and the largest Islamic Bank in Pakistan. During the year, 53 branches were opened to reach a landmark of 275 branches in 83 cities across Pakistan. Meezan Bank was awarded the ‘Best Islamic Bank in Pakistan for 2011’ by Islamic Finance News of REDmoney Group, Malaysia.

2012

Meezan Bank reached 10 years of Riba-free banking with 310 branches in 90 cities. The Bank also started Premium Banking Services and opened Premium Banking Centers throughout the country.

Official Facebook page crosses 85,000 Likes

2013

Meezan Bank became the 8th largest bank in Pakistan in terms of branch network with 350 branches in 100 cities.

2014

Meezan Bank reaches a branch network of 428 branches in 117 cities. The Bank acquired Pakistan operations of HSBC.

Mobile Banking app launched

(Video) Meezan Bank and islamic Bank[میزان بینک ، اسلامی بینک]k bary me Dr Israr Ka Bayan.

2015

Agreement signed with Karandaz Pakistan.

2016

Launch of New Corporate Website

Official Facebook Page crosses 1 Million Fans

2017

Meezan Bank completes 15 years of Riba-free banking with over 600 branches in 159 cities, becoming the 7th largest bank in the country.

The Bank also launched EMV and NFC enabled Debit Cards and served as joint financial advisor to the Ministry of Finance for issuance of GoP Ijarah Sukuk.

2018

Awarded 'Best Bank' for 2018 by Pakistan Banking Awards

Launch of Visa Platinum & Supplementary Debit Cards and launch of new Internet Banking

First Islamic Bank in Pakistan to introduce e-Rights Shares Subscription and e-Dividend Payments & Tax Certificates

2019

Launch of New Meezan Bank Mobile Banking App

Launch of SkimGuard Protection on ATMs of other banks

2020

Awarded 'Best Bank' for 2020 by Pakistan Banking Awards

Awarded 'Best Bank (Large Size Banks Category)' for 2020 by CFA Society of Pakistan

2021

Awarded 'Best Performing Bank, Highest Amount of Deposits in Roshan Digital Account (1st Position)' by State Bank of Pakistan

Awarded 'Top Performance award for disbursements & approvals in Mera Pakistan Mera Ghar (2nd Position)' by State Bank of Pakistan

Credit ratings upgraded to AAA by VIS Credit Rating Company Limited - the highest possible rating in Financial Industry

Vision, Mission & Values

Islamic Bank | Corporate Profile | About Us (2)

Vision

Establish Islamic banking as banking of first choice to facilitate the implementation of an equitable economic system, providing a strong foundation for establishing a fair and just society for mankind.

(Video) differences of conventional bank and sharia bank

Islamic Bank | Corporate Profile | About Us (3)

Mission

To be a premier Islamic bank, offering a one-stop shop for innovative value-added products and services to our customers within the bounds of Shariah, while optimizing the stakeholders value through an organizational culture based on learning, fairness, respect for individual enterprise and performance.

Islamic Bank | Corporate Profile | About Us (4)

Values

Shariah-compliance, Integrity, Service Excellence.

Successful implementation of the Islamic Banking model rests upon absolute adherence to the principles of Islamic Shariah. The foundations of a strong Shariah underpinning at Meezan Bank were laid from the beginning. A world-renowned Shariah Board and a highly qualified and experienced in house Shariah Advisor are fundamental aspects of the Bank's core USP. The primary role of this Board is to maintain and further strengthen this commitment and to ensure strict Shariah-compliance in all areas of the Bank's operations.Members of the Shariah Board of Meezan Bank are Internationally-renowned scholars, serving on the boards of many Islamic banks operating in different countries.

Justice (Retd.) Muhammad Taqi Usmani (Chairman)

Justice (Retd.) Muhammad Taqi Usmani is a renowned figure in the field of Shariah, particularly in Islamic Finance. He currently holds advisory positions in a number of financial institutions practicing Islamic Banking and Finance.

Justice (Retd.) Muhammad Taqi Usmani has vast experience in Islamic Shariah, teaching various subjects on Islam for more than 50 years. He has served as a Judge in the Shariat Appellate Bench, Supreme Court of Pakistan from 1982 to 2002. He is also the Editor-in-Chief of the magazine Albalagh (a weekly publication of Jamia Darul Uloom, Karachi) as well as an active contributor of articles in leading Pakistani newspapers.

Justice (Retd.) Muhammad Taqi Usmani graduated from Punjab University, Pakistan in 1970 and also holds an LL.B. from Karachi University, Pakistan. Prior to these, he completed the Takhassus course, which is the specialization course of Islamic Fiqh and Fatwa (Islamic Jurisprudence) from Jamia Darul Uloom Karachi, Pakistan.

In March 2004, His Highness Sheikh Mohammad Bin Rashid Al Maktoum (Dubai Crown Prince and UAE Minister of Defense) presented a special award to Justice (Retd.) Muhammad Taqi Usmani in recognition of his lifetime service and achievement in Islamic Finance at the occasion of International Islamic Finance Forum, Dubai, which is one of the biggest events in the Islamic Finance Industry.

Current Board Memberships:

  • Vice President and Shaikul-Hadith, Jamia Darul Uloom, Karachi
  • Chairman, International Shariah Standard Council set up by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), Bahrain.
  • Permanent Member International Islamic Fiqh Academy, Jeddah, sponsored by OIC
  • Member, Islamic Fiqh Academy of Rabita-al-‘Alam-e-Islami, Makkah
  • Fellow of the Royal Aal al-Bayt Academy, Jordan
  • Chairman Centre for Islamic Economics Pakistan since 1991
  • Chairman Shariah Board Abu Dhabi Islamic Bank, U.A.E.
  • Chairman Shariah Board Meezan Bank Ltd., Karachi, Pakistan
  • Chairman Shariah Board Pak-Kuwait Takaful, Karachi
  • Chairman Shariah Board Pak-Qatar Takaful, Karachi
  • Chairman Shariah Board Arif Habib Investments – Pakistan International Islamic Fund, Karachi
  • Chairman Shariah Board Arcapita Investment Fund, Bahrain
  • Member Unified Shariah Board Islamic Development Bank Jeddah
  • Member Shariah Board Guidance Financial Group, USA

Awards Received:

  • His Highness King Abdullah (of Jordan) Award 2011
  • Wisamul Istiqlal Award presented by His Highness King Abdullah of Jordan 2010
  • His Highness Prince Muhammad bin Raashid Aal Maktoom Award 2004
  • Lifetime Achievement Award presented by the Islamic Business and Finance Magazine 2011
  • IDB Prize in Islamic Banking and Finance 2014

Dr. Muhammad Imran Ashraf Usmani (Vice Chairman - Shariah Board)

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Dr. Mufti Muhammad Imran Ashraf Usmani, son of Justice (Retd.) Mufti Muhammad Taqi Usmani, graduated with specialization in Islamic Fiqh (Islamic jurisprudence) from Jamia Darul-Uloom, Karachi, where he has been teaching Fiqh since 1990. He also holds an LL.B. and Ph.D. in Islamic finance. He is a member of the administration board of Jamia Darul-Uloom, Karachi. Presently Dr. Usmani is the Vice Chairman of Shariah Board at Meezan Bank.

Dr. Usmani is the author of numerous publications related to Islamic finance and other Shariah related subjects. He has presented papers in numerous national and international seminars and has delivered lectures at academic institutions including Harvard, LSE, LUMS and IBA.

In the past, Dr. Usmani has served as an advisor / member of Shariah Boards of several renowned institutions since 1997 including the State Bank of Pakistan, HSBC - Amanah Finance, UBS - Switzerland, Guidance Financial Group USA, Lloyds TSB Bank - UK, Japan Bank for International Cooperation (JABIC), Credit Suisse Switzerland, RBS Global, Old Mutual Albarakah Equity & Balanced Funds South Africa, AIG Takaful, ACR ReTakaful Malaysia, Capitas Group USA, Bank of London and Middle East Kuwait, BMI Bank Bahrain, Al Khaliji Bank Qatar, Sarasin Bank Switzerland, DCD Group Dubai, International Centre for Education in Islamic Finance (INCEIF) and other mutual and property funds, Takaful Companies and international Sukuk etc.

At present, Dr. Usmani is serving at different capacities at various organizations which are as under:

  • Faculty Member – Jamia Darul Uloom
  • Director – Hira Foundation School
  • Director – Center for Islamic Economics (CIE)
  • Vice Chairman Shariah Board – Meezan Bank
  • Research Faculty Member – Department of Economics Karachi University
  • President & Founder Trustee – Ihsan Trust
  • Academic Committee Chairman / Board Member / Faculty Member – Centre for Excellence In Islamic Finance CEIF (IBA)
  • Member Central Board – Center for Islamic Economics (CIE)
  • Shariah Board Member – Chairman Shariah Board NBP Fullerton Asset Management Company (NAFA)
  • Shariah Board Member – Al Meezan Mutual Funds
  • Shariah Advisor – PMEX
  • Chairman – Islamic Index Pakistan Stock Exchange (PSX)
  • Shariah Board Member – AAOIFI Shariah Committee
  • Shariah Advisor / Shariah Board Secretary – Guidance Financial Group USA
  • Member Central Shariah Supervisory Board – ChartisTakaful Company (Global)
  • Shariah Board Member – Sarasin Bank Switzerland
  • Shariah Board Member – AAOIFI Dubai
  • Shariah Board Member – International Islamic Financial Market Bahrain IIFM
  • Board Member – International Islamic Rating Agency Bahrain
  • Shariah Board Member – Amanah Islamic Finance (AIFA) Australia
  • Chairman Shariah Supervisory Council – Amanah Bank Sri Lanka
  • President and CEO – Usmani and Co. PVT Ltd.
  • President and CEO – Usmani and Co. Shariah Advisors PVT Ltd.

Sheikh Esam Mohamed Ishaq (Board Member)

Born in Bahrain, Sheikh Esam Mohamed Ishaq graduated from McGill University, Montreal, Canada and also studied Shariah with a number of Sheikhs in the traditional manner.

He is a member of the High Council of Islamic Affairs of the Government of Bahrain and holds various Shariah positions in many social, commercial and educational institutions. Currently, he also teaches Fiqh, Aqeeda and Tafseer courses in various Centers of Islamic studies, supervised by the Ministry of Islamic Affairs in Bahrain.

He holds memberships of the following institutions:

  • The Governance Board of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), Bahrain
  • The Shariah Council of the Maldives Monetary Authority (MMA), Maldives
  • The Shariah Panel of International Islamic Financial Market (IIFM), Bahrain
  • Advisory Panel in Bahrain Institute of Banking and Finance (BIBF), Bahrain

In addition to membership of the Shariah Supervisory Boards of a number of local, regional and international Islamic Financial Institutions (IFIs), he is the Chairman of Shariah Supervisory Boards of the following IFIs:

  • The Family Bank for Microfinance, Bahrain
  • Tamweel Africa Holding, Senegal
  • Investment Dar Bank, Bahrain
  • Eco Islamic Bank, Kyrgyzstan
  • Al Barakah Islamic Bank, Pakistan

Furthermore, Sheikh Esam is Chairman of the Muslim Educational Society, Vice Chair & Shariah Advisor for Discover Islam Centre & member of the Board of Trustees of Al- Iman Islamic Schools, Bahrain.

Mufti Muhammad Naveed Alam (Resident Shariah Board Member)

Mufti Muhammad Naveed Alam holds a Masters in Islamic Banking and Finance from University of Karachi and Shahadat ul Alamiyah and Takhassus (specialization in Islamic Jurisprudence and Fatwa) from Jamia Darul Uloom, Karachi. He is also a Certified Shariah Advisor & Auditor (CSAA) from Accounting and Auditing Organization for Islamic Financial Institution (AAOIFI).

Mufti Muhammad Naveed Alam joined Meezan Bank in 2013 as a member of the Shariah Compliance Unit of Shariah Compliance Department. His main responsibilities include Islamic banking training, Shariah Compliance review and Shariah Audit of different departments and branches.

He is an active teacher / trainer at Center for Excellence in Islamic Finance (CEIF) of Institute of Business Administration (IBA) Karachi, Center of Islamic Economics (CIE) of Jamia Darul-Uloom Karachi, as well as several other renowned universities.

He is also a member of the Shariah Board of NBP Funds. Prior to joining as RSBM, Mufti Muhammad Naveed Alam has served as Shariah Advisor of Premier Window Takaful Operations and also as Shariah Coordinator at Indus Hospital.

FAQs

What is Islamic banking discuss in detail? ›

Islamic banking, also referred to as Islamic finance or Shariah-compliant finance, refers to financial activities that adhere to Shariah (Islamic law). Two fundamental principles of Islamic banking are the sharing of profit and loss and the prohibition of the collection and payment of interest by lenders and investors.

What are four 4 components of Islamic financial system? ›

The Islamic financial system encompasses the Islamic banking system, Islamic money market, Islamic insurance or takaful, Islamic capital market and the specialised financial institutions which provide alternative sources of financing.

What are the core objectives of an Islamic bank? ›

To offer contemporary financial services in conformity with Islamic Shariah; To contribute towards economic development and prosperity within the principles of Islamic justice; Optimum allocation of scarce financial resources; and. To help ensure equitable distribution of income.

What is the importance of Islamic banking? ›

Islamic finance provides financial services for all segments of the population and can help increase financial inclusion. Islamic finance also serves as an alternative source for funding infrastructure and as a means of diversifying funding and risk exposures of investors.

What are the characteristics of Islamic banking? ›

The characteristics features of Islamic banking are divinely sourced, shari'ah compliant banking system, rich with numerous financial concepts, riba (usury) free banking system, garar (uncertainty) free banking system, prohibits injustice, and enjoys benevolence in transactions.

What are Islamic banking values vision and mission? ›

Vision Public choice into a sharia bank that is excellence in service and performance b. Mission 1) Make a positive contribution to society and care for the environment. 2) Provide solutions for the community to the needs of Islamic banking services. 3) Provide optimal investment value for investors.

What are the types of Islamic banking? ›

  • Ans. Following are the main modes of Islamic banking and finance:
  • MURABAHA. Literally it means a sale on mutually agreed profit. ...
  • IJARAH. ...
  • IJARAH-WAL-IQTINA. ...
  • MUSAWAMAH. ...
  • ISTISNA A. ...
  • MUDARABAH. ...
  • MUSHARAKAH.

What are the services of Islamic banking? ›

Some of these include Mudharabah (profit sharing), Wadiah (safekeeping), Musharakah (joint venture), Murabahah (cost plus finance), Ijar (leasing), Hawala (an international fund transfer system), Takaful (Islamic insurance), and Sukuk (Islamic bonds).

What are the six major components of Islamic financial planning? ›

Findings This study determines six vital constituents of maqāṣid al-Sharīʿah , namely, parameters of maqāṣid , particular objectives, appropriate means, micro provisions, level of need and legal maxims to develop a conceptual framework of actualizing maqāṣid al-Sharīʿah in Islamic finance.

What is Islamic finance system? ›

The Islamic financial system is founded on the absolute prohibition of the payment or receipt of any predetermined, guaran- teed rate of return. This closes the door to the concept of interest and precludes the use of debt-based instruments.

What are the types of Islamic contracts? ›

Essentially there are two kinds of Islamic Financial Contracts i.e. Commutative and Non-Commutative.

How do Islamic banks work without interest? ›

Islamic banks operate without interest, which is not permitted in Islam. Instead, money is generated through profit from investments. Each Islamic bank has a panel of Muslim advisers who ensure that these investments are compliant with Sharia law.

Which is the first Islamic bank in the world? ›

The first modern commercial Islamic bank, Dubai Islamic Bank, was established in 1979. The first Islamic insurance (or takaful) company – the Islamic Insurance Company of Sudan – was established in 1979.

What are the challenges of Islamic banking? ›

There have two types of risk faced by Islamic banks which are financial risk and non-financial risk. Financial risk comprises of credit, market and liquidity risk. For non- financial risks includes operational risk, regulatory risk, business risk, legal risk, strategic risk and banking risk.

When did Islamic bank start? ›

While the initiation of modern Islamic Banking dates back to 1963, the present-day practice debuted in 1975, when banks were established and mandated to operate in adherence to Shari'a rules and principles. Ever since, Islamic Banking has been one of the fastest growing sectors in the global banking industry.

What is profit rate in Islamic banking? ›

An Islamic finance that works under the principles of Mudarabah is a form of business relationship: you provide the money, and the bank does business with it. As part of this relationship, a profit sharing ratio (PSR) is stipulated. Simply put, ( 95% of profits go to the bank, and 5% of the profits go to you).

How Islamic banks Mobilise their funds? ›

To mobilize funds, Islamic banks receive term deposits with uncertain interest rates and then, on behalf of depositors, consolidate these funds with their own resources to offer facilities to applicants based on contracts with either certain or uncertain profits.

What is interest in Islam? ›

In fact, the literal meaning of riba (interest) as it is used in the Arabic language means to excess or increase. In contrast, the Holy Qur'an says, “Allah decreases interest and increases sadaqah”. From Islamic point of view, interest means effortless profit which is free of exchange.

Which bank is Islamic in Pakistan? ›

HBL is one of the largest and leading Islamic banking players in the country.

What is an Islamic loan called? ›

Interest-bearing loans are prohibited under Islam's Sharia law. In Islamic finance, murabaha financing is used in place of loans. Murabaha is also referred to as cost-plus financing because it includes a profit markup in the transaction rather than interest.

How many Islamic banks are there in the world? ›

In 2019, the number of commercial Islamic banks worldwide amounted to 428 banks. In the same year, the total assets of global Islamic banking amounted to about 1.99 trillion U.S. dollars sharing about six percent of the total global banking assets.

Is Islamic banking halal or Haram? ›

In case of Murabaha, the bank sells an asset and charges profit which is a trade activity declared halal (valid) in the Islamic Shariah. Whereas giving loan and charging interest thereupon is pure interest-based transaction declared haram (prohibited) by Islamic Shariah.

Is Islamic banking interest free? ›

ZERO-INTEREST LOANS? In Islamic finance, loans with interest are considered haram, or forbidden. Islamic loans are instead structured as equity contracts.

What are the main instruments of Islamic financing? ›

Financing instruments in Islamic finance consist of equity-like and debt-like instruments. Fixed claim instruments include murabaha, ijarah, salam, and istisna. Sukuk is an asset-backed trust certificate (bond) representing ownership of an asset or its usufruct (earnings) based on the principle of sharia.

How did Islamic banking start? ›

In its modern form, Islamic banking started with pioneering experiments in the early 1960s in Egypt. The Mit-Ghamr Islamic Saving Associations (MGISA) mobilized the savings of Muslim investors, providing them with returns that did not transgress the laws of the Shari'ah.

What are the major modes of Islamic banking and finance? ›

The Essentials are given below:
  • Murabaha (Agreed profit margin sale with cash or deferred payment of price)
  • Ijarah (Leasing)
  • Salam (Advance payment--Deferred Delivery Sale)
  • Musharaka.
  • Mudaraba.
  • Istisna.

What is Islamic investment? ›

Islamic investing is grounded in Islamic finance principles, which aims to meet investors' financial needs with integrity and in a manner that is fair, trustworthy, honest and ensures a more equitable wealth distribution.

What is halal loan? ›

Accordingly, Sharia-compliant finance (halal, which means permitted) consists of banking in which the financial institution shares in the profit and loss of the enterprise it underwrites.

In which country there are only Islamic banks? ›

In west Africa, Nigeria—with over 90 million Muslims—is also looking to be a hub. So far, the country only has two banks providing Islamic services.
...
Advertisement.
Country# of Islamic BanksAssets ($ Bil.)
Saudi Arabia4194.7
UAE7169.2
Kuwait5120.5
Qatar5113.3
9 more rows
5 Nov 2020

Is Islamic finance growing? ›

However, institutional Islamic finance did not emerge until the twentieth century. Currently, the Islamic finance sector is growing at a rate of 15% to 25% per year, with Islamic financial institutions managing assets worth over 2.7 trillion USD globally.

What are the two contracts in Islamic banking? ›

Essentially there are two kinds of Islamic Financial Contracts i.e. Commutative and Non- Commutative.

What is bank sales price? ›

The debt amount that the customer has to pay to the bank on a deferred payment basis is known as Bank Selling Price. A Bank Selling Price comprises of financing amount plus the profit margin that a bank books upfront when a financing facility is provided to a customer.

What is BBA in Islamic banking? ›

BAI` BITHAMAN AJIL. Bai' Bithaman Ajil (BBA) refers to a sale and purchase transaction of an asset to be paid on later date (deferred payment) based on a price, which include a profit margin agreed to by both contracting parties.

How do Islamic loans work? ›

Islamic financing is instead based on making a profit through the sale of commodities. Basically, the buyer asks the bank to buy the exact item that they want financed, which is then sold to them at an additional markup. The buyer is then asked to pay for the item in instalments or through a “rent-to-own” scheme.

Can I take loan from Islamic bank? ›

Does Islamic bank offer loans? Islamic banks do not offer loans; they offer financing through Shari'a compliant modes of investment and transactions.

What is Takaful payment? ›

Takaful, the Islamic alternative to insurance, is based on the. concept of social solidarity, cooperation and mutual indemnification of losses of members. It is a pact among a group of persons who agree to jointly indemnify the loss or damage that may inflict upon any of them, out of the fund they donate collectively.

What are the issues and challenges for Islamic banking in modern age? ›

Some of the challenges that the Islamic banking industry faces today includes: o Lack of awareness & skepticism at different levels – including investors, bankers, regulators, researchers & customers. o Being a new industry, a major challenge in its growth is the worldwide shortage of trained Human Resource in Islamic ...

What do you think are the 5 major challenges faced by Islamic banks in recent times? ›

Some issues are identified here that may help consolidation and growth of Islamic banking.
  • Standardization. ...
  • 1.1 Vocabulary of Islamic Banking: ...
  • 1.2 Financial Instruments and Their Documentation: ...
  • 1.3 Pricing Formulas for Islamic Financial Products: ...
  • Public Awareness. ...
  • Training of Banking Professionals in the Use of Islamic.

Is Islamic banking better than conventional banking? ›

Any loan given by Islamic Banks must be interest free. Conventional Bank treats money as a commodity and lend it against interest as its compensation. Islamic banking products are usually asset backed and involves trading of assets, renting of asset and participation on profit & loss basis.

Who is founder of Islamic banking? ›

Shaikh Saleh is widely acknowledged and revered internationally as a pioneer of Islamic banking & finance and Participation banking. He was the highest authority in the field of Islamic economics.

What are the types of Islamic banking? ›

  • Ans. Following are the main modes of Islamic banking and finance:
  • MURABAHA. Literally it means a sale on mutually agreed profit. ...
  • IJARAH. ...
  • IJARAH-WAL-IQTINA. ...
  • MUSAWAMAH. ...
  • ISTISNA A. ...
  • MUDARABAH. ...
  • MUSHARAKAH.

What is the history of Islamic banking? ›

While the initiation of modern Islamic Banking dates back to 1963, the present-day practice debuted in 1975, when banks were established and mandated to operate in adherence to Shari'a rules and principles. Ever since, Islamic Banking has been one of the fastest growing sectors in the global banking industry.

What is the Islamic financial system? ›

The Islamic financial system is founded on the absolute prohibition of the payment or receipt of any predetermined, guaran- teed rate of return. This closes the door to the concept of interest and precludes the use of debt-based instruments.

Which is the first Islamic bank in the world? ›

The first modern commercial Islamic bank, Dubai Islamic Bank, was established in 1979. The first Islamic insurance (or takaful) company – the Islamic Insurance Company of Sudan – was established in 1979.

What is an Islamic loan called? ›

Interest-bearing loans are prohibited under Islam's Sharia law. In Islamic finance, murabaha financing is used in place of loans. Murabaha is also referred to as cost-plus financing because it includes a profit markup in the transaction rather than interest.

How many Islamic banks are there in the world? ›

In 2019, the number of commercial Islamic banks worldwide amounted to 428 banks. In the same year, the total assets of global Islamic banking amounted to about 1.99 trillion U.S. dollars sharing about six percent of the total global banking assets.

Is Islamic banking halal or Haram? ›

In case of Murabaha, the bank sells an asset and charges profit which is a trade activity declared halal (valid) in the Islamic Shariah. Whereas giving loan and charging interest thereupon is pure interest-based transaction declared haram (prohibited) by Islamic Shariah.

What are the services of Islamic banking? ›

Some of these include Mudharabah (profit sharing), Wadiah (safekeeping), Musharakah (joint venture), Murabahah (cost plus finance), Ijar (leasing), Hawala (an international fund transfer system), Takaful (Islamic insurance), and Sukuk (Islamic bonds).

Who is the founder of Islamic banking? ›

Shaikh Saleh is widely acknowledged and revered internationally as a pioneer of Islamic banking & finance and Participation banking. He was the highest authority in the field of Islamic economics.

Why was Islamic banking created? ›

It was this need for a fair financial system that brought about the birth of Islamic banking in the mid 1970s. Its objective was to provide a financial alternative that was fair, transparent and above all, a source of economic upliftment for all those in need.

How do Islamic banks work without interest? ›

Islamic banks operate without interest, which is not permitted in Islam. Instead, money is generated through profit from investments. Each Islamic bank has a panel of Muslim advisers who ensure that these investments are compliant with Sharia law.

What is profit rate in Islamic banking? ›

An Islamic finance that works under the principles of Mudarabah is a form of business relationship: you provide the money, and the bank does business with it. As part of this relationship, a profit sharing ratio (PSR) is stipulated. Simply put, ( 95% of profits go to the bank, and 5% of the profits go to you).

Is Islamic banking interest free? ›

ZERO-INTEREST LOANS? In Islamic finance, loans with interest are considered haram, or forbidden. Islamic loans are instead structured as equity contracts.

Can Muslims take loans? ›

The Quran states that it is illegal in the eyes of Islam to take an interest-bearing loan. Though it is relatively easy for Muslims to not charge others for capital they lend out, Muslims are faced with the challenge of securing financing for debt they incur.

What is interest in Islam? ›

In fact, the literal meaning of riba (interest) as it is used in the Arabic language means to excess or increase. In contrast, the Holy Qur'an says, “Allah decreases interest and increases sadaqah”. From Islamic point of view, interest means effortless profit which is free of exchange.

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