Islamic Banking
Explore Islamic banking options. Learn about different financial products and understand your choices.
Understanding Riba
Riba (interest/usury) is discussed in Islamic finance. Many Muslims seek alternatives to conventional banking. Islamic banks offer various products that work differently from conventional loans.
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Islamic Banking Products
Islamic Savings
Profit-sharing accounts offered by Islamic banks.
Home Financing
Murabaha or Ijara-based home financing options.
Checking Accounts
Riba-free current accounts at Islamic banks.
How Islamic Banking Works
Murabaha (Cost-Plus)
The bank buys the asset you want (home, car) and sells it to you at a markup. You pay in installments. The markup is the bank's profit, not interest.
Ijara (Leasing)
The bank buys the property and leases it to you. A portion of each payment goes toward owning the property. At the end, you own it outright.
Mudarabah (Profit-Sharing)
For savings accounts: the bank invests your money and shares profits with you. If there's a loss, you bear it. This is how profit-sharing works.
Frequently Asked Questions
What is Murabaha?
Murabaha is cost-plus financing where the bank purchases an asset and sells it to the customer at a profit (markup). The profit is agreed upon upfront.
What is Ijara?
Ijara is lease-based financing where the bank purchases property and leases it to the customer with an option to own.
What is Musharakah?
Musharakah is a partnership where profits are shared according to agreement, and losses are shared proportionally to capital contribution.
Are Islamic banks available in the US/UK?
Yes. In the US: UBL, Ameen Housing. In the UK: Al Rayan Bank. Many conventional banks also offer Islamic windows.
What is Mudarabah?
Mudarabah is a silent partnership where one partner provides capital and the other provides expertise. Profits are shared; the working partner bears losses.
What banking options exist for Muslims?
Various Islamic banking products exist including savings accounts, mortgages, and checking. Research each option and consult scholars as needed.
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Get NotifiedAll guidance is based on mainstream Islamic scholarship. When in doubt, consult your local scholar.