Tag Archives : islamic banking

Basic Features and Conditions of Salam Salam is a sale whereby the seller undertakes to supply some specific goods to the buyer at a future date in exchange for an advance price fully paid on spot. Seller and the buyer can agree on any price at their free will. Price in Salam can be lower than the spot sale price. The buyer should pay the price in full to the seller at the time of finalizing the [...]

MODES OF ISLAMIC FINANCE As indicated by the Pakistan’s Council of Islamic Ideology (CII) (1980 Pp.4, 5) and almost all of the pioneers of Islamic finance in present age, ideally the real alternatives to lending on interest under an Islamic economic system are profit /loss sharing (PLS) or qard-e-hasan i.e. loaning without any charge over and above the principal amount. However, in view of the [...]

RIBA IN THE QUR’AN 1. First Revelation (Surah al-Rum, verse 39) “That which you give as interest to increase the peoples’ wealth increases not with God; but that which you give in charity, seeking the goodwill of God, multiplies manifold.” (30: 39) 2. Second Revelation (Surah al-Nisa’, verse 161) “And for their taking interest even though it was forbidden for them, [...]

Introduction To Riba: Definition of Riba or Interest The thrust for Islamic Banking is founded on the desire to submit to the Divine Instructions on all transactions, particularly those involving exchange of money for money. However, it would be quite unfair to limit Islamic Banking to elimination of Riba only. Riba is but one of the major undesirable elements of an economic transaction, the others [...]

Modes of Islamic Finance Murabaha Literally it means a sale on mutually agreed profit. Technically, it is a contract of sale in which the seller declares his cost and profit. Islamic banks have adopted this as a mode of financing. As a financing technique, it involves a request by the client to the bank to purchase certain goods for him. The bank does that for a definite profit over the cost, which [...]

Introduction To Islamic Banking: The thrust for Islamic Banking is founded on the desire to submit to the Divine Instructions on all transactions, particularly those involving exchange of money for money. However, it would be quite unfair to limit Islamic Banking to elimination of Riba only. Riba is but one of the major undesirable elements of an economic transaction, the others being Gharar (uncertainty) [...]

“O you who have believed, fear Allah and give up what remains [due to you] of interest, if you should be believers.And if you do not, then be informed of a war [against you] from Allah and His Messenger. But if you repent, you may have your principal – [thus] you do no wrong, nor are you wronged.”(Surah baqarah 78-79) MORE STORIES:Salam – The Islamic Banking Part 6Modes Of Islamic [...]