As a result, Al Rayan Bank’s items provide people the quality regulating consumer protection

Islamic money Frequently asked questions

Islamic banking try similar to the principles of Sharia. An option basis is that it works as opposed to appeal, that’s not enabled inside Islam, because the money by itself isn’t said to be a commodity of which you could potentially profit.

This new Islamic bank operating system spends real trade issues recognized with genuine assets. This means that Islamic financial institutions, such as Al Rayan Bank, don’t conduct business unless of course they have a valuable asset to let the transaction getting carried out.

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Islamic finance companies also are not permitted to fool around with financial tools that derive from speculation, and therefore introduce a top section of risk so you can a financial, additionally the assets and you can places of its consumers. Through that it asset-backed approach, Al Rayan Lender, and you may Islamic banking overall, is not met with a comparable dangers as conventional banking companies. Therefore the brand new Islamic funds industry proved to be an enthusiastic moral and you can resilient replacement for conventional banking pursuing the previous economic crisis.

Al Rayan Financial even offers shelter and you may balance to help you their consumers since it is section of a much bigger Islamic lender called Masraf Al Rayan (MAR). This gives Al Rayan Lender economic balances and availability so you’re able to expertise and you will training to continue developing its selection of Sharia compliant merchandising borrowing products.

Furthermore, due to the fact an excellent British financial, Al Rayan Bank try authorised because of the Prudential Regulated Power (PRA) and you may controlled by the Economic Make Power therefore the PRA, and therefore it ought to satisfy all the United kingdom banking regulations. Such as, Al Rayan Lender savers just who lay their dumps into Bank are protected by the new Financial Features Payment System.

Its lack of demand for Islamic money is just one of the key factors you to definitely distinguish Islamic banks out-of antique banking institutions. Yet not, there are many extremely important differences:

• Islamic financial is resource-recognized for example a keen Islamic lender doesn’t carry out providers unless of course a valuable asset is bought to let the order in order to getting held based on Sharia.
• The business opportunities while the earnings Islamic finance companies create cannot be in/of firms that are thought illegal around Sharia, i.epanies that offer inside the notice, playing, porn, conjecture, cig and other products contrary to Islamic viewpoints.
• The entire properties regarding Islamic financial will be to provide a method for people so you can make its profit in a manner that are moral and you may socially in control. Trading, entrepreneurship and you will risk-revealing try advised and these would be the monetary prices one underpin Islamic funds therefore the situations offered by Al Rayan Lender.
• Islamic financial institutions provides a beneficial Sharia Supervisory Panel to make certain every deals and operations are based on Sharia and moral beliefs.

The fresh Qur’an causes it to be clear you to definitely appeal, otherwise riba, are taboo. Traditional banking, that is appeal oriented, is actually for this reason maybe not suitable for Muslims. The latest Qur’an really does permit exchange as a method regarding generating riches and this is the foundation getting Islamic financial. They operates without appeal provide acknowledged Sharia certified lending products. Talking about based on Islamic finance standards connected with trading, such local rental, opportunities and connection.

That have Islamic finance companies Muslims can save their cash, purchase their homes and you can create their day to day financial for the a good Sharia agreeable ways. Certain Muslim customers stick to conventional finance companies and just don’t keep the interest they earn. Yet not, what they might payday loan companies in Longmont CO not discover would be the fact, indirectly, this will give capital for other people to have points that are maybe not let when you look at the Islam, along with desire-established lending. Eg, a beneficial Muslim customer’s dumps can be partially, otherwise totally, used to give a destination-created loan to fund a gambling establishment or brewery. This is not allowed predicated on Sharia.