The Sharia'h Basis for our products and Services
The Sharia'h basis for all current (demand deposit) accounts, whether personal or business is the classical Islamic contract of Qard Hassan (a free loan).Through this contract, the depositor grants the bank permission to utilize the deposited funds for Sharia'h compliant activities while the bank in return guarantees the value of the deposit in full on demand.
Savings and Fixed Maturity Account
The Sharia'h basis for all our savings and fixed maturity Accounts is the classical Islamic Contract of Mudaraba (Trustee profit sharing). Through this contract, the bank allocates the funds received from customers to a deposit pool which will be used to undertake Sharia'h Compliant trade, business and investment transactions. Profits that may be generated from such transactions will be shared with the clients in accordance with agreed terms.
The Sharia'h does not allow a fixed (pre-guaranteed) return to be earned on loaned money in the form of interest. Such practices are tantamount to trading of money as a commodity and are forbidden by the Sharia'h. Hence all our products and services are effected on the basis of Sharia'h Compliant Instruments of Finance approved by our Sharia'h advisory Board.
The Bank undertakes many other services (khadamat) for its clients under various Islamic concepts such as Wakala (Agency). For instance with regard to money transfer, the bank acting as a wakil (Agent) effects the transfer by means of a Demand Draft or through SWIFT. The bank utilizes the services of its branches or its foreign correspondent banks to effect such transfer. The bank charges a fee for such services.