Lets bank the Islamic way?

[muse]

Friends

You need to ask essential questions from our islamican brigade - for instance:

How does a so called islamic bank determine "profit" without the determination of COST of the credit??

And then you will have ot be very clear with our Islamicans - after all, we are all against USURY, but is that what banking is about, USURY?? Our Islamican brigade will try and paint the international banking system and all banks as being element sof USURY, but this of course patently false - so is it not then hypocrisy to cal something Islamic by mere technicality?

 

[bubble123]

Yes I heard some sort of commission being charged, but is it same as the interest.

Ummm well i am not so sure, those who make Islamic banking rules are very knowledgeable in both the fields. So i guess there must be some sort of difference. I guess its something of that risk is shared by both parties.

 

[livingdead]

Is there a profitable bank which does banking in Islamic way?
Why is it wrong for banks(or anybody) to charge interest?
None of the current problem with banks is due to charging interest.

 

[JayAtl]

islamic banking is like the hindu rate of growth. both have proven to be abject failures in the countries they have been implemented.

 

[Maira La]

None of the current problem with banks is due to charging interest.

ummmm.. do you even know what led to the global economic meltdown? There are lots of documentaries online - I can pass you some links if you want.

I'm not a religious person, but Islamic banking is actually pretty interesting. Basically, the banks act like business partners. They share the loss/profit with the borrower. So they have to make sure the person/entity getting the loan is investing their money properly. The system also ensures people live within their means. Not saying Islamic economic principles are perfect. I don't believe any particular ideology can fix everything.

 

[livingdead]

ummmm.. do you even know what led to the global economic meltdown? There are lots of documentaries online - I can pass you some links if you want.

I'm not a religious person, but Islamic banking is actually pretty interesting. Basically, the banks act like business partners. They share the loss/profit with the borrower. So they have to make sure the person/entity getting the loan is investing their money properly. The system also ensures people live within their means. Not saying Islamic economic principles are perfect. I don't believe any particular ideology can fix everything.

There is nothing new in an investor(a banker or otherwise) taking some equity and later selling it at much higher profit.
Why do you call it islamic banking?
Also, if I am an enterprenure, I will try my best to get money without sacrificing any equity, even if I have to pay an interest. For most business, it is much cheaper to borrow from bank.
Which is why banks are most popular. People who are refused money from bank, go elsewhere.

Can you pass your documentary which says banks are in bad shape because they charge interest. Also please discuss the details of islamic banking here so that people can know what the beast is.

 

[Awesome]

Friends

You need to ask essential questions from our islamican brigade - for instance:

How does a so called islamic bank determine "profit" without the determination of COST of the credit??

And then you will have ot be very clear with our Islamicans - after all, we are all against USURY, but is that what banking is about, USURY?? Our Islamican brigade will try and paint the international banking system and all banks as being element sof USURY, but this of course patently false - so is it not then hypocrisy to cal something Islamic by mere technicality?

There are some very set established procedures. I am against demonizing the conventional banking system or portraying the Islamic system as something wonderous, but it does have its merits especially once you factor in the emphasis on ethical practices. The term evil banks are used more in non-Islamic countries than the Islamic ones.

Remember while Islamic banks may seem to profit less from you, they would probably return less profits back, so it is a matter of fact that in the Muslim countries where Islamic and non-Islamic channels of banking are available our people opt to go to non-Islamic banks more than the Islamic ones to earn the interests on offer.

Anyway the costs are determined in regular banking ways, that is through appraisals. You don't get personal loans from Islamic banks, you get them against something of value, an asset, something that has a tangible equity. If you default on your mortgage the bank would still come to take the house away from you.

 

[Sinnerman108]

Friends

You need to ask essential questions from our islamican brigade - for instance:

How does a so called islamic bank determine "profit" without the determination of COST of the credit??

And then you will have ot be very clear with our Islamicans - after all, we are all against USURY, but is that what banking is about, USURY?? Our Islamican brigade will try and paint the international banking system and all banks as being element sof USURY, but this of course patently false - so is it not then hypocrisy to cal something Islamic by mere technicality?

Let me ask you an even more basic question before I answer yours,

Is Banking at all legal in Islam ?

Answer this, and then we can talk about types of banking etc.

 

[livingdead]

There are some very set established procedures. I am against demonizing the conventional banking system or portraying the Islamic system as something wonderous, but it does have its merits especially once you factor in the emphasis on ethical practices. The term evil banks are used more in non-Islamic countries than the Islamic ones.

Remember while Islamic banks may seem to profit less from you, they would probably return less profits back, so it is a matter of fact that in the Muslim countries where Islamic and non-Islamic channels of banking are available our people opt to go to non-Islamic banks more than the Islamic ones to earn the interests on offer.

Anyway the costs are determined in regular banking ways, that is through appraisals. You don't get personal loans from Islamic banks, you get them against something of value, an asset, something that has a tangible equity. If you default on your mortgage the bank would still come to take the house away from you.

I seriously dont understand what is evil about banks. As long as they adhere to rules in letter and spirit, they can do what any for profit company should do.
I dont see them any eviler/better than an oil or steel company, and an islamic steel/oil will be equally confusing to me.

What is ethical about getting less profit?

There used to be many banks in India(govt owned) who never gave personal loans. They wont even give loans to poor students easily, who did not have collaterals. Why is it a good thing not to give personal loans. It is for a specific bank to decide the risk and whether to give loan.
I would argue, easy access to loans increased consumption in India gave boost to industry and farm products, and gave jobs to more people, there by reducing poverty.

 

[Last Hope]

Well. Islamic banking would be beneficial to the customers as well as the banks. Customers get free loans.
The though give small amount of money. I am not clear in this, but i assume it is like buying a loan. Not sure.

But what I know is, it is efficient and saves troubles for both parties. It has got chances of going bankrupted, but they are really low as compared to the other banking system.

 

[livingdead]

Well. Islamic banking would be beneficial to the customers as well as the banks. Customers get free loans.
The though give small amount of money. I am not clear in this, but i assume it is like buying a loan. Not sure.

But what I know is, it is efficient and saves troubles for both parties. It has got chances of going bankrupted, but they are really low as compared to the other banking system.

How is it beneficial for banks to give free loans. I am not against it either, but it is for the banks to decide.
Why do you think banks have less chance of getting bankrupt if they give interest free loans.

 

[Last Hope]

I am not expert in this.

I think Asim Aquil and Tariq bin Ziyad would help you.

 

[Indrajith]

Islamic banking concept was developed with sole intention of avoiding interest, but what has happend is that the name has changed from interest to profit that is it


They are supposed to invest only in non haram companies & investments ( they should not invest in speculative trade, liquor companies, etc...)

They have to share their profit with the investor ( same just interest in another name)

advantage for the bank is that they get money without interest through islamic channels and invest in non islamic channels and gain more profit ( most of the banks in saudi arabia have islamic & nonislamic banking )

 

[Awesome]

I seriously dont understand what is evil about banks. As long as they adhere to rules in letter and spirit, they can do what any for profit company should do.
I dont see them any eviler/better than an oil or steel company, and an islamic steel/oil will be equally confusing to me.

What is ethical about getting less profit?

There used to be many banks in India(govt owned) who never gave personal loans. They wont even give loans to poor students easily, who did not have collaterals. Why is it a good thing not to give personal loans. It is for a specific bank to decide the risk and whether to give loan.
I would argue, easy access to loans increased consumption in India gave boost to industry and farm products, and gave jobs to more people, there by reducing poverty.

What is evil about banks... And if they adhere to the rules...

First of all every bank lives on the edge of the rules, breaks them often and of course has rich politicians change the rules every now and then whenever they need to. Not evil enough?

How about an institution that gives you loans without confirming that you have the means to pay off this loan or not? Normally if you don't pay they should take away your collateral or whatever asset you have lended against. The banks, didn't even do that, just simply said hey USG pay for them.

Voila bail out.

That's another thing the banks lent the money to the USG in the first place...

Where did I say the ethical part is in taking and giving less profit? I said its highly regulated which makes it ethical, oh and btw, that usually means less profit/interest no matter what type of banking you're in.

Also...

You know your bank lends out way more than it has?

Every bank will have these huge government accounts. Filled with a lot of cash. This is not theirs but the government keeps it there so that the bank may lend it ahead, among various other things. Normally banks are allowed to lend set amount of money depending upon how much capital it actually has. You guessed it, the banks lend a lot more.

If at any given time all the deposited money was withdrawn all at one, the bank will not be able to give that money back.

aka Run on the bank.

Let's not forget fees, fudging up documents, changing interest rates, privacy violations, spamming and so on...

 

[Awesome]

Islamic banking concept was developed with sole intention of avoiding interest, but what has happend is that the name has changed from interest to profit that is it


They are supposed to invest only in non haram companies & investments ( they should not invest in speculative trade, liquor companies, etc...)

They have to share their profit with the investor ( same just interest in another name)

advantage for the bank is that they get money without interest through islamic channels and invest in non islamic channels and gain more profit ( most of the banks in saudi arabia have islamic & nonislamic banking )

It's not entirely true. If you're a car salesman and buy a Corolla from Toyota and sell it to someone else for a profit, have you done anything wrong? If you give the other guy an option to pay in installments, then thats cool too.

One thing to remember is that Islamic banking won't change the bottom line a lot. But it would have an overall positive impact in terms of practices, standardization and regulation.