Sharia Banking

[Said1]

Who knew? Well not me.


Banking on Sharia Principles: Islamic Banking and the Financial Industry
Dr. Linda Eagle


There are an estimated 1.61 billion Muslims worldwide, making Islamic banking one of the fastest growing segments of the financial industry. Banks serving the Islamic population must comply with several very specific principles of Islamic law if they hope to retain existing customers and attract new ones. Banks must be ready with specialized products and services and they must put programs in place to train their personnel to support these products and services in order to exist in this competitive marketplace.

The basic principle of Islamic banking follows the laws of Sharia, known as Fiqh al-Muamalat (Islamic rules on transaction). The term “Islamic banking” is synonymous with “full-reserve banking” and “Sharia-compliant banking.” The most prominent feature of these laws is usury – the prohibition of paying or collecting interest on funds. The Islamic terminology for this is riba or ribaa. The Sharia also forbids engagement in investments that include financial unknowns such as buying and selling futures, as well as businesses that are haraam – dealing in products that are contrary to Islamic law and values such as alcohol, pork, gossip or pornography. These principles apply to all individuals, companies and governments.

Banks that comply with Islamic law are forbidden to charge interest or late payment fees, which is also considered a type of riba. To minimize risk, banks will often require a large down payment on goods and property, or insist upon large collateral. It is lawful for the Bank to charge a higher price for a good if payments are deferred or collected at a later date since it is considered a trade for goods rather than collecting interest. Sharia-compliant banking products include Mudharabah (profit sharing), Wadiah (safekeeping), Musharakah (joint venture), Murabahah (cost plus) and Ijarah (leasing). Another way that banks work within Islamic laws while trying to turn a profit is by buying an item that the customer wants, and then selling the item to the customer at a higher price.

http://www.bankersonline.com/vendor_guru/edcomm/edcomm_mkt_100107.html

[Dilloduck]

Who knew? Well not me.



http://www.bankersonline.com/vendor_guru/edcomm/edcomm_mkt_100107.html

Interesting--I hope I don't have to learn all those big foreign words.
(sorry Obama--hate to embarrass you like this)

I sorta think this is one reason the Jews got a bad rap. They were more than happy to handle other peoples money for a price.

[Yurt]

i've talked to muslims about this and there is still away for those who have the money to make alot off of you, smoke and mirrors

[Dilloduck]

i've talked to muslims about this and there is still away for those who have the money to make alot off of you, smoke and mirrors

Somehow that isn't too surprising is it?

[Yurt]

Somehow that isn't too surprising is it?

not when their 'profit' started his religion by raiding caravans and giving a good share of the allah's booty to himself....the profit

[bullypulpit]

Who knew? Well not me.



http://www.bankersonline.com/vendor_guru/edcomm/edcomm_mkt_100107.html

Until desktop underwriting came on the scene in the late 90's...introduced by Fannie Mae, you didn't get a mortgage loan without a 20% down payment at hand. It's been a downward spiral in the mortgage lending industry ever since.

[Hobbit]

Until desktop underwriting came on the scene in the late 90's...introduced by Fannie Mae, you didn't get a mortgage loan without a 20% down payment at hand. It's been a downward spiral in the mortgage lending industry ever since.

Which was all caused by congressional pressure to invent loans that would allow people with bad credit to buy houses. Wow, just wow. When you say it like that, it sounds like a really, really bad idea.

[Yurt]

Until desktop underwriting came on the scene in the late 90's...introduced by Fannie Mae, you didn't get a mortgage loan without a 20% down payment at hand. It's been a downward spiral in the mortgage lending industry ever since.

do you have problem with that?


Which was all caused by congressional pressure to invent loans that would allow people with bad credit to buy houses. Wow, just wow. When you say it like that, it sounds like a really, really bad idea.

exactly.

my how the libs spin this....their programs to get the so called not "rich" homes, has now turned into a nightmare. but it is not he dem/socialist fault, it is someone elses's....bush, anyone on the right, yet, the left is the party that pushed the program.

:lame2:

[Said1]

Until desktop underwriting came on the scene in the late 90's...introduced by Fannie Mae, you didn't get a mortgage loan without a 20% down payment at hand. It's been a downward spiral in the mortgage lending industry ever since.

Used to be the way here, too. I never did buy a house (for resons that go beyond this thread) but the last time my ex and I looked into to it, the bank was more than pleased to lend us more than we could afford - short term low interst??. We were advised by someone who knew what they were talking about to put more down and I think at a higher rate of interest (does that makes sense, I could be wrong!!) because we would not be able to afford the payments later (I'm sure everyone knows what that means given the rate of foreclosures recently). Anyway, six months prior, we were looking at a very reasonably priced home and the loans officer at the bank told us to come back when we had a co-signer, proof that we had the down payment in the bank and a bunch of other conditions we could NOT meet - including a larger percentage down at a much higher rate of interest. That was about 8 or 9 years ago.

I hope all that made sense, I know nothing about mortgages, loans, credit cards etc.

[Kathianne]

I've bought 5 houses as an adult. Never put down less than 30%. Seems only prudent. I've always had 'accelerated payments', meaning pay my mortgage twice a month, in halves. It knocks at least 5 years off the mortgage and accelerates principle accumulation.