Overview of the products offered by the islamic banks or islamic branches of the traditional banks.

1. 1. What is Islamic banking ?
2. The products of Islamic banks.
3. Islamic vs conventional banking.

2. W H A T I S I S L A M I C B A N KI N G ?
Islamic banking is a banking system that is consistent with the
principles of the Shari'ah (Islamic rulings) .
Shari'ah prohibits the payment or acceptance of interest
charges (riba) for the lending and accepting of money, as well
as carrying out trade and other activities.

3. “I S L A M I C” P R O D U C T S
Deposit products1.
2.
3.
4.
Investment products
Financing products
Insurance products

4. 1 . D E P O S I T
In Wadiah, a bank is deemed as a keeper and trustee of funds. A person
deposits funds in the bank and the bank guarantees refund of the entire
amount of the deposit, or any part of the outstanding amount, when the
depositor demands it.
A token given voluntarily by a debtor in return for a loan.

5. 2 . I N V E S T M E N T
Refers to the sale of goods at a price, including a profit margin agreed to by
both parties, and clearly stated in the sale agreement/contract.
The bank cannot charge additional profit on late payments. However, the
asset remains as a mortgage with the bank until the default is settled.
Is a contract, with one party providing 100% of the capital and the other
party providing its specialized knowledge to invest the capital and manage
the investment project.
Profits and losses are shared between the parties according to a pre-
agreed ratio. The profit is usually shared 50%-50% or 60%-40% for rabb-ul-
mal.

6. 2 . I N V E S T M E N T
This occurs when a person appoints a representative to undertake
transactions on his/her behalf, similar to a power of attorney.
is a written authorization to represent or act on
another's behalf in private affairs, business, or some other legal matter,
sometimes against the wishes of the other.
Is the negotiation of a selling price between two parties without reference
by the seller to either costs or asking price. While the seller may or may not
have full knowledge of the cost of the item being negotiated, they are under
no obligation to reveal these costs as part of the negotiation process.

7. 2 . I N V E S T M E N T
refers to the Islamic equivalent of bonds. Sukuk securities are structured to
comply with the Islamic law and its investment principles, which prohibits the
charging interest. This is generally done by involving a tangible asset in the
investment, such as by giving partial ownership of a property built by the
investment company to the bond owner. The bond owner is then able to
collect his profit as a rent, which is allowed under Islamic law.

8. 3 . F I N A N C I N G
Is a relationship between two parties or more that contribute capital to a
business and divide the net profit and loss pro rata.
-The profit is distributed among the partners in pre-agreed ratios.
-The loss is supported strictly in proportion to capital contributions.
Refers to selling the benefit of use or service for a fixed price or wage.
Under this concept, the Bank makes available to the customer the use of
service of assets / equipment such as plant, office automation, motor vehicle
for a fixed period and price.
Ijarah thumma al bai’, Ijarah wal-iqtina’.

9. 3 . F I N A N C I N G
Is a loan extended on a goodwill basis, with the debtor only required to
repay the amount borrowed. However, the debtor may, pay an extra
amount beyond the principal amount of the loan (without promising it) as a
token of appreciation to the creditor.
Is a contract in which the seller (bank) supplies a specific good to the buyer
at a future date in exchange of an advance price fully paid at the time of
contract. It is necessary that the quality of the commodity intended to be
purchased is fully specified leaving no ambiguity leading to dispute.
Bai' al 'inah (sale and buy-back agreement), Bai'
bithaman ajil (deferred payment sale)

10. 4 . I N S U R A N C E
Takaful is based on the idea that what is uncertain to an individual may cease to
be uncertain to a very large number of similar individuals. It’s a type of Insurance
where members contribute money into a pooling system in order to guarantee
each other against loss or damage.

11. I S L A M I C V S C O N V E N T I O N A L
B A N K I N G
1. The oversight of a sharia board
A sharia board consists of Islamic scholars who are qualified to give
opinions on Islamic business contracts. In a commercial bank, the board is
also involved in supervising bank operations to make sure they comply with
sharia principles. (Prohibiting usury, avoiding speculation and gambling,
investing ethically.)
2. Investments in the bank
-Investments in conventional commercial banks are based on guaranteed
principal and earning a fixed amount of income.
-In Islamic banking, the concept of investment is different : Although the
customer deposits the money, the principal isn’t guaranteed and the bank
isn’t liable to pay the money to its customer.

12. I S L A M I C V S C O N V E N T I O N A L
B A N K I N G
3. Relationships with clients
-In a conventional bank, the relationship between the client and the banker
is one of creditor to debtor; the bank has a responsibility to pay back your
money with or without interest according to your account contract.
-The relationship between a customer and an Islamic bank is completely
different; the debtor and creditor relationship does exist at times in Islamic
banking : It is a partnership.

13. P R E S E N T E D B Y :
KARIM Oumaima