Jump to content

Recommended Posts

Posted

since the credit crisis in the western banking system,the media have been writing about the growth in islamic banks,now opening in the UK and i believe in australia.Has anyone any knowledge of how they operate(what are the principle differences in how they operate to western banks?)I read somewhere that loans taken out for property,interest is n't charged but that the bank take a share in the profit of the increased value of the property,or something like that.Any experts out there know the answers to my questions and any opinions as to whether they could be a safer option and more profitable to the borrower?

Posted

i haven't heard of any islamic banks giving mortgages based on Sharia principles and i consider it next to impossible that they demand a profit share (according to the teachings of the Qr'an) if the property's value increases. but since decades banks in many islamic countries do not pay or charge "riba" (interest).

they changed the name of the baby, call it "commission"... et voilà! :o

Posted

As usual Wiki comes up with the goods

http://en.wikipedia.org/wiki/Islamic_banking

Basically they operate the same way as normal banks, but just redefine a few terms to keep the Mullahs happy.

For example interest on deposits = hibah which is a "gift" given to the depositor,

Or interest on mortgages = through murabah, the bank buys the property from the seller and then sells it to the final buyer at a higher price, the buyer then pays off the loan in installments, effectively a fixed interest long term loan, but they can't call it that...

I guess it is better if I refrain from any opinions on religion.

Posted

As usual Wiki comes up with the goods

Wiki provides in many cases good information. however in other cases Wiki provides not only rubbish but also pure refined bullshit. the latter applies to Wiki's explanation of Islamic Banking :o

Posted
I guess it is better if I refrain from any opinions on religion.

if you point to a specific religion, i.e. Islam, the answer is yes. Christianity banned charging interest (based on numerous Bible mentioning) for one-thousand five-hundred years.

Posted
so am i to take it that you consider islamic banking as BS, or do you think it has any value to the consumer over western banking?

i don't consider it as BS as it provides a Muslim who believes in some current interpretations of the Qr'an a way to invest without violating his principles.

but mind you, the interpretations differ. initially the word "riba(h)" depicted usury (excessive interest). although very flowery the arabic language does not differentiate between usury and interest. the dominating islamic scholars are fundamentalists and so are their interpretations and rulings.

no, i don't think that Islamic Banking provides any advantages for a non-Muslim. the result -looking closely at it- is a zero sum game. it is also a well known fact that Islamic Banks have access to their Central Banks for refinancing and are of course required to hold minimum reserves with them. in both cases interest is involved no matter what substitute word is used for it.

Posted
ok naam,thanks for that.when i opened the topic,i just wondered if their way of banking was a more fairer or equitable way of doing things when compared to our own banks.

actually it is less fair than "western" banking where you deposit your cash and know in advance what yield to expect. depositing cash into an islamic bank makes you vulnerable as the bank might show a balance sheet loss and is therefore not required to pay you a profit share as demanded by the Qr'an. the latter is only cushioned by the assurance that the bank will guarantee to pay out a minimum "profit share". using the expression "profit share" even in case of losses is in my opinion :o

Posted
however in other cases Wiki provides not only rubbish but also pure refined bullshit. the latter applies to Wiki's explanation of Islamic Banking

Which particular bit of Wiki's explanation do you disagree with? All your following posts seem to agree with the Wiki description.

Posted
however in other cases Wiki provides not only rubbish but also pure refined bullshit. the latter applies to Wiki's explanation of Islamic Banking

Which particular bit of Wiki's explanation do you disagree with? All your following posts seem to agree with the Wiki description.

actually i did not look at Wiki at all but referred to your quote which i think was taken from Wiki:

"Or interest on mortgages = through murabah, the bank buys the property from the seller and then sells it to the final buyer at a higher price, the buyer then pays off the loan in installments"

in other words, you buy a home, finance it with an islamic mortgage, furnish the home and settle with your family, live thre happily for a certain time and then you let the islamic bank sell it with a profit to repay your mortgage?

Posted

No - the bank buys the house from the seller then sells it on to you at a higher price. You pay for it in instalments which now, theoretically, don't contain interest. When you've paid the last instalment you own the house - just like a non-sharia mortgage.

Posted (edited)
No - the bank buys the house from the seller then sells it on to you at a higher price. You pay for it in instalments which now, theoretically, don't contain interest. When you've paid the last instalment you own the house - just like a non-sharia mortgage.

sorry! my misinterpretation. it happened because i shot from the hip confusing seller and buyer :o the above makes of course much more sense but i think it is not practicable. one could write a paper listing much more cons than pros.

Edited by Naam
Posted
One could write a paper listing much more cons than pros.

Aah, but the main pros are unbeatable

- The mullahs have asserted their right to control the hoi palloi

- The specialist financial advisors have made a small fortune in ratifying the deal

- Your religious conscience remains at peace

So all are very happy.

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Recently Browsing   0 members

    • No registered users viewing this page.


  • Topics

  • Latest posts...

    1. 5

      Thailand Live Wednesday 20 November 2024

    2. 5

      Thai Tesla driver admits reckless driving after argument - video

    3. 20

      Tourist Hits Pattaya Street Sweeper, Attempts to Flee but is Captured by Bystanders

    4. 84

      New Alcohol Control Bill Nearly Finalised; Set for December House Vote

    5. 0

      UK Faces Diplomatic Tightrope Amid Potential Trade War

    6. 0

      Tragedy and Justice: Life Sentence for Hate Crime in California

    7. 0

      Employers Warn of Job Losses as Budget Sparks Offshoring Fears

    8. 0

      Dangerous Russian Fertiliser Dumped in North Sea Off Norfolk Coast

  • Popular in The Pub


×
×
  • Create New...