Brother, are you talking about the bank that is publishing the following on its website?:
Product Indicative Expected Profit Rates (Gross p.a)
As from March 1st, 2010 On Demand Savings Account
0.10%
Direct Savings Account
0.20%
60 Day Notice Account
1.25%
Young Persons Savings Account
0.10%
Fixed Term Deposit (3 months)
0.10%
Fixed Term Deposit (6 months)
1.75%
Fixed Term Deposit (12 months)
2.00%
Fixed Term Deposit (18 Months)
2.25%
Fixed Term Deposit (24 Months)
2.50%
That was from IBB website. Which part of that can one regard as "investment"? And what is it about 24 month deposits producing 2.5% per annum that can be regarded as not usury and is not near to regular interest rates?
Brother, any set return is dirhams for dirhams, which is usury and interest. The prophet -s.a.a.w.- said "Any loan that precedes benefit is interest"
If it was investments there needs to be a breakdown of the invested commodities and products, an income statement, and more importantly no barring of loss.
"The Islamic bank does not guarantee the saver’s money, rather it is exposed to profit or loss, and it does not give a fixed amount if it is profitable, rather it gives a certain share according to the agreement between them. "
http://www.islamqa.com/en/ref/85408/...ngs%20accounts
If IBB is gladly announcing their "Profit Rates" for up to two years in advance and commits to them, and is differentiating between people who commit to leaving their money longer against those who don't commit to it, and do not expose the money to normal profits and losses of the market, then it s interest-based with a name change.
True Islamic account needs to be a Mudharaba account that is susceptible to profit and loss, with return only being announced after being achieved (for sure will not be a rounded set number of 2.5%) and transparently showing the deals made if requested.
format_quote Originally Posted by
aadil77
How can you be so sure that all 'islamic' banks do this?
I am not bashing IBB for I do not know everything they do. The important thing to learn is that not all Islamic banks are good banks and reliably Islamic. A few banks are abiding fully by Shariah laws, others are using more lenient methodologies to give profit to saving account holders and tie it to Mudaraba and Murabaha and such, but many many many so-called Islamic banks call themselves that but are full interest-based banks who produce credit cards and personal loans and claim it is based on Shariah.
"But if these banks are Islamic in name only and they deal with riba and other forbidden transactions, then dealing with them is haraam, even if they call themselves “Islamic banks”, because what counts is what really happens, not mere names.
The Standing Committee for Issuing Fatwas was asked: Is it permissible to deal with Islamic banks, even though some of them go against sharee’ah and engage in kinds of transactions that are forbidden?
They replied:
It is permissible to deal with banks and financial institutions that do not deal with riba. But if they deal with riba then it is not permissible to deal with them, and they are not Islamic banks.
Fataawa al-Lajnah al-Daa’imah, 13/310."
So muslims need to learn that there is great evil and misdirection spreading across the World called "Islamic banking" that has a huge section of it consisting of no more than licensed loansharks (just like regular banks) who have a good PR and marketing campaign to convince muslims they are working under valid Islamic principals, when they're not and wouldn't care to. Those institutions we shouldn't deal with AT ALL as even having a current account helps them in their loansharking business and is considered "assisting in sin and aggression". They claim to have a shariah council, but they are more like deviants who are earning money from the bank to smile in press releases and promote them.
Some take lenience with some products like IBB here, but largely steer clear from outright interest, and you as a muslim need to be careful about what products you subscribe to, but it is fine to use the rest of the bank's facilities if they satisfy shariah and the bank is not partaking in outright interest collection.
Only a very small section is actually abiding properly. There are proper Islamic financial institutions that abide by everything that came from the prophet -s.a.a.w.- and the companions.
Good Islamic institutions will not offer saving accounts that have set return rates attached to interest rates, and will not offer "profit" charging credit cards or personal loans, but will work with Islamic financing of homes and business assets along with actual investments in the markets, while offering banking accounts for retail and business customers based on fees for their services.
As an example of a proper Islamic financial institution, you can see Kuwait Finance House in Kuwait. Funny that they don't "plug" the word Islamic in the name yet are sticking to Islamic Shariah finance principles. So yes they have bank accounts and financing and everything, yet their savings account is a "Qard Hasan" account where no money is paid or subtracted. (Strangely enough though their branches out of Kuwait offer profit generating savings account *shrug* but at least at changing rates announced at the end of each month, and do not guarantee any of these returns.)
I would not touch any questionable item even if 90% of scholars say it is ok "this way" or when you sign "that document" when the whole shabang is so unnecessary (what will 0.1% a year add to your life or welfare or wealth for you to risk it? and what would a credit card facility get you today that you couldn't buy yourself tomorrow?), while the price you end up paying (worse to God than 36 instances of adultery, remember.) can be so steep.
It's about the math, in the end. Wallahu 'AAlam.