Islamic Bank of Britain

[kadafi]

Atlast, they opened a branch here at London Road - Leicester. I'm plannin' to open a account there Insha'Allah -- I was wonderin' (for those who reside in Brittain), do you have a account, if so, how greatly do they differ from the established banks? I mean, since they don't attribute riba (interest) to accounts; how do they make sufficient profit in order to get it going.

 

[kadafi]

I've done a small research and found out that some Muslim investors are investin' in them. Presumably since they're Muslims; I don't think they would charge interest.

The new bank, once approved, will begin operations with initial paid-up capital of Ł14m ($24m) but, subject to FSA consent, will increase its capital shortly thereafter to at least Ł50m, through a UK initial public offering (IPO) and private placement in the Arab world and Asia. There is no dominant investor group but the project has been driven by a number of experienced Gulf and UK bankers. The existing structure is led by chairman Abdul Rahman Abdul Malik, the CEO of Abu Dhabi Islamic Bank, and includes Adnan Ahmed Youssef and Abdul Magid Breish, both from Arab Banking Corporation, and Michael Carter, who also has extensive banking experience in the Gulf.

http://www.thebanker.com/news/fullstory.php/aid/1000/Islamic_Bank_of_Britain_launch_imminent.html

But how do you think they'll make adequate profit (if any) bro if they're not chargin' any interest?

 

[aamirsaab]

I was wonderin' (for those who reside in Brittain), do you have a account, if so, how greatly do they differ from the established banks? I mean, since they don't attribute riba (interest) to accounts; how do they make sufficient profit in order to get it going.

I dont have a clue how they make their profits...if its not by interest then i dunno lol
must be something 2 do with goverment. e.g. say the bank gets 100 customers..then the bank receive X amount from government.
i think its summat like that.
we could go ask them lol

 

[Celestial]

lol, heard of shares my friend! ( kadafi )

the money that people invest in the them will be kept for them, however don't think money stays at one place. they have got top advisers that tell them the best place to buy and sell shares. therefore they will get lots and lost of profit, this is because we are lending our money to them that makes this possible. trust me they get more money then you would imagine. Don’t forget that they have announced that they also will go into mortgaging. That's one industry that earns more than 1 billion in profits annually.


one question though: is having shares and getting dividend haraam or halal ?
anyone got the answer for that.

 

[aamirsaab]

having a share isnt haram
but some would argue it is

cus its not ur money thats being earned and its gambling or watver..i can see what they mean by that...however, its business init..
my uncle has a couple o shares in a business
and he told me how it works
u buy a share(like a percentage) of a particular business and if that business does well ---i.e. increases its market share, then ur share that u bought is worth more...and thus profit is made when u sell that share(S) to someone else


i would say its halal cus ur not neccesarily betting/gambling - it depends on which business u choose and whter or not they are increasing their markt share (i.e. selling more items)...i can see how some ppl would say that it is gambling tho - cus ur plying with luck ...but its not really..if u get my jist lol
hope that explained it

 

[Celestial]

brother aamirsaab just like you said some would argue it is.

cus its not ur money thats being earned and its gambling or watver..i can see what they mean by that...however, its business init

the sharia has got rules for every aspect of our life even in business. although not a lot of people know about it doesn't mean that we have to turn a blind eye to it. one example is corner shops that sell alcohol of . when you ask them why they sell it. they usually answer oo wel don't drink it we just sell it because there is demand for it.

i would say its halal cus ur not necessarily betting/gambling - it depends on which business u choose and whter or not they are increasing their markt share (i.e. selling more items)...i can see how some ppl would say that it is gambling tho

oke now to tell you the truth i don't know the full details. but i asked one of my teachers about the subject and he told me that it haraam, not because its gambling in a way or it has interest ( which it hasn't ) but because of the contract that you enter has to be liable according to the sharia laws. if it doesn't there is no contract and it become haraam since it doesn't fulfill it. according to most scholars. we shall cover this topic in a few weeks. i can't wait .

notice i haven't included companies which are ruled by the sharia laws. i think those are the only companies that you can have shares with since they fulfill the requirements.

 

[kadafi]

This question has also been covered at islam-qa:

Question :

What is the attitude of Islam towards buying and selling shares as a profession? May Allaah reward you with good.​

Answer :
Praise be to Allaah. 1 – Definition of shares.

A share is a defined portion of the total capital of a company.

A share is defined as being the share that the shareholder has in a company, or a portion of the total capital of a company, written on a certificate that has a nominal value, so that the shares in totality represent the capital of the company, and are all of equal value.

Based on that, the share is an independent document, given to the shareholder, that contains information specific to the company, such as the company name, the amount of its capital, its nationality, the location of its headquarters, the number and value of the share and the name of its holder if it is a nominal share, or the statement that the share belongs to the bearer.

2 – Ruling on shares

In principle there is nothing wrong with buying or selling shares, but there are some things that should be avoided, such as:

Buying and selling shares in companies in which it is haraam to hold shares because they sell things that are not permissible, or they help in spreading corruption and falsehood.

Buying and selling shares in riba-based banks.

Putting share money in riba-based banks, because that leads to the profits being mixed with riba money.

A – The Standing Committee was asked about holding shares in private companies that deal in charity work, agriculture, banks, insurance and petroleum. They replied:

It is permissible for a person to hold shares in these companies if they do not deal with riba. If they deal with riba then it is not permissible. That is because it is proven from the Qur’aan, Sunnah and scholarly consensus that dealing with riba is haraam.

Similarly it is not permissible for a person to hold shares in commercial insurance companies, because the insurance policies involve ambiguity, uncertainty and riba, which are all haraam according to Islamic sharee’ah.

Fataawa Islamiyyah, 2/43

 

[aamirsaab]

brother aamirsaab just like you said some would argue it is.




the sharia has got rules for every aspect of our life even in business. although not a lot of people know about it doesn't mean that we have to turn a blind eye to it. one example is corner shops that sell alcohol of . when you ask them why they sell it. they usually answer oo wel don't drink it we just sell it because there is demand for it.





oke now to tell you the truth i don't know the full details. but i asked one of my teachers about the subject and he told me that it haraam, not because its gambling in a way or it has interest ( which it hasn't ) but because of the contract that you enter has to be liable according to the sharia laws. if it doesn't there is no contract and it become haraam since it doesn't fulfill it. according to most scholars. we shall cover this topic in a few weeks. i can't wait .

notice i haven't included companies which are ruled by the sharia laws. i think those are the only companies that you can have shares with since they fulfill the requirements.

ahhh right
yeah i know about that shop selling alchohol business - i dont agree with that cus as muslims we shouldnt touch alchohol---but some people are planinly in it for the money - and dont care what crim they commit
thanks 4 the addition 2 the shares stuff. :thumbs_up
Brother kadafi has pointed out that u can have shares as long as that business doesnt deal with riba (im assuming this means haram stuff).

Just to clarify my orginal point--- the share is like a part of the business,,so ur like an owner of it.
i understand that u shouldnt hava share with a business dealing with riba cus thats just as bad as dealing with riba itself.

note: im not being angry or shouting at ne1 ---just having a convo lol

 

[Celestial]

thanks brorther kadafi for the usefull info. i shall definitely reseach on it further.
since there seems to be some unclarities. brother aamirsaab as i said before i haven't really got to this topic yet and don't know the full details. after my little reseach i shall post the conclusion.


p.s. this may take weeks even years. since me brain capacity is half the size of a ordinary lab rat.

 

[aamirsaab]

take as long as u want mate lol

 

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Its open in Manchester now as well.. On Stockport Road... Its well Good... Mashallah

 

[HeiGou]

I dont have a clue how they make their profits...if its not by interest then i dunno lol
must be something 2 do with goverment. e.g. say the bank gets 100 customers..then the bank receive X amount from government.
i think its summat like that.
we could go ask them lol

Well I know nothing about this particular bank or what Islamic banks do in general, but I have read some things on what Islam allows or does not in the past (and so this is something that a non-Muslim roughly remembers - take it with a large grain of salt)

Some scholars allow what is called al-hiyal al-fiqhiyyah or legal strategems. There is one called inah or usurious sale. You may not lend money at interest (riba) but you may sell something to someone else, with payment to be made after a period of time, and then buy it back immediately. Suppose I have a car, I sell it to you for 5,000 pounds, to be paid in a years time, and then at the same time, I buy it back from you for 4,000 pounds paid in cash on the spot. The difference is equivalent to the interest you would have paid me if I had lent you 4,000 pounds. I believe this is how most Islamic banks offer finance for buying houses.

However the main aim is to develop partnerships. Ideally you ought to take the bank as your partner in whatever you do. You share the risks and you share the rewards. This is tough for the bank because if they judge right and you do well they make a lot of profit. If they judge wrong, they do not. It is not fixed like interest rates.

 

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:salamext:

*bump

 

[☆•♥°ąყ℮Տիმ°♥•☆]

Assalam-o-Allikum
im actually looking to change my bank account inshaAllah to an islamic bank... does anyone know of any in the north east of england and more specific county durham? and do they give the same atm cards, internet banking etc... ?

 

[rabiakhalid]

Salam,

I want to know about Islamic banking of standard chartered bank, is it write or wrong?