Japan Joins Booming Islamic Banking

[Joe98]

But if you do same thing with the bank you will end up paying more (approx. 440,336).

Not at all. If the customer repays as per the contract there would be nothing for us to discuss here. If the customer does not repay only then does compound interest kick in - and we can discuss it.

Ultimately the question is-: How do Islamic banks handle customers who do not abide by the contract to repay?

 

[lolwatever]

1. you didnt reply to my comment
2. Ask yourself that question, hwo do your banks handle customers who don't abide to repay?

Assuming your answer is 'throw em in jail', Islam is more practical than that, if the person who default's has the money but isn't paying, then the matter is taken to court and the judge will make the appropriate decision, either the bank agrees to extend his contract, or he is forced to pay, i cant answer whether that's deemed to be theft but if it is then the punishment is applied.

But obviously the bank won't go out lending money to anyone and anyhow, similar to the way usury banks insure the person with the loan has a security.

If the person who needs the loan is poor, and the private bank can't come to any agreement with him/her, then the treasury is there to help, read into Umar's life as a khalifah to see examples of that. (Yes Muslims did have social welfare systems and a treasury while the europeans where trying to figure out whether the woman was a human or not)

 

[Joe98]

Assuming your answer is 'throw em in jail',

No! Of course not! Where are you from???

Therbank will enforce its rights under contract - which means if any assets were secured the bank will sell them and use the money to repay the loan. Any money left over goes back to the owner of the assets.

If there was no security the person is declared bankrupt. And a bankrupt cannot be a director of a company - which means he cannot lose more of the banks money.

In the mean time, I still have no idea how an Muslim bank works.

 

[lolwatever]

No! Of course not! Where are you from???

Therbank will enforce its rights under contract - which means if any assets were secured the bank will sell them and use the money to repay the loan. Any money left over goes back to the owner of the assets.

If there was no security the person is declared bankrupt. And a bankrupt cannot be a director of a company - which means he cannot lose more of the banks money.

In the mean time, I still have no idea how an Muslim bank works.

Well geez that's good news to the family of whoever went broke lol. A night out in the streets. I don't get your second paragraph.

There is no one way method for Muslim banks to work.. just like there's no one way to manage a business or economy... there's only the general rules that need to be established (in this case i guess, no usury and all other related business regulations).. and the rest is flexible

just like ther'es no one way to setup a Muslim leader, Abu bakr was voted by the people of Madinah, Umar was appointed by his predecessor, Uthman was selected from a set of six, and i cant remember about Ali (i think the disagreement blurred things)... So long as the major rules are intact, like the khalif can't be a mischievous person etc

 

[Chuck]

Not at all.
Not at all what?

If the customer repays as per the contract there would be nothing for us to discuss here. If the customer does not repay only then does compound interest kick in - and we can discuss it.
Hence, the two are not same, otherwise this difference wouldn't be present.

How do Islamic banks handle customers who do not abide by the contract to repay?
That depends on case by case basis. To make things simple, I'd say lended money is suppose to be treated like an actual investment (ref to post #16 & #20).