Is it ok to work in Islamic banking related Jobs ?

[muzzybee]

So, I ve just seen an article about the boom in Islamic finance in Dubai, and how Dubai wants to be the Islamic finance Hub.
I presume their are mostly conventional banks in the region, but a few Islamic banks as well ( with No interest at all)

[oshirowanen]

Re: Is it ok to work in Islamic banking related Jobs ?

So, I ve just seen an article about the boom in Islamic finance in Dubai, and how Dubai wants to be the Islamic finance Hub.
I presume their are mostly conventional banks in the region, but a few Islamic banks as well ( with No interest at all)

If before taking the job you do your research about the bank and find that it only offers products based on Sukuk, Murabaha, Ijara, Musharaka, Mudaraba, and Takaful, then working for such a bank should be fine as all those principles are supposed to be halaal methods of making a profit without getting interest/riba involved. However, if you find that the bank is using those techniques plus riba techniques or just riba, then I get the feeling it would be wrong to work for such a bank.

[muzzybee]

Re: Is it ok to work in Islamic banking related Jobs ?

If before taking the job you do your research about the bank and find that it only offers products based on Sukuk, Murabaha, Ijara, Musharaka, Mudaraba, and Takaful, then working for such a bank should be fine as all those principles are supposed to be halaal methods of making a profit without getting interest/riba involved. However, if you find that the bank is using those techniques plus riba techniques or just riba, then I get the feeling it would be wrong to work for such a bank.

Thanks for the reply.
Now having said that , if we were to promote this to communities where there are no islamic banks available but you need to help the community of Muslims and be able to promote this concept worldwide.
Yep. We must change for Islam and not the other way around.

What do you think.

[oshirowanen]

Re: Is it ok to work in Islamic banking related Jobs ?

Thanks for the reply.
Now having said that , if we were to promote this to communities where there are no islamic banks available but you need to help the community of Muslims and be able to promote this concept worldwide.
Yep. We must change for Islam and not the other way around.

What do you think.

Sounds good to me. I think the main difficulty (in terms of promoting it) is that most muslims who are currently using riba based banks seem to try to "want" to find faults with islamic banking, which I don't get. They have this misconception what islamic banking is just riba based banking which plays with words... Then they will go to the extent of actually accusing the islamic banks of doing haraam activities without a shred of hard evidence from the bank directly. Accusations without evidence is a sin according to islam.

Why so many muslims do that, I haven't figured out yet, even though they are using riba based banks which are 100% haraam.

[muzzybee]

Re: Is it ok to work in Islamic banking related Jobs ?

Sounds good to me. I think the main difficulty (in terms of promoting it) is that most muslims who are currently using riba based banks seem to try to "want" to find faults with islamic banking, which I don't get. They have this misconception what islamic banking is just riba based banking which plays with words... Then they will go to the extent of actually accusing the islamic banks of doing haraam activities without a shred of hard evidence from the bank directly. Accusations without evidence is a sin according to islam.

Why so many muslims do that, I haven't figured out yet, even though they are using riba based banks which are 100% haraam.

Thats the thing, yes there are people who say it is wrong.
But, if you are saying that then you should not be using the banking system at all.

Allah knows best.

Jazakallah khairan for your input.

[oshirowanen]

Re: Is it ok to work in Islamic banking related Jobs ?

Thats the thing, yes there are people who say it is wrong.
But, if you are saying that then you should not be using the banking system at all.

Allah knows best.

Jazakallah khairan for your input.

Exactly.

Also, as far as I can tell, the people who accuse all islamic banks of dealing with riba, base their views on "general" fatwas offered by scholars, i.e. scholars who haven't actually gone to the islamic bank to study how it works and to see if they really are dealing with interest or not. Such "general" fatwa's are fine for "general" use as a cautionary, but it doesn't make sense to use those fatwas against all islamic banks where other scholars have actually gone to "some" of those banks directly, to study how it works and to make sure everything they do is correct. Where those scholars will then actually sign a document to say that they have checked and approved the bank activities and based on what they have seen, everything looks fine.

To compare general fatwas by scholars with specific checks by other scholars, then to choose the general fatwa over specific checks doesn't make sense to me. But that's just me, everyone is free to think differently.

[Mockingjay]

Re: Is it ok to work in Islamic banking related Jobs ?

If you ask me, I will say no. The issue of Islamic bank today is still having a grey area today. At least there is still a little percentage of interest accrued.

What does exactly a bank do?

Bank will keep our money and invest it and give us profit. How do they invest? By providing loans to customers. How do they get the profit? From the additional amount paid by customers. What is this additional amount? Interest (riba). What if those banks just give loan and no interest? Well they'll go bankrupt of course.

That's bank. Wherever it is whatever it's called.

How can muslims change this?

Don't give loans. Period. Do murabaha.

What's murabaha?

Definition of 'Murabaha'

An Islamic financing structure, where an intermediary buys a property with free and clear title to it. The intermediary and prospective buyer then agree upon a sale price (including an agreed upon profit for the intermediary) that can be made through a series of installments, or as a lump sum payment.

I read somewhere that there are muslims who start this kind of business. Esp. in mortgage. There are 9 salafi ustads who build an organization that gives free interest house installment. So, they buy a house and sell it to other muslims with certain sale price and with installment. That's how they get the profit. We need more angel investors like this.

Wallahu a'lam.

[oshirowanen]

Re: Is it ok to work in Islamic banking related Jobs ?

If you ask me, I will say no. The issue of Islamic bank today is still having a grey area today. At least there is still a little percentage of interest accrued.

What does exactly a bank do?

Bank will keep our money and invest it and give us profit. How do they invest? By providing loans to customers. How do they get the profit? From the additional amount paid by customers. What is this additional amount? Interest (riba). What if those banks just give loan and no interest? Well they'll go bankrupt of course.

That's bank. Wherever it is whatever it's called.

How can muslims change this?

Don't give loans. Period. Do murabaha.

What's murabaha?

Definition of 'Murabaha'

An Islamic financing structure, where an intermediary buys a property with free and clear title to it. The intermediary and prospective buyer then agree upon a sale price (including an agreed upon profit for the intermediary) that can be made through a series of installments, or as a lump sum payment.

I read somewhere that there are muslims who start this kind of business. Esp. in mortgage. There are 9 salafi ustads who build an organization that gives free interest house installment. So, they buy a house and sell it to other muslims with certain sale price and with installment. That's how they get the profit. We need more angel investors like this.

Wallahu a'lam.

The islamic banks I use do not charge interest at all on financing. They invest in islamic approved shares, islamic approved funds, properties, and make profit from rent and not interest, where they use Ijara for rent purposes and Musharaka for partnership/financing purposes.

Do you have details of the 9 Salafi Ustads?

[muzzybee]

Re: Is it ok to work in Islamic banking related Jobs ?

If you ask me, I will say no. The issue of Islamic bank today is still having a grey area today. At least there is still a little percentage of interest accrued.

What does exactly a bank do?

Bank will keep our money and invest it and give us profit. How do they invest? By providing loans to customers. How do they get the profit? From the additional amount paid by customers. What is this additional amount? Interest (riba). What if those banks just give loan and no interest? Well they'll go bankrupt of course.

That's bank. Wherever it is whatever it's called.

How can muslims change this?

Don't give loans. Period. Do murabaha.

What's murabaha?

Definition of 'Murabaha'

An Islamic financing structure, where an intermediary buys a property with free and clear title to it. The intermediary and prospective buyer then agree upon a sale price (including an agreed upon profit for the intermediary) that can be made through a series of installments, or as a lump sum payment.

I read somewhere that there are muslims who start this kind of business. Esp. in mortgage. There are 9 salafi ustads who build an organization that gives free interest house installment. So, they buy a house and sell it to other muslims with certain sale price and with installment. That's how they get the profit. We need more angel investors like this.

Wallahu a'lam.

Thanks for your input.

So i came across this article in the general sense this is what islamic banks do.

How do the banks make money?
Banks can profit from the buying and selling of approved goods and services. The principal means of Islamic finance are based on trading, and it is essential that risk be involved in any trading activity, so banks and financial institutions will trade in sharia-compliant investments with the money deposited by customers, sharing the risks and the profits between them.

Islamic banks are structured so that they retain a clearly differentiated status between shareholders' capital and clients' deposits in order to make sure profits are shared correctly.

Although they cannot charge interest, the banks can profit from helping customers to purchase a property using a ijara or murabaha scheme. With an ijara scheme the bank makes money by charging the customer rent; with a murabaha scheme, a price is agreed at the outset which is more than the market value. This profit is deemed to be a reward for the risk that is assumed by the bank.
There are firm laws governing the types of businesses with which the banks can trade. There should be absolutely no investment in unsuitable businesses, including those involved with armaments, pork, tobacco, drugs, alcohol or pornography.

http://www.theguardian.com/money/201...money-interest

[Mockingjay]

Re: Is it ok to work in Islamic banking related Jobs ?

The islamic banks I use do not charge interest at all on loans. They invest in islamic shares, islamic funds, and make profit from rent and not interest, where they use Ijara for rent purposes and Musharaka for partnership purposes.

Do you have details of the 9 Salafi Ustads?

Can you explain how the loan without interest works? I mean can you explain how much the figure you borrow and how much you will need to pay back to them?

I could give you the details but it's in other language but I can explain how it works. The organization I mention do not provide loan at all. But they provide installments for muslims, like for buying house, cars, etc. So, literally they do buying and selling (in installment). Which is THIS is what muslim needs today!

[oshirowanen]

Re: Is it ok to work in Islamic banking related Jobs ?

Can you explain how the loan without interest works? I mean can you explain how much the figure you borrow and how much you will need to pay back to them?

I should have made this bit clear, they don't actually offer a loan, even though people do confuse them for loans. They basically buy the house with you in a joint venture

In terms of you needing more money to buy a house, if they give 100k for example, you only pay back 100k. This is the Musharaka bit where you enter a joint venture with the bank to buy a house. If the house is 200k for example, and they give 100k, that means the bank owns 50% of the house and you own the other 50%.

So the bank doesn't make a profit from a loan (so no interest). They make the profit from the Ijara section, where they will lease out the 50% of the house to you which they own as you will be using their 50% of the house plus your 50% of the house, so it's only natural for pay rent for the 50% of the house you do not own yet. So if the rent is say 1k a month, as you already own 50% of the house, your rent will be about 0.5k a month (as you don't pay rent for the 50% you already own, you only pay rent on the 50% you do not own) plus a certain percentage which goes towards buying further shares of the property every month, which slowly buys back the 100k they own, again, no interest, and the bank makes it's profit from the rent payments you give them for using their 50% of the property.

So I should not have mentioned the word "loan" anywhere, as Musharaka and Ijara principles do not include loans anywhere, hence no interest is possible.

I could give you the details but it's in other language but I can explain how it works. The organization I mention do not provide loan at all. But they provide installments for muslims, like for buying house, cars, etc. So, literally they do buying and selling (in installment). Which is THIS is what muslim needs today!

I understand how Murabaha works which is offered by the 9 Salafi Ustad's you have referred to. I just wanted to know how to contact them, as I know Murabaha is a nice concept, so is Musharaka and so is Ijara.

[Mockingjay]

Re: Is it ok to work in Islamic banking related Jobs ?

Thanks for your input.

So i came across this article in the general sense this is what islamic banks do.

How do the banks make money?
Banks can profit from the buying and selling of approved goods and services. The principal means of Islamic finance are based on trading, and it is essential that risk be involved in any trading activity, so banks and financial institutions will trade in sharia-compliant investments with the money deposited by customers, sharing the risks and the profits between them.

Islamic banks are structured so that they retain a clearly differentiated status between shareholders' capital and clients' deposits in order to make sure profits are shared correctly.

Although they cannot charge interest, the banks can profit from helping customers to purchase a property using a ijara or murabaha scheme. With an ijara scheme the bank makes money by charging the customer rent; with a murabaha scheme, a price is agreed at the outset which is more than the market value. This profit is deemed to be a reward for the risk that is assumed by the bank.
There are firm laws governing the types of businesses with which the banks can trade. There should be absolutely no investment in unsuitable businesses, including those involved with armaments, pork, tobacco, drugs, alcohol or pornography.

http://www.theguardian.com/money/201...money-interest

If it really comes with that scene that is really fine. But most of the Islamic banks I know (in my country) still provide loans to the customers. It may be a little but still it contains riba.

Wallahu a'lam

[Mockingjay]

Re: Is it ok to work in Islamic banking related Jobs ?

In terms of the loan for a house, if they loan you 100k for example, you only pay back 100k. This is the Musharaka bit where you enter a joint venture with the bank to buy a house. If the house is 200k for example, and you get a loan for 100k, that means the bank owns 50% of the house and you own the other 50%.

So the bank doesn't make a profit from the loan (so no interest). They make the profit from the Ijara section, where they will lease out the 50% of the house to you which they own as you will be using their 50% of the house plus your 50% of the house, so it's only natural for pay rent for the 50% of the house you do not own yet. So if the rent is say 1k a month, as you already own 50% of the house, your rent will be about 0.5k a month (as you don't pay rent for the 50% you already own, you only pay rent on the 50% you do not own) plus a certain percentage which goes towards buying further shares of the property every month, which slowly pays off the 100k loan, interest free, and the bank makes it's profit from the rent payments you give them for using their 50% of the property.



I understand how Murabaha works which is offered by the 9 Salafi Ustad's you have referred to. I just wanted to know how to contact them, as I know Murabaha is a nice concept, so is Musharaka and so is Ijara.

My question would be, does the bank own 100% of the house? I mean they hold the certificate, etc.? Or it's the developer (a landlord) who owns the house?

[oshirowanen]

Re: Is it ok to work in Islamic banking related Jobs ?

My question would be, does the bank own 100% of the house? I mean they hold the certificate, etc.? Or it's the developer (a landlord) who owns the house?

It's a joint venture, so both you and the bank own their respective percentages of the house. They will be the leading partner (as for obvious reasons, they will have a lot more financial power than you) in the venture until 100% of the property is owned by you. I've made some changes to my post, as I should not have used the word "loan". Technically, they do not give you a loan, even though it can seem like a loan to people who can't get standard "mortgages" out of their minds.

So just say you're the bank, and I want to buy a house, but can't afford to pay for it all. I team up with you, you pay 50% and I pay 50%. We both own the house now 50/50. I live in the house, and pay you rent for the 50% you own, and I slowly/monthly buy your 50% of the house until I have 100%. You get your 50% investment back intact, and you make a profit for investing in property. And I end up with a house I own fully which I wouldn't have been able to pay for 100% upfront, and I didn't pay interest.

These percentages can start off anywhere, but the bank would generally want you to buy 25% upfront minimum.

[Mockingjay]

Re: Is it ok to work in Islamic banking related Jobs ?

It's a joint venture, so both you and the bank own their respective percentages of the house. They will be the leading partner in the venture until 100% of the property is owned by you. I've made some changes to my post, as I should not have used the word "loan". Technically, they do not give you a loan, even though it can seem like a loan to people who can't get standard "mortgages" out of their minds.

Will look into this Ijara concept and consult to my ustad :insha:

So far I only have the halal concept of buying house is through murabaha. But will look into this again.

:jkk: