The ABC’s of Islamic BankingMay 3, 2020 at 11:51 am
Islamic banking is a sharia compliant way to finance. There are certain rules that need to be followed. These institutions need to avoid any kind of haram like la riba. Charging interest is strictly forbidden.
There are other requirements. Complying with sharia law means these institutions are not allowed to invest in gambling, pornography, alcohol or pork. We have put together a basic overview so that everyone will be familiar with this type of banking. Islamic finance is the way we put together sharia compliant mortgages.
Here’s some more of the things you need to know about how this works.
- One of the biggest principles behind Islamic banking is the fact that Allah owns all wealth. That means that we are only trustees and need to promote justice. Muslims are allowed to enjoy wealth provided they spend it using sharia compliant methods.
- People’s individual needs must work with the society they live in. All Muslims need to consider their communities when enjoying wealth and money. This includes promoting equality and justice in their economic activities. This is the foundation for avoiding la riba.
- There are some other things that need to be rejected to be sharia compliant like gharar. The word itself is Arabic and it means to delude or cheat. Any transactions that are based on this are not clear or ambiguous. This is why they need to be avoided. Not all the people involved can make an informed decision. Gharar can occur when there’s not enough information shared between two parties in the transaction. Islamic banking avoids this situation to stay sharia compliant.
Ijara Canada is all about putting together a framework so you can avoid la riba and Gharar. The home financing program that we structure for you was established in 1996. It’s called a lease to purchase program or a lease to own arrangement.
The process is simple. You can choose a property, make a down payment, and the title is held by a trust. This program is open to anyone in Canada and the United States who is looking to get a finance product that’s sharia compliant.
More Things Islamic Banking Avoids
There are a few other things Islamic banking avoids. For example, to be sharia compliant any material pursuit has to balance out with someone’s spiritual needs. This balancing act between economic activities and spiritual well-being is the key to being sharia compliant.
Remember that non-Muslims and Muslims alike can find the benefits in sharia compliant products. It’s important to remember that many of the tools that cause economic crises are not permitted by sharia. That’s why Islamic banking and the products involved are enjoying a new popularity.
Residential Loan Programs
We offer residential loan programs available to clients in Canada or the United States. Take a look at our website for detailed descriptions about how these programs work in Canada and America. We make sure the Islamic banking institutions we work with are sharia compliant