Someone asks that is the fee Islamic bank charge in return for their service regarded as being similar to riba (interest)? What are the transactions that Islam regards as being riba?

Praise be to Allah.

Firstly:

The interest-based system on which commercial banks are based is a haraam, riba-based system that is based on lending and borrowing with riba. The bank lends money to the customer with interest, and the customer who deposits money in the bank lends this money to the bank in return for interest. Loans with interest constitute riba, regarding which there is scholarly consensus that it is prohibited.

Islamic banks are based on permissible transactions such as selling, buying, profit sharing, partnerships and other Islamically-acceptable forms of investment, in addition to the fees charged for wire transfer, benefiting from variations in currency exchange, and currency exchange.

There follows a straightforward example to explain the difference between riba-based transactions and Islamically-acceptable transactions, and how the bank benefits from doing either of the two transactions: If the customer wants to put his money to good use and make it grow, then he deposits it in a savings account in the riba-based bank, and the bank allocates to him a known percentage of interest, whilst guaranteeing his capital. This in fact is a riba-based loan, a loan from the customer to the bank. The benefit to the bank is how it uses the deposited money, which it lends to another customer in return for interest to be paid by the customer. Thus the bank borrows and lends, and benefits from the difference.

As for Islamic banks, one of the ways in which they invest is to take money from the customer and invest it in a permissible business, or to set up a housing project and the like, on the basis that it will give the customer a percentage of the profits, and the bank – as the entity that does the actual work – will also have a percentage of the profits. Thus the bank benefits from the percentage that it takes of the profits generated by the project, and its share of the profits may be much greater than what riba-based banks collect from riba, which is haraam. But in the case of profit-sharing there is an element of risk, and the bank has to try hard to select a project that is beneficial and keep an eye on it until it bears fruit.

The difference between the riba-based bank and the Islamic bank in these examples is the difference between haraam, riba-based loans and Islamically-acceptable profit-sharing in which the customer may lose his money, because there is no guaranteed protection of his capital, but if he makes a profit, this gain is halaal wealth.

The point is that the Islamic bank has many acceptable ways of making a profit, and hence these banks have begun to grow and flourish. In fact some non-Muslim countries are trying to apply the Islamic banking system, because it makes a profit and avoids much of the mischief that stems from the riba-based system and is the cause of ruin and loss.

Secondly:

Riba-based transactions are of many types, such as lending and borrowing with interest; currency exchange (selling one currency for another) and deferring hand-to-hand exchange; exchanging gold for gold in different quantities, or with the exchange to happen later; transactions which basically boil down to being riba-based loans, such as discounted bills, savings accounts, investment certificates with returns or prizes, charging penalties for late payment in the case of sales by instalments or withdrawing cash using a credit card. You may see more information on these matters on our website.

And Allah knows best.

Source: Islam Q&A

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GOD BLESS YOU

lilfreezy:
"I believe that there no Allah but God"
"I believe that Jesus is God's holy son."
"I believe that Christianity is the Only True Religion."
"lā ʾilāha ʾillā-llāh, I throw Maggi for woman yansh ."

lilfreezy:
"I believe that there no Allah but God"
"I believe that Jesus is God's holy son."
"I believe that Christianity is the Only True Religion."
"lā ʾilāha ʾillā-llāh, I throw Maggi for woman yansh ."

Why not move away from things that doesn't concern you? May Allah forgive you!

Islamic banking is growing gradually all over the globe. The issue they face here in Nigeria is intolerance and unnecessary islamophobes. Whenever they hear Islamic something, what comes to the mind of many ignorant people is islamizing Nigeria.

Upon being the bank matter,l still have to take oath to comment.May dem carry the banking,riba base loan go next neigbor..

rolams:


Why not move away from things that doesn't concern you? May Allah forgive you!

Until nairaland starts making all you moslems swear allegiance to God almighty before commenting on Christian threads, you will keep seeing me here

Alhamdulillah....
now operating an account with Jaiz bank.
my Allah make the working relationship mutually beneficial
ameen

lilfreezy:
"I believe that there no Allah but God"
"I believe that Jesus is God's holy son."
"I believe that Christianity is the Only True Religion."
"lā ʾilāha ʾillā-llāh, I throw Maggi for woman yansh ."

May the Amighty Allah forgive you... Amin

Why must I accept to be a Muslim before I comment? You guys are truly terrorists and all your actions prove it

Informative thread

lilfreezy:
"[s]I believe that there no Allah but God"[/s]
"I believe that Jesus is God's holy son."
[s]"I believe that Christianity is the Only True Religion."[/s]
"lā ʾilāha ʾillā-llāh, I throw Maggi for woman yansh ."

You need to educate yourself before you talk
What is allah
Allah is God. Allah is the Arabic word for God in Abrahamic religions. In the English language, the word generally refers to God so use your sense and do research about something before you talk.. It easier if you can educates yourself just by doing some research.. Don't be my pastor said my pastor said

Banks support businesses

marviessss:
I think this moslems are trying to force ppl to deir religion why will you be asking me to accept Allah,b4 I can even comment
SHM for Mohammed for brainwashing you guys

Olawalesmarter:
Why must I accept to be a Muslim before I comment? You guys are truly terrorists and all your actions prove it

Before you made a comment, a declaration appeared and you fully accepted it by clicking yes yet you wrote this hogwash. When we tell people that you guys are stvpid with no iota of sense and extremely gullible it looks as though we hate you hence our critics.

Was it the muslims that made the declaration?
Do they run or ow on nairaland?
Was the muslims that made you accept the declaration?

Your hatred, bigotry, intolerance and hypocrisy wont stop them from.worshiping their God. The earlier you know all these ills you guys posses will kill you faster than anything the better.

Your fellow Christian terrorist Brenton Terrant recently killed muslims for jesus and I'm sure you are happy

Excaperx:
Terrorists

lilfreezy:


Until nairaland starts making all you moslems swear allegiance to God almighty before commenting on Christian threads, you will keep seeing me here

Go to the religious section and check out the Christian posts, there aren't Muslims there. Your friend call Muslims here a terrorists for no reason, it's because of people like him and you that's why seun had to secure our space.

lilfreezy:


Until nairaland starts making all you moslems swear allegiance to God almighty before commenting on Christian threads, you will keep seeing me here

Must you comment on Muslim thread? Besides, why should I comment on Christian thread?