Is there no interest on taking loan from Islamic bank? Islamic banks are run according to Shariat law, hence only those rules which are correct according to Islam are followed here. Usury has been declared haram in Islam.
Is there no interest on taking loan from Islamic bank? The banking sector is growing rapidly all over the world. To improve their lifestyle, people are no longer hesitating in taking loans from banks. You will find more than half of the youth working in big cities who are paying EMI of some loan every month. Banks make their money from the interest received on these loans. But what if we tell you that there is a bank which does not charge interest after giving loan. Let us tell you about this bank.
What is Islamic bank?
Islamic bank means a bank which runs according to Shariat law. These banks are different from normal banks. The biggest difference among these is interest. Actually, these banks do not charge interest from their customers after giving loan. Apart from this, if someone deposits his money in these banks, then these banks do not even give him interest on that money. Whereas, other banks give you interest on depositing money and charge you interest on taking loan.
Why do these banks do this
As we told you above that Islamic banks are run according to Shariat law, hence only those rules are followed here which are correct according to Islam. Usury has been declared haram in Islam. That means you can neither take nor give interest from anyone. You have to return only that much money you take from these banks and you will get back only that much money you deposit.
Special rules of Islamic banks
These banks follow some special rules. The first rule among these is Mudarabah. This means sharing profits and losses among themselves. That is, if the bank makes profit, it will share it with its customers and if it incurs loss, the customers will also have to bear the loss of the bank. The second rule is Musharafa. This means doing halal business to help each other.
The third rule is Waadiyyah. This means saving money. That means protecting the money deposited by customers in banks. The fourth rule is Murabahah. This is a kind of sales contract. In this, both the buyer and the seller agree to pay a price higher than the market price for the goods being sold. The fifth rule is Ijra. Ijara means giving any immovable property on lease. This is the biggest source of income for Islamic banks.