Islamic Banking

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Islamic Banking

A system of banking that only offers products that conform to the sharia, or Islamic law. For example, in Islamic banking, checking and savings deposits do not accrue interest. They either lie dormant until withdrawal or are invested. Because this involves higher risk than conventional banking services, various highly technical products have been developed to mitigate risk and generally imitate "regular" banks as much as possible while still complying with Islamic law. Considerable debate exists as to whether these Islamic banking products are in fact sharia-compliant.
References in periodicals archive ?
On the business day prior to each periodic distribution date (i) the servicing agent will pay amounts reflecting the returns generated in respect of the relevant wakala portfolio into the relevant transaction account; and (ii) for a wakala/mudaraba series, the mudarib will also pay, in accordance with a pre-agreed profit sharing ratio, amounts representing the rab-al-maal's share of the returns generated in respect of the relevant mudaraba portfolio into the relevant transaction account.
Trade Products: Import Murabaha; Islamic Export Refinance; Wakala Istithmar Pre Manufacturing; Wakala Istithmar Post Manufacturing; Trade Services; Letters of Credit and Letters of Guarantee.
Al Madina Takaful saw a drop in Wakala fees to OMR 3,847,574 from OMR 3,929,187 a year earlier.
The duration of the Wakala is one week, so it is a handy tool for short-term liquidity management of Islamic banks.
The one-week wakala contracts, offered to Islamic retail banks every Tuesday, will allow the banks to deposit excess funds with the central bank, which will invest their money in portfolios containing sukuk.
This is EXIM's first Sukuk issue and is structured as a five year Wakala Sukuk priced at five year US Treasuries plus 140bps which will yield approximately 2.
In Malaysia, and perhaps worldwide, this is mainly done through the application of several nominate contracts such as wakala bi ajr (remunerated agency), mudaraba (profit sharing), and ji'ala (reward).
The Old City of Nablus is the best starting point; we were there just a few months ago to inaugurate the renovation of the EU funded project Khan Al Wakala which is only one of the many landmarks of the Old City," said EU Representative John Gatt-Rutter.
Islamic banking therefore uses various principles recognised as Sharia compliant such as Ijara (leasing), Musharaka (partnership) and Wakala (agency agreement).
Bank Nizwa, Oman's first Islamic bank, continues to facilitate the development of the domestic Islamic interbank through the execution of Wakala agreements, a press release said.
Bank Alkhair jointly led the sukuk program, which is based on the Islamic Wakala structure.