Many people wrongly believe that Islamic banks will give them interest-free loans to finance their projects or their belongings. But they forget to ask themselves the following question: How can the Bank believes that the coverage of various expenses (salaries of staff and rental agencies) If the loan was granted without the Lord? And even how the investor in the bank's capital to reap illegal profits from his investment, work, risking his head? The Bank is not a charity, and thus should generate revenues of Islamic banking transactions to cover the expenses of the institution of banking profits for investors, but without resorting to usury and trade in the funds.
The prohibition Riba in my humble opinion, makes the loan an act of charity such as charity and not a means of funding. This treatment (ie, loan) benefit only to the borrower and the lender's exposure to risk, where they will recover in, best, but its capital, was exposed to the risk of non-recovery of the entire capital of the borrower. It is our religion loan is better than charity because the Messenger of Allah peace be upon him: "I saw the night of family me at the gate of Paradise written: charity ten-fold, and the loan eighteen. I said: O Gabriel, what about the loan is better than charity? Said, because the liquid is asking and has, and the borrower does not Istkarz only need "(Narrated by Ibn Majah).
Prohibition of usury makes the loan process, then a non-profit, so Islamic banks adopt different approaches in funding. Approaches based on participation or Murabaha trade in allowance money that banks exercised usury. The philosophy of Islamic finance in many of the features and advantages. Perhaps most importantly, they make of goods or the project, which will be financed by the main criterion for acceptance of the Islamic Bank for the financing. With riba-based bank focuses primarily on the ability of the borrower to repay the capital loan and interest: if he is rich and able to repay the amount you want to borrow (against the mortgage of property or goods, for example), the bank loans the interest-based and low-interest easily. On this fundamental difference between the philosophies have several consequences, Nfsalha as follows:
1 - not the possibility of financing products forbidden:
Islamic banks are dealing with traders Murabaha or Ijara or participate, making it good for traders to buy and then sell them at a profit, or share them in their trade against the sharing of profit and loss. In both treatments can not be for the trader to trade in taboos such as alcohol or pork or gambling because the financial sponsor (Islamic Bank) can not be traded in a commodity because Islam is haram prevents him from it. On the other hand, finds no objection to riba-based bank lending to a rich merchant, trading in the taboo. What matters is the ability of riba-based bank to pay the merchant, not what he would do with money.
2 - promote equality between the contractor and the contractor, the rich in poor access to finance:
Islamic banks funded projects and investments and contracting by speculation or participation, rather than loans. So then the Islamic Bank partner for student finance a specific project, shared with him the profit and loss. This can not be approved by the Islamic Bank to finance the project unless the project is uncertain ability to succeed and make profits. So Vischr competencies and capabilities to study the project also requires proficiency in student funding. In the case of interest-based financing bank what matters primarily is the ability of students to repay the finance capital of the loan and interest. If the latter was rich, the bank is not interested in economical efficiency of the project or its owner, because the borrower is essential to ensure the bank is essential not to lose.
Through this difference in standards, we can conclude that the Islamic Bank is equal to the contractors rich and poor in access to finance, because what matters is the bank's profitability of the project and not the physical condition of Dahbh. On the other hand facilitate the bank's interest-based Tax Office on the rich to get richer and the funding Vyazdadon richer. The difference between the two standards, this financing, the Islamic Bank makes deal with a wider segment of investors and contractors compared with riba-based bank, which focuses its dealings with the rich. This contributes to the Islamic Bank in the development of the economy, more than interest-based counterpart. Vtamoalat first distributed to a larger number of contractors and on smaller projects, which distributes wealth in a broader and larger, so the higher rates of development. Only economists, the SMEs usually produce greater economic growth of major companies. The distribution of wealth and lack of focus in the hands of a few people contribute effectively to increase the pace of growth.
3 - promoting transparency and reducing tax evasion:
Generally, all parties seeking economic - within the limits of reasonable and permissible - to achieve maximum profits and minimal losses. For example, when bank financing for a project, each seeks from the bank and the holder of the project is to maximize profits. Riba-based bank, interested in restoring its capital and interest, albeit at the expense of the bankruptcy of the project contractor. And contractor-funded care about interest-based loan repayment to be liberated from the control of the bank. If the objective of the contractor to achieve the greatest amount of wealth for himself, he resorted to permit profit less than the real profits of the project to evade tax. In the case of Islamic finance can not be of the Islamic Bank to reap a profit only if the project is profitable, so the bank's target to achieve the project the largest profit possible. To ensure a profit, watching the bank, during the entire period of the partnership, the contractor and the project. So go all the way through the Islamic Bank to the contractor to falsify profits (because that is not in favor of the banking institution), which contributes to the reduction of escape and evasion of taxation.
In the fight against corruption, Islamic finance can contribute to the reduction of endemic or epidemic in our country, namely the phenomenon of performance under the table in the trade of the property. In the case of asylum, for example declining to participate to the financing of the property, may be in the interest of acquiring the property that is not paid under the table to the seller.
Islamic finance contributing to automatically reduce corruption and tax evasion. They also contribute to the enhancement of transparency, since they are directly funded goods or projects to be funded, while it may lack transparency in the usury loans to persons or companies that do not know what to do Baltmwilat obtained.
By Maaz B. Kandil
Commission Inferno Review