Principles of Islamic banking and finance/PIBF202/Islamic banking products/Video signpost
In this video, Dr. Shamim Siddiqui from Hamdan Bin Mohamed Smart University, provides an overview of Islamic Banking products
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Video transcript
Islamic banking products are aimed at investors who want to comply with the requirements of Shari`ah. The most distinguishing component of Islamic finance is the banning of interest. Other components include the emphasis on equitable and fair contracts that minimizes the chances of any wrongdoing by any party. It is also desirable to link financing to productivity, generation of income through profit and loss sharing arrangements, and avoid the gambling like business transactions. Deposits as a common term in banking and finance industry is related to the motive of safekeeping. The Shari`ah also deals with the perception of deposit under the amanah or wadiah accounts which is same as safe keeping. However, Islamic banks' intention while accepting money as deposits is not the safekeeping and to return it in full on demand but to use it to generate income. Moreover, Islamic banks also have special accounts that describe how the deposits made under them will be utilized. In this section you will be introduced to deposits from Islamic banking perspectives, as well as different categories and features of deposit products in Islamic banking. We will explore the equity-based Islamic financing products namely the mudharaba and musharaka, which falls under the category of profit-and-loss sharing (PLS). We will also discuss here in detail how musharaka mutanaqisa, an updated form of musharaka works in modern Islamic banking.
