The simple principle of Islamic finance is money should not make money, there should be risk and profit factors involved in the transactions. Without work/risk/action there is no barakah in your money, and your life will be lazy/lethargic/boring. To keep humans healthy and active Riba is made haram in Islam and business (profit and loss) is made halal. In Riba, there is an exploitation of once situation to make money.
also sharia law economics encourages constant circulation of money and also prevents inflation from happening like in today's modern world where inflation exists because of interest
the bank will usually agree to buying the house that you want fully and will sell it to you with a markup on a specified length of time (20 years usually) and until the completion of the payment, you live in a house thats owned by your bank of choice. the benefits is that youre never really in debt (technically at least) or at risk of runaway interest on a nonproductive asset, but the drawbacks are the capital intensive act of buying a house whole that eventually falls on the final buyer and future customers of the bank.
The point is ,to buy a house throught the bank First the bank should buy it and then reselling it for you for extra money according to your agreement For example lets say it costs 1000$ The bank would buy it for that 1000$ and then sell it to you for 1100$ Now you buthe house and pay monthly 100% for 11 months Just for example
Let me quote an example: Say a trader bought peanuts for 50 bucks and he is selling it at 60 bucks. How is that different from him charging 16% interest over 50 bucks?? What the ruling on making money from assets? Say I bought a car on finance- how will a bank earn ?
Buying and selling for more is trade, business. Giving money for interest is what is prohibited because look at the western world rich become richer day by day and poor become more and more poor. Because of interest. Intereat grows, you are late you pay penalty and the more time you need to pay the more money bank earns. But if bank buys car that you want for certain amount and sells to you for a bigger amount. Thag amount is set in place it can't grow more that's it.
The bank will profit by buying the car for you and then selling it to you with a profit + So technically the bank has the car and you buy from the bank If you want to buy a car from someone and you dont have enough money you have two solutions 1. To take money from a friend and return it later 2.telling your bank about the car ,the bank then would buy it for a value and then charging you for profit that you are good with So there is no exponentially increasing debt overtime So The bank has just saved its assets and you are now in debt for a fixed amount of money not exponentially increasing debt As the video says
@@aymanpixel8684 Not exactly. As you say, you buy the car from the bank at a higher price than the bank paid for it. But since you don't have the money, the bank allows you to purchase a share in that car, every month at a low payment, until you've purchased 100% of shares in that car. Also, since you have exclusive use of that car, you pay rent to the other shareholders of that car (ie the bank) until you own all the shares in that car. The question you must ask yourself, are you fooling God?
It seems like there are some advantages to Islamic Banking. But what are the disadvantages, if any? Are people who aren't followers of Islam allowed to use Islamic Banks?
When a person buys a house from a bank, and agrees to paying in installments which totals higher than if paid upfront, what happens if he decides later to pay it off early? Would that then be considered 2 prices for the same asset, which is prohibited?
How about a simple example. If I want to buy a house as my families home, how does that work? Does the bank "own" my home and I lease it? Or something else?
It seems a predetermined, agreed upon amount of money to be paid back with legal backing. Way different than an agreed upon interest rate which *can and will increase in cost **if you read the fine print ***but nobody does, everyone just signs the line and lives decades in debt and preach it as normalcy to their children
that is the point of banks in Islam, to manage and save your wealth, to invest it and fund startups, not grow it by all means through interest at the detriment of all others
would be good idea to ask to many Pakistanis and Indians workers exploited in Qatar the lovely experience with Islamic financial system (no much differences with the other one)
@@bushfires1760while I don’t know much about what may or may not have happened in qatar, just because a country uses the islamic banking system does not mean that oppression is required. At the end of the video it said that the bank needs an independent board to verify that all of its actions abide by sharia law. Exploiting a worker because they are in a bad situation would most certainly be against sharia law and so in theory an Islamic bank( or any islamic institution that abides by sharia law) would not do that without facing consequences.
The sharia board is never owned by the bank and is usually either provided by the state or is formed privately away from owners and stakeholders of the bank with government oversight. If the bank does own the sharia board or has any amount of influence over it then I would assume that the government would intervene.
If an islamic bank buys a $100 000 house to sell it to me $120 000 so I don't use the interest (Riba) how and where did the bank get this money from...? A bank..?
How is the profit interest? Profit is profit, interest is the one thing that allows rich to become more and more rich day by day, while poor become more and more poor and more in debt. Without interest that's not possible
I didn't even notice that until you mentioned it. There's nothing wrong with a background soothing sound. Don't be too picky. You may not like it, but I like it, ignore it. If it bothers you so much, maybe don't watch it.
So eventually it is same. With islamic finance bank purchase the asset. And the won’t charge interest and will call it rent. All the banks are haram, they just change the name of interest as a rent.
Interest has no risk to the lender but in rent,if the buyer leaves without paying for the property, this puts a risky financial burden on the bank,Risk/Action is what Islamic banking all about. In other places they don't bare a risk regardless of the borrowers financial situation while here if he doesn't pay the mortgage,the bank is in trouble
@@MariamaEmiliaKemokaicould you please explain to me what is it about? Can I take a huge loan for a business and then pay them back without no interest and sharing profits?
When 'Islamic Banks' put the price of these so called 'house lease' or 'car lease', normally jaws will drop. The idea of renaming and redefining this and that is smart but i do strongly believe that there is a very strong reason why Islam prohibits riba. If the profit fixed by Islamic bank is as high as conventional bank loan interest ? The consequence is more less the same, the poor will still be oppressed, so whats the point. Of course that s the goal of prohibiting riba, to avoid the rich oppressing the poor. Have you heard any Islamic bank make loss? Sounds like the risk isnt shared equally between Islamic bank and loan customers ..
@@deen_squad_jnr1 i am a Muslim. Why I wish to do that? I am influenced by Sheikh Imran Hossein's opinion on riba and current slamic Bank loan system .The system still has a lot of room for improvement.
Bullshit. If i get loan from a traditional bank. I can pay off the loan with interest. But if i get loan from an islamic bank, it becomes my partner and earns profit till the end. If it earns profit for a significant or limited time,its the same traditional banking just takes more interest and if it earns profit forever its just a bloodsucker. So we should get rid of this shit.
@@planthearium908 what? 🤣🤣 Even Saudi Arabia doesn't follow your bull$h¡t isl@mic banking. Name one pisslamic country which wholly and completely follows your 'isl@mic banking'. (Hint: there're none) 😂
@@planthearium908 dude we've done islamic banking system in the 70s and 80s and let's just say.. It doesn't work. The only reason why our country didn't completely collapse was because of us and saudi oil money. So no my friend it literally doesn't work.
@@planthearium908 sure thing buddy sure thing whatever you say... And not to dismiss your majestic assumption but I spent months on it and it doesn't work. That was the whole reason why the middle East started adopting a more British style of capitalist economics rather than their older ones cause it simply wasn't sufficient enough to raise the standard of living. I could go into further more detail but it be simpler if you went and researched it yourself. It'll be more educational and less confrontational... Plus always be open minded buddy, the world moves on with time and what can't move on gets left in the past that is a fact. And the islamic economic system is one of those things. But still you don't have to take my word for it. Go do some research of your own, I'm sure you'll find it educationa,l if you want to learn instead of assume that is.. Anyways have a good day 💙
this is underrated !!! this deserve more view!!! Thank You
Good presentation but still need more details of transaction and profit losses.
Well explained. Thank you
The simple principle of Islamic finance is money should not make money, there should be risk and profit factors involved in the transactions.
Without work/risk/action there is no barakah in your money, and your life will be lazy/lethargic/boring. To keep humans healthy and active Riba is made haram in Islam and business (profit and loss) is made halal. In Riba, there is an exploitation of once situation to make money.
also sharia law economics encourages constant circulation of money and also prevents inflation from happening like in today's modern world where inflation exists because of interest
Jazak Allahu Khayran 🌸 Thank you so much!
Very Well Explained 👍
May allah reward you😊
thanx fo sharing with us
Can you show example how to buy a house based from Islamic bank system?
the bank will usually agree to buying the house that you want fully and will sell it to you with a markup on a specified length of time (20 years usually) and until the completion of the payment, you live in a house thats owned by your bank of choice.
the benefits is that youre never really in debt (technically at least) or at risk of runaway interest on a nonproductive asset, but the drawbacks are the capital intensive act of buying a house whole that eventually falls on the final buyer and future customers of the bank.
The point is ,to buy a house throught the bank
First the bank should buy it and then reselling it for you for extra money according to your agreement
For example lets say it costs 1000$
The bank would buy it for that 1000$ and then sell it to you for 1100$
Now you buthe house and pay monthly 100% for 11 months
Just for example
ruclips.net/video/CCb6uFBjkYY/видео.htmlsi=RZ17_Ve7M8Br9UfF
This video for further knowledge of why is it 1:1 not whatever else
great stuff here - is there part 2?
Nice
Let me quote an example:
Say a trader bought peanuts for 50 bucks and he is selling it at 60 bucks. How is that different from him charging 16% interest over 50 bucks??
What the ruling on making money from assets?
Say I bought a car on finance- how will a bank earn ?
Buying and selling for more is trade, business. Giving money for interest is what is prohibited because look at the western world rich become richer day by day and poor become more and more poor. Because of interest.
Intereat grows, you are late you pay penalty and the more time you need to pay the more money bank earns. But if bank buys car that you want for certain amount and sells to you for a bigger amount. Thag amount is set in place it can't grow more that's it.
The bank will profit by buying the car for you and then selling it to you with a profit +
So technically the bank has the car and you buy from the bank
If you want to buy a car from someone and you dont have enough money you have two solutions
1. To take money from a friend and return it later
2.telling your bank about the car ,the bank then would buy it for a value and then charging you for profit that you are good with
So there is no exponentially increasing debt overtime
So The bank has just saved its assets and you are now in debt for a fixed amount of money not exponentially increasing debt
As the video says
In islam if your debt is 21$ today
And you did not pay for 200 years
It would also become 21$
Not 2 million dollars
Lol
@@aymanpixel8684 Not exactly. As you say, you buy the car from the bank at a higher price than the bank paid for it. But since you don't have the money, the bank allows you to purchase a share in that car, every month at a low payment, until you've purchased 100% of shares in that car. Also, since you have exclusive use of that car, you pay rent to the other shareholders of that car (ie the bank) until you own all the shares in that car. The question you must ask yourself, are you fooling God?
It seems like there are some advantages to Islamic Banking. But what are the disadvantages, if any? Are people who aren't followers of Islam allowed to use Islamic Banks?
Yeh anyone can use islamic banks
MashAllah
Islamic banks are good but for some work operations, need of money is wanted..How do islamic bank tackle these issue
When a person buys a house from a bank, and agrees to paying in installments which totals higher than if paid upfront, what happens if he decides later to pay it off early? Would that then be considered 2 prices for the same asset, which is prohibited?
No he can't change or and if he did he has to pay the
higher price
@@zenalsham7977then How it is different than Conventional Bank?
islamic banking would get rid of all corruption
Btw If Financing is based on SIBOR or EIBOR or KIBOR then How is It different than Conventional Banking?
Need to explain more effectively
How about a simple example. If I want to buy a house as my families home, how does that work? Does the bank "own" my home and I lease it? Or something else?
If its a mortgage the bank owns it
The bank owns the house and then giving it to you for a profit
So there is no difference between islamic bank and commercial bank
This video didn’t answer the question. Tell us what differentiates the traditional bank from Islamic bank ? Thanks
It seems a predetermined, agreed upon amount of money to be paid back with legal backing.
Way different than an agreed upon interest rate which *can and will increase in cost **if you read the fine print ***but nobody does, everyone just signs the line and lives decades in debt and preach it as normalcy to their children
So in conclusion?? Is it a good system or a bad one? If its good why isn't it practice in the world? Or in most muslim countries?
Sounds like an assets management company with religious bureaucracy
that is the point of banks in Islam, to manage and save your wealth, to invest it and fund startups, not grow it by all means through interest at the detriment of all others
would be good idea to ask to many Pakistanis and Indians workers exploited in Qatar the lovely experience with Islamic financial system (no much differences with the other one)
You're just upset that your financially and emotionally broke!!! 🤣
@@asadzeethree2726 yes, no worries...I'll use your system to be saved...I assume you are living in an islamic country
@@bushfires1760while I don’t know much about what may or may not have happened in qatar, just because a country uses the islamic banking system does not mean that oppression is required. At the end of the video it said that the bank needs an independent board to verify that all of its actions abide by sharia law. Exploiting a worker because they are in a bad situation would most certainly be against sharia law and so in theory an Islamic bank( or any islamic institution that abides by sharia law) would not do that without facing consequences.
yes sure...
@@bushfires1760. Brokie! 😆
Lovely
what if the shariah board is "owned" by the bank?
The sharia board is never owned by the bank and is usually either provided by the state or is formed privately away from owners and stakeholders of the bank with government oversight. If the bank does own the sharia board or has any amount of influence over it then I would assume that the government would intervene.
If an islamic bank buys a $100 000 house to sell it to me $120 000 so I don't use the interest (Riba) how and where did the bank get this money from...? A bank..?
From depositors or in order words investors
You couldn’t explain how it works
Halfway through only
8/9/2023 Cusco perú 😮
❤
It cannot fulfill saving needs thats for sure.
Distinction without a difference. Profit is interest.
that's why its called Islamic banking , we belive profit and interest is not the same thing
How is the profit interest? Profit is profit, interest is the one thing that allows rich to become more and more rich day by day, while poor become more and more poor and more in debt. Without interest that's not possible
nice...but would be better without music when explaining something Islamic! 🤣
I didn't even notice that until you mentioned it. There's nothing wrong with a background soothing sound. Don't be too picky. You may not like it, but I like it, ignore it. If it bothers you so much, maybe don't watch it.
So telling the truth is being picky?@@User.2024.1
well said@@User.2024.1 some people are just too cringe about music
So eventually it is same. With islamic finance bank purchase the asset. And the won’t charge interest and will call it rent. All the banks are haram, they just change the name of interest as a rent.
Interest has no risk to the lender but in rent,if the buyer leaves without paying for the property, this puts a risky financial burden on the bank,Risk/Action is what Islamic banking all about. In other places they don't bare a risk regardless of the borrowers financial situation while here if he doesn't pay the mortgage,the bank is in trouble
I think you'll know the difference if you understand islamic banking better
@@MariamaEmiliaKemokaicould you please explain to me what is it about? Can I take a huge loan for a business and then pay them back without no interest and sharing profits?
@@itzblackstray6256 What you've described is a partnership.
When 'Islamic Banks' put the price of these so called 'house lease' or 'car lease', normally jaws will drop.
The idea of renaming and redefining this and that is smart but i do strongly believe that there is a very strong reason why Islam prohibits riba. If the profit fixed by Islamic bank is as high as conventional bank loan interest ?
The consequence is more less the same, the poor will still be oppressed, so whats the point. Of course that s the goal of prohibiting riba, to avoid the rich oppressing the poor. Have you heard any Islamic bank make loss? Sounds like the risk isnt shared equally between Islamic bank and loan customers ..
Why are u so obsessed to condemn Islam?
@@deen_squad_jnr1 i am a Muslim. Why I wish to do that?
I am influenced by Sheikh Imran Hossein's opinion on riba and current slamic Bank loan system .The system still has a lot of room for improvement.
Bro. The purpose is only to avoid riba, not lending house for free to you. That's not what Islamic finance is about.
Islamic banking is a scam. The rate you pay back is higher than if you were to pay interest
My brothers which islamic bank do you think is authentic and adheres to sharia guidelines, recommend for me please the non liar banks?
Bullshit. If i get loan from a traditional bank. I can pay off the loan with interest. But if i get loan from an islamic bank, it becomes my partner and earns profit till the end. If it earns profit for a significant or limited time,its the same traditional banking just takes more interest and if it earns profit forever its just a bloodsucker. So we should get rid of this shit.
Bullshit
Still doesn’t cover the answer to be replied.. I still don’t get how 5r Islamic bank works😢
Howmany.countries.fallowing.this.way.or.profit.way.....commertial.way .developement.way.for.the.people.to.thr.country.ingood.godsway.benfit.to.all
The title should be "How to collapse your country's economy in 3 months"
Islamic countries using their islamic system banking is the most prosperous economy in the world.
@@planthearium908 what? 🤣🤣 Even Saudi Arabia doesn't follow your bull$h¡t isl@mic banking. Name one pisslamic country which wholly and completely follows your 'isl@mic banking'. (Hint: there're none) 😂
@@planthearium908 dude we've done islamic banking system in the 70s and 80s and let's just say.. It doesn't work. The only reason why our country didn't completely collapse was because of us and saudi oil money.
So no my friend it literally doesn't work.
@@TheUtubers it doesn't work because you are not an expert of the system.
@@planthearium908 sure thing buddy sure thing whatever you say...
And not to dismiss your majestic assumption but I spent months on it and it doesn't work. That was the whole reason why the middle East started adopting a more British style of capitalist economics rather than their older ones cause it simply wasn't sufficient enough to raise the standard of living. I could go into further more detail but it be simpler if you went and researched it yourself. It'll be more educational and less confrontational... Plus always be open minded buddy, the world moves on with time and what can't move on gets left in the past that is a fact. And the islamic economic system is one of those things. But still you don't have to take my word for it. Go do some research of your own, I'm sure you'll find it educationa,l if you want to learn instead of assume that is.. Anyways have a good day 💙