The Islamic Commercial Law Series (1): Standards for Services Offered in Shari'ah Compliant Banking

Posted on: 17 June 2015

بسم الله الرحمن الرحيم

i) Standards for Services that are Lawful for an Islamic Bank to Offer

a) Bank Deposits and Accounts

1) Definition

2) Comparing Conventional Deposits to Shari'ah Compliant Deposits

3) In Contrast to a Loan

4) Details on Shari'ah Compliant Deposits

5) Types of Cash Deposits and Accounts

- Current Accounts

- Savings Accounts

- Investment Accounts

b) Financial Instruments

1) Definition  

2) Particulars

3) Functions

4) Types

- Bills of Exchange

- Checks

- Bills to Order

5) Details on Shar'iah Compliant Financial Instruments   

- Fees Charged on Financial Instruments

- Mortgaging Financial Instruments 

c) Money Transfers

1) Facts on Money Transfers

2) Types  

- Domestic Transfers

- International Transfers

3) Details on Shari'ah Compliant Money Transfers

- Domestic Transfers

- International Transfers  

d) Documentary Credit

1) Facts on Documentary Credit

2) Types

- Documentary Credit Completely Covered by the Client

- Documentary Credit Completely or Partially Covered by the Bank

e) A Bank Guarantee or Letter of Guarantee

1) Facts on Letters of Guarantee

2) Particulars

3) The Difference Between a Letter of Guarantee and a Letter of Credit

4) The Difference Between a Letter of Guarantee and an Agreement of Guarantee   

5) Types

6) Letters of Guarantee in an Islamic Bank

7) Details on Shari'ah Compliant Letters of Guarantee

f) Cards

1) Definition

2) Uses

3) Features

4) Types

- Debit Cards

- Charge Cards

- Credit Cards

5) Details on Shari'ah Compliant Cards

g) Currency Exchange [Sarf]

1) Definition

2) Evidence of Legislation in Islamic Law

3) Types

4) How the Service Functions

h) Loans

i) Giving Precedence to Other Services over Loans

j) Other Banking Services that an Islamic Bank May Provide

ii) Some Services that May Not be Rendered in Shari'ah Compliant Banking

a) Discounting Financial Instruments

1) Facts of the Discounting of Financial Instruments

2) How it Works

3) Discerning Usury on Late Payments

4) Selling a Debt

5) The Fiqh Council’s Resolution

b) Loans and Overdraft

1) Loans

2) Overdraft

c) Letters of Credit not Covered  

d) Interest-Bearing Deposits