Hajj and Sharia Compliant Financing


#1

On my recent trip to Bahrain, I noticed there's advertisement for Hajj by bank. It went something like: Plan your Hajj with us. We offer financing as low as 5.6 APR.

I thought that you required to make the Hajj debt free. Why is this banking encouraging people to incur debt to make one of the most holiest pilgrimages in Islam? Also this bank is offering non-Sharia compliant product to Muslims to go to a Muslim event. Don't you see the contradictory?

I think Sam777 can elaborate more on Islamic banking. Based on my experience, Sharia compliant loans are more expensive to the bank and clients. That's why Muslims are switching to conventional financing and HSBC is pulling out of Islamic financing business.


#2

To be honest, the concept of sharia banking seems to be an absolutely ludicrous concept. Yes, there's no interest, but often it's replaced by a monthly 'fee' which basically amounts to the same thing as interest anyway. It's a pure case of calling one thing by two names.

Within my own country of Britain, there's the Islamic Bank of Britain and also a sharia account ran by Lloyds TSB, as well as some others. I have a flyer for the Lloyds sharia account and this is approved by 6 different sharia experts, but is purely limited to current accounts, business and student accounts. There is little option for sharia-compliant mortgages or other forms of finance, and as far as I can tell, only the Islamic Bank of Britain offers anything like this.

As to the issue of Islamic mortgages, I looked at this and a typical scheme is more expensive for everyone concerned, as you say. Usually the way it works is that you essentially are on hire-purchase, where the amount you pay covers bank costs and also increases your share in the property until the point where you own the property in its entirety.

I've certainly seen Muslims with ordinary, interest-paying, debit and credit cards, and going to non-sharia banks for their money.

With regard to your question about the Hajj, I can't understand it either. One credit card (yes, a credit card,which again has the issue of interest) has started putting Qibla compasses on cards to help Muslim customers find the direction of prayer, which to my mind seems highly contradictory too.


#3

ISTM that if the amount of the fee does not increase over time, you could technically say this is not interest.

A compass on a credit card? How does that not mess up the magnetization on the card ???

Shalom and ICXC NIKA


#4

[quote="GEddie, post:3, topic:302268"]
ISTM that if the amount of the fee does not increase over time, you could technically say this is not interest.

A compass on a credit card? How does that not mess up the magnetization on the card ???

Shalom and ICXC NIKA

[/quote]

Maybe there's some sort of protective layer between the magnetic strip and compass? :shrug:

Here's the article: dailymail.co.uk/news/article-2217105/Muslim-MasterCard-Compass-pointing-Mecca-embedded-new-bank-card.html


#5

[quote="MugenOne, post:1, topic:302268"]
I think Sam777 can elaborate more on Islamic banking.

[/quote]

[quote="Kouyate42, post:2, topic:302268"]
To be honest, the concept of sharia banking seems to be an absolutely ludicrous concept. Yes, there's no interest, but often it's replaced by a monthly 'fee' which basically amounts to the same thing as interest anyway. It's a pure case of calling one thing by two names.

[/quote]

Well said Kouyate42 :thumbsup:, yes there is no Islamic banking system anywhere in the world, it's a big lie, for example here in Saudi Arabia it's impossible to get any loan without "service fees"!!! which is another word for the interest.

On the contrary, those banks in Saudi Arabia use the Islamic word to steal money from their clients, all the current and saving accounts are interest free accounts, that means clients get 0% interest on their money inside the bank because of the dogma prohibition while the bank book all that unclaimed interest to himself.


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