Product of Islamic Banking

Islamic Banking Products

Some products and services provided by Islamic banks include:

1. Courier or deposit

a. Al-Wad'iah (custody service)

    is the fund custodian services for which the depositor may withdraw funds at any time. With the bank is not obligated wadiah system, but alllowed, to give a bonus to customers.

b. Mudarabah deposit

    Customers save money in the bank within a certain time frame. The advantage of investing in the funds of the bank customers will be shared between the bank and customer with a certain profit sharing ratio.

2. For Result

a. Al-Musharaka (Joint Venture)

   the concept is applied to a model of partnership or joint venture. Benefits achieved will be shared in an agreed ratio while losses will be shared based on the ratio of equity owned by each party. The fundamental difference with the concept of mudaraba is in no management interference management whereas no interference mudharabah.

b. Al-Mudaraba

    is an agreement between the capital provider and an entrepreneur. Any benefits achieved will be divided according to certain agreed ratios. The risk of loss is borne fully by the Bank except loss caused by mismanagement, negligence and irregularities such as fraud the customer, fraud and abuse.

c. Al-muzara'ah

    is the bank providing financing for customers who are engaged in agricultureal/ plantation on the basic of the results of the harvest.

d. Al-musaqah

    is a more simple form of muzara'ah, where customers only responsible for maintenance, and in return customers are entitled to a certain ratio of the crop.

3. Buying and Selling

a. Ba'i Al-Murabahah

   is the distribution of funds in the form of buying and selling. Bank will buy the required items a nd then resell the service users to service users with inflated prices determined in accordance bank profit margins, and service users can repay the goods.

b. Ba'i As-Salam

    Bank will buy the required items at a later date, while the payment is made in advance. Items purchased must be measured and weighed clear and specific, and the determination of the purchase price by the good pleasure of the whole between the two sides.

c. Ba'i Al-Istishna

    As-Salam is a special form in which the price of goods can be paid when the contract, paid in installments, or paid in the future. 

4. Rent

a. Al-Ijarah

    is a contract of transfer of rights to the goods and services through a lease payment of wages, without being followed by the transfer of ownership of the goods themselves.

5. Service

a. Al-Wakalah

    is a contract in islamic banking transactions, which is contract in accordance with the principles applied in the Islamic Shari'a.

b. Al-Kafalah

    is guarantee given by the insurer to third parties to fulfill the obligations of both parties or incurred, in other words, a shift of responsibility that is guaranteed to hold on the responsibility of others as collateral.

c. AL-Hawalah

    is an agreement in which the displacement in practice transferring debts from people who owe dependents dependents who are obliged to pay the debt (eg, agency debt takeover).

d. Ar-Rahn

   is a contract in Islamic banking transactions, which is a pledge agreement in accordance with shari'a.

e. Al-Qardh

    is one of the convenants contained in the Islamic banking system which is none other than loans, in cash or otherwise without expectation of reward or interest.