Generally
speaking all interest free banks agree on the basic principles. However,
individual bank differ in their appreciation. These differences are due to
several reasons including the laws of the country, objectives of the different
banks individual differences and banks circumstance and experiences etc.
THE SALIENT FEATURES COMMON TO ALL BANKS
Deposit Account: All the Islamic banks have three kinds of deposit
account current, saving and investment.
·
Current or demand
deposit accounts are virtually the same as in all commercial banks. Deposit is
guaranteed.
·
Saving deposit
accounts operate in different ways. In some banks, the depositors allow the banks to sue their money
but they obtain a guarantee of getting the full amount back from the bank. Bank
adopt several methods of inducing their client to deposit with them but no
profit is promised. In others savings account are treated as an investment
account but with less stringent conditions as to withdrawal and minimum
balance.
·
Investment
account: Investment deposit are accepted for a fixed or unlimited period of
time and the investors agree in advance to share the profit or loss in a given
proportion with the bank. Capital is not guaranteed
ISLAMIC ECONOMIC ORDER
Islamic
banking is an instrument for the development of an Islamic economic order. Some
of the salient features of this order may be summed up as:
1.
While permitting
the individual the right to seek economic well being, Islam makes a clear
distinction between what is halal (lawful) and what is haram (forbidden or
unlawful) in pursuit of such economic activity.
2. While acknowledging the individuals right to ownership
of health legitimately acquired Islam makes it obligatory on the individual to
hoard it, kept it idle or to surrender it.
3. While allowing an individual to retain any surplus
wealth, Islam seeks to reduce the margin of the surplus for the well being of
the community as a while in particular the destitute and deprived section of
society by participating in the process of Zakat ( a tax on wealth that is
distributed to the needy.
Viewed as a whole, the economic system envisaged by
Islam aims at social justice without inhibiting individual enterprise
beyond the point where it becomes not
only collectively injurious but also individually self destructive.