How do Islamic banks reward their depositors since payment of interest is not allowed?

In a conventional bank you’re rewarded by being paid interest for the money you have stored within the bank, give that interest is haram, how do Islamic banks reward their users?

What are the major Islamic banks out there? And are there any which haven’t been highly scrutinised for not being truly halal?

One way I think it works is:
The depositor is an investor, whose money is used by the bank to make investments. With an agreement over profit/loss %, the depositor is rewarded with profit if the deposits used for investing leads to an increase in the investment’s value.

However the profit sharing aspect is something that you could just derive from an investment management company, so not sure how banks differentiate their services

So the name that come to my mind - though I’ve not used any or know of their halal status - are Al-Rayan bank. I don’t know of any others but I’m sure there are some more

So I think the differentiator would be how liquid your money is. For a bank account you need it accessible and withdrawable immediately. For example you wouldn’t use Wahed like a bank account because you can’t make payments to others through it and withdrawal takes time

I’ll be honest I don’t know how this can be done without interest. Maybe Sukuk ?

Ah yes I believe they were called something like islamic bank of Uk in the past

Perhaps the bank takes the risk of allowing you to use a certain % of your current account balance whenever you want. And the rest is primarily used to invest.

That would Theoretically make sense but I imagine there’s be too many cases where that “guessing of the threshold” leads to issues? Would be interesting if others know for sure how these banks make money

In this country, I have not heard of an Islamic bank that hasn’t been scrutinized or condemned. But good question, maybe there are islamic banks that run fully shariah compliant.

Agreed, maybe due to my lack of knowledge, but I only see it with interest. Banks will always resort to this.

What if the banks ask the customers if they can take a percentage of their money, and invest it, then give the money back made plus the money they made with the investment and the bank charges an admin fee and labour fee. Both wins right?

I was going to name them in another thread to not be as “Islamic” as they claim but thought it might not be allowed lol.

Yes I agree. I haven’t come across a “Islamic” bank that has been totally “Islamic” and didn’t do things in the background. They haven’t been scrutinised for no reason. Very misleading to those who want to do things halal. I’m yet to come across a bank that isnt questionable

Yeah so previous Islamic banks would give you a percentage of profit on the loans they create with the money you deposit.

Yeh, hoping Wahed can have a banking facility soon

If there isn’t shared profit shared risk, then it’s haram

That would be really cool.

Could you expand on this please…