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Well there were no banks at the time of the Prophet ﷺ as far as I am aware. So there was no banking either - Islamic or otherwise
Therefore the argument to say there was never Islamic banking is redundant because there was never normal banking either
Also if I’m not wrong, banking and such matters would come under Muamalaat not Ibaadaaat. Therefore whilst with Ibaadaat where things are Haram until there is precedent to say it’s Halal, with Muamalaat things are actually halal until there’s a precedent to say they are Haram.
So as long as Islamic banking isn’t doing anything Haram, it would be halal by default
Well the prophet was known to store wealth for people. However, I believe the concept here is storing wealth for a long term period and using that wealth for loans/ murabaha contracts or ijarah contracts or for investing.
That’s true, halal until proven haram. I suppose, referring to my previous reply, the banking contract could stipulate stored wealth will be used to make prophet using the aforementioned contracts. However, this requires for people to be using savings accounts or for people to have there wealth locked in. There wealth wouldn’t be all that liquid if locked into a murabaha contract.
But that is an example of personal storing of wealth. Banks are an centralised institution setup for that purpose. I’m pretty sure that for the large majority of people, having a trusted, government supported institution to safeguard their money significantly improves our quality of life not having to worry or manage that money ourselves. In fact it also makes payments and transfers magnitudes more convenient and efficient.
When one is then able to turn to Islamic banks which we assume are free from the impermissible and unjust services and operations of a normal bank then surely it’s a win win?
Interesting thought, but it would be more fruitful to debate aspects of Islamic banking as opposed to it as a concept
Although I am aware that Islamic banking has acquired a particularly negative reputation for doing the same as conventional banking but using Islam to back it up
yesss, was going to mention this. The prophet did store money for people because they trusted him. In similar cases, we trust the government and the banks to keep our money safe, and it has been for as long as II can remember. Only recently, have I learnt that banks are cheeky and they use our money and invest in stuff that arent even halal!!
I have heard, they just use the word islamic, but they aren’t actually islamic, would love to hear someones thoughts on this who has studied about them.
With banking itself, and islamic banking, we can’t escape the card transactions and all our money online anymore. We have to adapt towards it until all electricity and technology fails, we are required to start our own banks
The aspect of mudharaba seems plausible and permissible- deposits are invested and an agreed % if split between the bank and depositor depending on the success of the investment
But Wahed probably do something very similar and it isn’t a bank so I presume there are other problematic areas for Islamic banking
This article references some of the key terms used in Islamic banking and their relevance
I am all for the win-win, I have heard wahed is opening its own bank soon, sign me up!!
For those that don’t know what murabbaha is and such, here is a good video on it.
What I intended was that there is precedent for the storing of wealth, and also a clear case of need. However, the liability is different. If a person is robbed, they are not liable. If a bank is robbed they are. Definitely the banking system makes wealth management easier.
This definitely true, most Islamic banks just look for a way to make interest halal. They’ve not been innovative at all and have just copies the same debt base model.