Sharia Compliant Account is better than commercial accounts if you are engaged with an Islamic bank
Sharia Compliant Account is an account option offered by Islamic banks which do not follow the commercial banks rules. It is basically held as an interest free account. Since profiting via interest on one’s money is strictly prohibited in Islam. And it is obligatory to Muslims to make sure their money is far from dealings of interest rates. Besides the interest part, one more thing which Sharia compliant account makes sure about is where your money is invested. The money kept in a bank account cannot not be invested in businesses which deal in goods and services that are running on interest rate system. One such example of such prohibited goods or services are alcohol and haram food. According to Sharia Laws in Islamic Financing, money can be used for your benefits in an exchange of goods. Sharia Compliant Account is best suited for people who are not will to take interest on their savings or allow their money to be invested in businesses that are prohibited. So Sharia compliant bank makes sure the transactions your money will be used for are according to Islamic laws and does not involve prohibited activities. Since, investment on alcohol, pork, dead animals, tobacco, or weapons are not allowed. You might wonder how sharia compliant account might benefit both the bank and the account holder. So there is a profit / loss sharing rule between the investor and the bank. Now how does this works, is that there is no fixed interest rate that would be give on specified time period on the savings account. But the amount of profit gained from the money invested from your Islamic account will be shared between the Islamic bank and you. If the profit is high, then higher rates will be transferred to you if the investment fails to profit and makes a loss, then the amount will bored by the bank and you.
This is the way of banking that makes Sharia compliant Account smooth and easy to do business in Dubai. The argument on interest is vast and we can challenge it at different forums. And to deal with this most Islamic Sharia advisory board member came to conclusion to put an upper limit to the percentage of a company’s interest income. Since, almost every company has makes a profit from interest. So, the members decided to deal with only companies who profit in the certain limit of interest. And avoid the ones who surpass this limit. This approach makes sense in some aspects though. It is important to note that not every Sharia compliant bank follows this particular attitude towards interest. And if they do, they are obligated to inform this to the Sharia Compliant account holder.
If some amount of money is invested in a property that is to be mortgaged to an applicant then the Sharia compliant savings account owner has an entitlement to the property. To profit from this investment the bank charges rents from the leased property owner for the lease until the total payment is completed. Sharia Compliant current account holders also are required to pay zakat once in a while. This zakat is deducted when and only when it is necessary and the sharia compliant account holder is obligated to. Due to its focus on tangible assets and business regarding the transactions, sharia compliant account and banking not only benefited Muslim countries but also made a great impression on Western society as well. England is one of such example of adopting this banking. And according to reports England’s real estate has made real improvement ever since the integration of Islamic Financing regarding the home loans. Many Englishmen no opt in towards opening Islamic account and make sure their money is in better and transparent use for transactions. That being told, Sharia compliant account make a good fortune for all the stakeholders and provide a balanced economical system. This type of banking has been proved to be the backbone of UAE and Dubai’s economy. Making it one of the strongest, Sharia Compliant account and banking has made people life very easy. To take such type of services one should approach Mashreq bank of Dubai for easy and best services.