In Islamic banking, banks attract people and get money from them under various schemes and grant profit on monthly, quarterly of six monthly or any other pre determined basis. On the face of it, this investment is on profit loss and share basis. However, banks never ask investors to share loss, if any, and practically profit is always granted. Remaining within certain limits, the rate of profit is slightly varied as well. Some of these banks are also involved in grant of loans to individuals or loans to companies for personal or business purposes. For example, loan is granted for purchase of car, motorcycle or construction of house etc.
a. Is getting loan on fixed rate from Islamic banks permissible under Islamic law?
b. Are such deposits in Islamic banking permissibl?
c. Is loan allowed for construction of house and purchase of car or routine commoditie?
d. How this Islamic form of banking is different from conventional banking?
In Islamic banking, one can purchase any routine commodity at a price higher than actual under term Ijaarah. We can purchase similar goods on higher prices in installments under conventional banking and methods. How do such purchases differ from Islamic banking and how do commodities so purchased do not fall under category of Riba?