What is Islamic banking?

Islamic banking refers to a system of banking or banking activity that is consistent with the principles of the Shari'ah (Islamic rulings) and its practical application through the development of Islamic economics. Shari'ah prohibits the payment or acceptance of interest charges (riba) for the lending and accepting of money, as well as carrying out trade and other activities that provide goods or services considered contrary to its principles.

Are the products offered by Public Islamic Bank meant for Muslim only?

No, the products offered by Public Islamic Bank are for all individuals regardless of their race and religion both Muslims and Non-Muslims as well as to business entities.

Is it true that Islamic banks are perceived by the public to be paying interest but addressing it as profit on trade and investments?

No, Islamic banks accept the deposits either on profit and loss sharing, Wadiah or on Qard basis. These deposits are deployed in financing, trading or investment activities by using the Shariah compliant modes of finance. The profit so earned by the bank is passed on to the depositors according to the pre-agreed ratio or granting hibah, therefore, cannot be termed as interest.

The end result of Islamic Banking and Conventional Banking is the same. Why do they appear similar?

The validity of a transaction does not depend on the end result but rather the process and activities executed and the sequence thereof in reaching the end. If a transaction is done according to the rules of Islamic Shariah, it is halal even if the end result of the product may look similar to conventional banking product.

What are the basic principles of Islamic banking?

There are at least six basic principles which are taken into consideration while executing any Islamic banking transaction. These principles differentiate a financial transaction from a Riba/interest based transaction to an Islamic banking transaction.

Does the operation of Public Islamic Bank fully comply with the requirements of Shariah?

The business operations of Public Islamic Bank are under strict observation and endorsed by Public Islamic Bank’s Shariah Committee.