Was listening to Pat Kenny this morning and he had some guy on from the financial regulator saying they were looking to bring in Sharia financial system in Ireland for the Muslim population so was wondering what people will make of it "Islamic banking" is a euphemism for a practice better known as "Shariah-Compliant Finance (SFC).
So here is what i have come across ..........
Islamic banking has the same purpose as conventional banking except that it operates in accordance with the rules of Shariah, known as Fiqh al-Muamalat (Islamic rules on transactions). The basic principle of Islamic banking is the sharing of profit and loss and the prohibition of riba (usury). Amongst the common Islamic concepts used in Islamic banking are profit sharing (Mudharabah), safekeeping (Wadiah), joint venture (Musharakah), cost plus (Murabahah), and leasing (Ijarah).
In an Islamic mortgage transaction, instead of loaning the buyer money to purchase the item, a bank might buy the item itself from the seller, and re-sell it to the buyer at a profit, while allowing the buyer to pay the bank in installments. However, the fact that it is profit cannot be made explicit and therefore there are no additional penalties for late payment. In order to protect itself against default, the bank asks for strict collateral. The goods or land is registered to the name of the buyer from the start of the transaction. This arrangement is called Murabaha. Another approach is EIjara wa EIqtina, which is similar to real estate leasing. Islamic banks handle loans for vehicles in a similar way (selling the vehicle at a higher-than-market price to the debtor and then retaining ownership of the vehicle until the loan is paid).
read more Islamic banking - Wikipedia, the free encyclopedia
From above id imagine no bank in Ireland would give any Muslim a mortgage based on those principles.
Some more here on is Sharia finance and its downsides.
[ame=http://www.youtube.com/watch?v=b_emH9gy7KI]YouTube - The DANGERS of sharia finance in USA[/ame]
Anyone else any more thoughts or insight in to this form of banking ?