Frequently Asked Questions
1. How long has the Bank been in operation?
Al Baraka Bank was launched in June 1989.
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2. Is the Bank for Muslim clients only?
No. Al Baraka Bank was pioneered in response to the need for a system of banking which was in line with Islamic economic principles and in compliance with Shariah (Islamic Law). However, this banking system does not exclude any individual, or business from utilizing any of the products and services of Al Baraka Bank.
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3. Does the Bank have a Shariah Board?
Al Baraka Bank has an external Shariah Committee comprising local and internationally renowned Islamic scholars. The Chairman of the Shari’ah Board is Shaikh Abdul Sattar Abu-Ghudda, is also a member of AAOIFI. Al Baraka Bank has its own in house Shari’ah Supervisory Department.
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4. What is the difference between interest and profit?
| Interest Transaction | Muraabaha Transaction |
| Lending conventional bank charges interest on the loan | The bank purchases the commodity and takes actual or constructive possession thereof. In so doing, the bank assumes the risk of the commodity |
| No second sale | Bank sells the commodity to the client on a cost plus agreed profit basis through separate offer and acceptance. After this sale, ownership and risk pass to the client |
Conventional banking:
- is based on interest
- deals in money or papers
Islamic banking:
- is based on profit or rent
- deals in assets
- is based on profit sharing on deposits and on profit on assets
- actively participates in trade
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