Working with a bank is always a good way to keep your finances in order. Banks offer safety thanks to the processes one has to go through to save, borrow, transfer or withdraw money. They provide transparency and so much more.
In recent times, there has been a rise in banks that specialize in creating and providing niche products and services. This is in a bid to appeal to their diverse range of potential and existing clients so as to meet their unique banking needs. Today, we talk about one of those unique offerings, Islamic Banking, which we offer at Gulf African Bank in Kenya and why it works for everyone regardless of their faith.
What is Islamic Banking?
Islamic Banking is a system of banking or financing that aligns with the principles of Islamic Shariah. It is also referred to as Shariah Banking, or Shariah Compliant Finance. In this system of banking, banks avoid activities that are prohibited by the Islamic religion which include:
- Charging of interest, also known as Riba
- Avoidance of uncertainty i.e. where the end result is unknown
- Financing of illegal or unfair businesses or trade otherwise known as haram trade e.g. pornography, production and sell of alcohol
Most banking systems operate under the basis of pricing money and later earning interest on it depending on how much money was transacted to begin with. However, Islamic Banking is based on a trade system that involves selling of both goods and services, where capital is invested through a process of taking a risk to earn profits that are halal. It’s all about finding a balance between prosperity and well-being.
That said, it’s easy to believe that Islamic Banking is only for Muslims, if the name and principles are anything to go by. Fortunately, this is not the case. Partnering with a Shariah compliant Bank like ours comes with several benefits that anyone seeking a great bank to transact with will enjoy.
What are some of the advantages of Islamic Banking?
When you choose a Shariah compliant Bank like Gulf African Bank in Kenya, regardless of your faith, you will enjoy:
Justice and fairness
The foundation of our banking model is the principle of risk sharing for the partnership based contracts. We share the risk with every one of our clients for any investment made. Ours is a system of financial intermediation, one that greatly leads to a fair and just distribution of income and overall wealth regardless of whether the client is Muslim or not.
Transparency
One of the factors that contribute to one choosing any bank is a reputation of transparency, a virtue we pride ourselves on upholding. Islamic banking is all about having every aspect of the different transactions in the open. This means we will always guide you throughout the entire process, ensuring that you understand all the aspects involved. We also ensure we notify you of all the costs related to the products and services we offer to ensure that you plan accordingly.
Elimination of speculation
Another advantage of Shariah Banking is that with us, there is no room for speculation. We fully understand just how big a source of instability a speculative transaction can be. That it could mean misappropriation of your funds. Our bank is prohibited from undertaking such activities which can put our customer’s funds at risk. We instead focus on deploying capital to investments that guarantee returns and in economic activities that uphold socio-economic justice.
Ethical and moral direction
Shariah compliant Banks like us operate under the strongest moral and ethical means when it comes to conducting business. We stick to moral dimensions when choosing the activities and various businesses to finance as our goal is to promote investments that are socially acceptable or contribute to the social well being of humanity.
Financial stability
Last but not least, the Islamic banking system is very stable. When banking with us, you can count on financial stability. After all, everyone likes to feel financially safe. As such, we are ever careful in our decision-making process – We are regulated by the Central Bank of Kenya and internally, we have two boards to ensure all our transactions and investments are above board – the bank’s board of directors which ensures that prudential guidelines are adhered to, and the Shariah board which reviews, monitors and advises on all Shariah aspects of the bank. We are thorough in conducting a background research on every organization and individual that we associate with and we keep the risky ones at bay. We conduct audits with precision and do the most comprehensive analysis to promote financial stability and eliminate risk.
These five advantages of Islamic Banking appeal to people from all walks of life. That said, if you’re looking for a Shariah compliant Banking partner, you’re on the right track and we’re here for you. Contact us today or visit any of our branches countrywide and we will be glad to serve you irrespective of your faith. Make the decision today and let us know!
SMS ‘JOIN’ to 21981 or click https://gulfafricanbank.com/ to request for account opening or financing.
