Can Muslims fixed deposits or save with non-islamic banks or fin-tech even the absence of interest (RIBA)? Let's break this down clearly from an islamic finance perspective: why a Muslim should not invest in a fixed deposit or save with a conventional ( non-islamic) bank or fin-tech. Even if a Muslim does not directly take riba, the issue with investing , saving or working with conventional Banks and fintech is that one is assisting or facilitating riba-based activities. Islam prohibits not only committing sin but also helping in sin, injustice, cooperation in sinning and transgression. Suratu Maidah Vs 2 Allah Says; “And cooperate in righteousness and piety, but do not cooperate in sin and transgression. And fear Allah; indeed, Allah is severe in penalty.” 👉🏽This verse lays down a general principle: a Muslim must not participate in or support sinful activities as such riba falls into this category thus, savings or fixed depositing with conventional fin-tech like opay, piggy-vest and others in assisting them In pooling money for Riba-base borrowing and other non ethical transactions. Evidence from the Hadith also prohibited such; “The Messenger of Allah cursed the one who consumes riba, the one who pays it, the one who records it, and the two who witness it.” He said: “They are all the same.” (Sahih Muslim, Hadith 1598) 👉 In this hadith,even the scribe and witnesses (who don’t receive or pay riba directly) are included in the curse, because they assist in enabling riba, not to talk of someone who gives their money or effort strengthens an institution whose core business is riba. Although,they do not personally take interest, their involvement enables the bank to operate, which falls under ta’āwun ‘ala al-ithm (cooperation in sin). Scholars use Qur’an 5:2 and the hadith above as evidence that this type of indirect involvement is not permissible. What are other alternatives that are shariah compliant that Islamic finance provide ? Stay tune with us. Found this article valuable? Spread the knowledge and share it with your network to help others benefit from 'Finhalal Insight' ©️ Akorede Sahidat For: Finhalal Insight (+23490113396402) #finhalalinsight #islamicfinance #shariahcompliantfinance

Islamic Finance Insights - 274 Beyond Conventional Labels Funds come in many shapes. Be it equity, fixed income, money market; each tailored to investor needs. Islamic fund structures replicate this diversity but under Shariah guidance, ensuring no exposure to riba, gharar, or haram industries. This means investors don’t compromise choice; they simply elevate it with ethics. A portfolio is only as clean as the values it carries.

Issues of Islamic Banking; Episod-01: Islamic Bank (as per OIC): "A financial institution whose statutes, rules and procedures expressly state its commitment to the principles of islamic Shariah and to the banning of th6 receipt and payment of interest on any of its operation” Riba is an Arabic term that literally means “increase,” “excess,” or “growth.” In Islamic finance and jurisprudence, Riba refers to any guaranteed interest or profit on a loan or deposit, and it is strictly prohibited in Islam. “Allah has permitted trade and forbidden Riba.” - Surah Al-Baqarah, 2:275 Types of Riba: Riba al-Nasiah (Interest on Loans) This is the most common type and refers to the extra amount charged on borrowed money (like modern bank interest). Example: Borrowing $1,000 with a requirement to repay $1,200 later. Riba al-Fadl (Excess in Exchange) Occurs in unequal exchange of similar commodities (like gold for gold, wheat for wheat). Example: Exchanging 1 kg of gold for 1.2 kg of gold—without delay or just reason.

The following is an extract from a speech by Dr. Ishrat Hussain, the former Governor of the State Bank of Pakistan. This passage offers considerable depth, especially for researchers exploring the 'financial inclusion' aspect of the Islamic model of banking and finance. “Conventional banking places the entire burden on the borrower. Islamic banking, by contrast, introduces sharing, equity and fairness. It is not merely a financial model, it is a moral framework. Islamic banking has the potential to derive financial inclusion, alleviate poverty, support small farmers and invest in human capital… Unlike capitalism which often leads the marginalised behind or socialism which collapses under its own weight, Islamic finance offers a balanced path.” #IslamicBankingandFinance #ConventionalBanking #FinancialInclusion

Islamic Finance is no longer a niche concept — it’s becoming a mainstream choice for individuals, businesses, and even governments. Here’s why it’s growing rapidly: ✅ Ethical & Shariah-compliant – Interest-free, transparent, and based on risk-sharing. ✅ Resilient & Stable – Focuses on real assets and avoids excessive speculation. ✅ Inclusive Growth – Encourages social responsibility, fairness, and community development. ✅ Global Acceptance – From sukuk (Islamic bonds) to Islamic banking, it’s expanding across both Muslim and non-Muslim countries. As trust in ethical and sustainable financial models rises, Islamic Finance is aligning with modern needs while staying true to timeless values. 🌍📈 Do you think Islamic Finance can play a key role in building a more sustainable global economy? #IslamicFinance #EthicalBanking #SustainableFinance #FutureOfFinance #IDLCislamic

Deconstructing the Illusion: How "Risk-Free" Interest is Society's Biggest Risk The conventional financial system is built on the seductive promise of "risk-free" returns. A savings account guarantees a small interest payment. A bond promises a coupon. This illusion of safety is the very engine of Riba. The Islamic Perspective on Risk: In Islamic finance, risk-sharing is a core principle. Profit is legitimised by taking on risk. If you finance a business (through Mudaraba or Musharaka), you share in its success and its potential failure. This creates a direct, ethical link between finance and the real economy. The Problem with "Risk-Free" Interest: It's a Mirage: The risk doesn't vanish; it's transferred and hidden. The bank takes your deposit (lending to you at a tiny rate) and lends it out at a higher rate, transferring the risk of borrower default onto its entire balance sheet, creating systemic fragility. It Breeds Complacency: It encourages hoarding capital for a safe return rather than deploying it productively into the economy. It's Inherently Unjust: It guarantees a return for the capital owner while the entrepreneur bears all the risk of the venture. Islam demands justice: if capital gets a guaranteed return, it must also be liable for loss. The 2008 Global Financial Crisis was the ultimate testament to the failure of this model—where "risk-free" instruments nearly collapsed the world economy. The Islamic model isn't just spiritually compliant; it's economically more resilient. #RiskSharing #IslamicEconomics #FinancialCrisis #EthicalFinance #SystemicRisk #HalalWealth

🔍 Are We Really Removing Riba Or Just Rebranding It? Every other Islamic bank in Pakistan claims to be “on a mission to make society free of riba.” Yet, look closely at how our Islamic banking system actually works and you’ll see a troubling contradiction. Islamic banks promote current accounts that pay no returns to depositors but then take those very deposits and invest heavily in government sukuk, earning handsome, risk-free returns. According to SBP data, more than 70% of Islamic bank assets are parked in government financing, and the sector now represents over 21% of Pakistan’s banking industry. So the question arises: 👉 If banks are truly fighting riba, why is the majority of their balance sheet funding a government that still borrows through both Islamic and conventional channels without even separating the books? The result is a moral and economic paradox: Depositors get nothing on their current accounts. Banks earn steady profits from government sukuk. And the state, which deals in interest-based debt elsewhere, becomes the main beneficiary of “Islamic” liquidity. Call it what you want — Murabaha, Sukuk, or Ijara — but if the economic outcome mirrors interest-based lending, can we really claim riba is gone? Form without substance is not transformation it’s cosmetics. If Islamic finance is sincere in its mission, then the path forward is clear: ✅ Stop funding non-Islamic fiscal structures. ✅ Share profits fairly with depositors. ✅ Publish transparent disclosures on where depositor money actually goes. ✅ Demand that the government separates Islamic and conventional ledgers. Until that happens, slogans about a “riba-free society” will remain just that slogans. It’s time we have an honest conversation about whether Pakistan’s Islamic banking is eliminating riba — or merely repackaging it. #IslamicFinance #Pakistan #Banking #EthicsInFinance #RibaFree #FinancialReform #ShariahCompliance #IslamicBanking #Transparency #Sukuk

Islamic finance is ‘about trying to create a better world and a fairer flow of money and value through society,’ says Islamic Finance Guru co-founder Ibrahim Khan. Lucas Cumiskey's handy guide unpacks the key Islamic finance concepts and explains how it works. https://lnkd.in/e5vtQU4H

Islamic finance is more than a faith based alternative. It is a system built on transparency, fairness and accountability. At its heart is the simple principle that money should not be made from money without value being created. This is why interest is prohibited and why risk and reward must be shared. In practice this means that every transaction is clear, assets are real and contracts are honest. There is no hidden exploitation and no benefit for one party at the expense of another. This level of openness creates trust and builds long term stability. We often hear about the importance of ethical business, responsible investment and sustainable growth. Islamic finance already offers this framework. It insists that wealth is not hoarded but circulated, that people are not trapped in unfair debt and that prosperity is tied to justice. The strength of Islamic finance lies in its ability to combine faith with function. It works because it aligns with both human values and economic reality. Transparency is not an option in this system, it is the foundation. #IslamicFinance #EthicalLeadership #Transparency #FaithAndWork #Integrity #SustainableGrowth

𝗔𝗿𝗲 𝗜𝗻𝘀𝘁𝗮𝗹𝗹𝗺𝗲𝗻𝘁 𝗦𝗮𝗹𝗲𝘀 𝗼𝗳 𝗛𝗼𝘂𝘀𝗲𝘀 𝗣𝗲𝗿𝗺𝗶𝘁𝘁𝗲𝗱 𝗶𝗻 𝗜𝘀𝗹𝗮𝗺? This is a common question, especially for Muslims living in Western countries. According to 𝗠𝘂𝗳𝘁𝗶 𝗠𝘂𝗵𝗮𝗺𝗺𝗮𝗱 𝗧𝗮𝗾𝗶 𝗨𝘀𝗺𝗮𝗻𝗶, it is important to distinguish between two very different types of transactions: ❌ 𝗖𝗼𝗻𝘃𝗲𝗻𝘁𝗶𝗼𝗻𝗮𝗹 𝗛𝗼𝗺𝗲 𝗟𝗼𝗮𝗻𝘀 (𝗡𝗼𝘁 𝗣𝗲𝗿𝗺𝗶𝘀𝘀𝗶𝗯𝗹𝗲) ● In most Western countries, banks do not own or sell the house. ● They simply advance money to the buyer, secured by a mortgage. ● The buyer repays the loan with “principal + interest.” ● This is a 𝗿𝗶𝗯𝗮-𝗯𝗮𝘀𝗲𝗱 𝗹𝗼𝗮𝗻, strictly prohibited in Shariah. ✅ 𝗜𝗻𝘀𝘁𝗮𝗹𝗹𝗺𝗲𝗻𝘁 𝗦𝗮𝗹𝗲𝘀 (𝗣𝗲𝗿𝗺𝗶𝘀𝘀𝗶𝗯𝗹𝗲 𝘄𝗶𝘁𝗵 𝗖𝗼𝗻𝗱𝗶𝘁𝗶𝗼𝗻𝘀) ● A true installment sale occurs when the seller (or the bank) actually 𝗼𝘄𝗻𝘀 𝗮𝗻𝗱 𝗽𝗼𝘀𝘀𝗲𝘀𝘀𝗲𝘀 the property before selling it. ● The seller may charge a higher total price than the cash price in exchange for allowing deferred installment payments. ● If all Shariah conditions of sale are met, this form of financing can be valid. 📌 𝗞𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆: Not every “installment plan” is Shariah-compliant. The majority of Western house financing schemes are purely interest-based and cannot be justified under Islamic law. At Ethica Institute of Islamic Finance, we believe clarity on these issues is essential—helping professionals and families navigate life decisions without falling into riba. 📖 Source: Contemporary Fatwa by Mufti Muhammad Taqi Usmani (pp. 132-133)