DIFFERENCES BETWEEN ISLAMIC AND CONVENTIONAL BANKING
TYPES OF ISLAMIC BANKING CONTRACTS
TYPES OF CHARITIES
Customer appoints Bank as an agent to purchase commodity.
Bank purchases commodity at a price equivalent to the deposit amount.
Customer owns the commodity.
Customer sells commodity to Bank at a markup price on deferred payment term.
Bank now owns the commodity and sells it to Commodity Buyer.
Bank pays the Customer the selling price after the deposit hits maturity.
Customer gives cash investment (capital) to Bank.
Bank manages the investment.
Bank receives profits from investment.
Bank distributes the agreed share of the profits to the Customer.
Customer identifies dream car.
Customer applies for Hong Leong Auto Financing-i directly or through dealer.
Customer undertakes to purchase the car upon payment of final installment which comprises RM1 sales price.
Bank purchases the car from Dealer.
Bank leases the car to Customer over an agreed period.
Upon payment of final installment, Bank transfers ownership of the car to Customer.
Takaful participants make a donation through a Takaful operator.
Takaful operator collects the donation into a Tabarru’ fund.
Takaful operator manages Shariah-compliant investments.
Any claims made by Participants are paid out of the Tabarru’ fund.
Surplus made from the investment will be divided among all Takaful participants.
Customer appoints Bank as an agent or representative for investment.
Customer gives cash investment to Bank.
Bank manages the investment as an agent or representative.
The profits generated from the commercial venture are distributed based on agreed profit-sharing ratio.