Islamic banks standardizing operations

Islamic banks in Malaysia, Indonesia and the UK are attempting to standardize operations by adopting the same interface across banks. This article reveals that the murabaha commodity structure is controversial but the details as to why it is so is not clear. Murabaha, an Islamic financing structure, where an intermediary buys a property with free and clear title to it. The loan does not bear interest, and is therefore in line with Islamic law. No late penalties are incurred, but the lender retains property until the loan is paid in full.

Mortgage

 

More news on Islamic finance. this time from London, focusing on ordinary morgages which are high-risk. To circumvent the usual mortgage scheme, the most common form of Islamic home purchase loan works like this: When a couple wants to buy a house, instead of borrowing the money, the Islamic bank buys 80% of the house for them.The couple puts down a deposit for the other 20% and then pays the bank rent, plus regular portions of the capital. During the fixed period, ownership gradually passes from the bank to the buyer. The rent charged by the bank is how it makes its money.