I’m from Singapore and we have a significant Muslim population. However, it was only recently that I learnt Islamic banks existed. I was wondering if anyone could explain how they differ from regular banks or is the ‘Islamic’ part sort of a marketing ploy directed at the Islamic community? *Context: the first Islamic bank I encountered was HongLeong Islamic Bank, which has a ‘regular’ (?) counterpart.
In: Economics
The very short version is that in Islam, there are religious rules that apply to banking activities. Two of the most visible rules include limitations/prohibitions on charging interest and prohibitions against investing in things not acceptable under Islamic religious principles.
A financial institution that advertises itself as an Islamic bank would comply with these requirements, which may be a selling point for Muslim clients who want to manage their money in a way that aligns with their faith.
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