The Unique Islamic Banking Enjoys Strong Growth

Institutions offering Islamic banking products report robust growth in business over the last year. Some of the Islamic banking has notched up growth of twenty two percent, largely on the back of its strong consumer business, and says that the increase is greater than for conventional banking in same period.

The Growth of the Islamic Banking

The fundamental difference between Islamic and conventional banking is that the banks offering Islamic products and services have to ensure their operations comply with Islamic principles, and establish advisory committees and consultants to guide and monitor this.

The Islamic bank says growth has been strongest in its personal financing and credit card business. Some of the Islamic bank also says that in the year ended June; its consumer banking division remained the largest contributor to revenue.

In the early years of Islamic banking, the sector appealed most to Muslim customers. Today, institutions sat these products are now just as popular among non – Muslims. The Islamic bank says non – Muslims form the majority of its mortgage business’ customer base, for example. Islamic bank says more than half of the take – up for some products is by non – Muslim.

Whilst the Islamic products may have begun as Islamic – compliant versions of existing conventional offerings, they have quickly grown to assume a distinct identity of their town. Since 2004, most of the Islamic banking has offered products that are unique to Islamic banking.

Financing Products found at Islamic Banking

The variable rate scheme, which sets a ceiling for mortgage rates, non – compounding of interest and charges and diminishing partnership based products, as examples of products and features not found in conventional offerings.

The most popular Islamic banking products are the financing products are the financing products Islamic Hire Purchase – i, Home Financing – i, and Islamic credit card. The Premier Islamic Account – i is the most sought – after investment product.

Most of the customers like Hire Purchase – i because it is Islamic – compliant, have no compounding of interest and charges and has a lower compensation amount for overdue payments compared to conventional products.

The Premier Islamic Account – i comes with more features and benefits too, such as superior personal accident and medical benefits and enhanced returns. Some of the Islamic products are bank’ s Islamic Credit Card – i, Arif Hire Purchase – i and Personal Financing – i.

The Islamic credit card is the first purely Islamic – based card offered with EMV smart chip technology, whish provides enhanced security for cardholders. It comes with free coverage on outstanding balance or up to the maximum card financing limit. There is no compounding element in the finance charges imposed.

Wide Distribution

Islamic products are not only available through dedicated Islamic banking branches. Most of the Famous Conventional banks have also offered its Islamic products via all its delivery channels, including dedicated Islamic branches and those of parent bank, since 1993.

Most of the Islamic banking says it has number of new Islamic products in the pipeline with distinct focus on the development of products, under its International Currency Business Unit and the wealth management category.

They are looking at an equity – based business financing and new deposit package.

Bankers expect that more than twenty percent of total consumer banking assets in Asia will be held in Islamic banks over the next ten years.