As we all know that Islamic Banking avoid interests.
Then, what is the technique of adding profits/returns to short/long-term deposits or any deposit?
Asked
Active
Viewed 201 times
2
-
Who said there is any? There's no interest, period. If the bank wants to give something in return it will be a gift, not a promised interest. – littleadv Apr 01 '12 at 05:02
1 Answers
5
They do "Hibah" ("gift"): Hibah on Wikipedia
Basically, the bank rewards you, with a "gift", for the profits that it makes from your deposits but without specifying those details in contract.
So, unlike a non-islamic deposit you can't have any garantee about when or how much the reward will be.
In that way it's more like a dividend.
Mesop
- 969
- 5
- 11