Faysal Bank gets Islamic Banking License
Faysal Bank gets Islamic Banking License. The State Bank of Pakistan (SBP) has issued another Islamic banking license to Faysal Bank Limited (FBL). Now it has become the second-largest complete Islamic bank in Pakistan.
The shifting of Faysal Bank from commercial banking to Islamic banking is a distinctive example globally as per its size and operational structure. It has at this time about 700 branch networks in Pakistan.
Jameel Ahmed, Governor State Bank of Pakistan said: “Conversion of Faysal Bank is first of its kind in the banking history of Pakistan. This is a groundbreaking accomplishment, not only for the bank, but also for Pakistan’s Islamic banking industry,” he added.
Faysal Bank has the highest local Shariah rating of SCFR1 by the International Islamic Rating Agency (IIRA). Faysal Bank has a network of about 700 Islamic branches. Moreover, Faysal Bank has a branch network in 253 cities and towns in all over Pakistan.
Why Islamic banks are better than conventional banks?
Islamic Banks have strong Shariah-compliant infrastructure in terms of the Shariah Board, which allows transactions and products in the light of the Shariah rulings. On the other side, In the case of Conventional Banking, all the financing and deposit side products are loan based.
What is the Basis of Islamic Banking?
Islamic banking is:
- Islamic Banking transactions are based on the Islamic faith,
- The principles of Islamic banking are derived from the Holy Quran,
- In Islamic banking, all transactions must comply with Shariah,
- Shariah is the legal code of Islam which is based on the teachings of the Quran.
How do Islamic Banks Make Money?
Let us discuss how do Islamic banks make money?
- Instead of charging interest, Islamic banks use equity participation systems,
- This system is equal to profit & Loss sharing.
- Equity participation means an Islamic bank gets profit sharing from amount invested in a business instead of charging interest
- Moreover, If such a business default and does not earn a profit, then the investor Islamic bank also does not get any benefit.