Philosophy

Islamic banking is a system governed by the principles of Islamic economics. In this sense, Islamic banking is part of an integrated system based on moral principles and divine legislation governing human behavior in the endeavor to reconstruct land. The principle of reconstruction of the land is the main principle that the rest of Islamic economic principles derive from. The adherence to the content of this principle in theory, organization and practice will achieve well-being of humanity at large and ensure sustainable development by consciously steering away from any unhelpful economic activity. At Al Baraka Banking Group, we seek to harmonize the principles of Islamic economics and their application in the Islamic banking system very diligently.

Islamic Shari’a prohibits usury in all its forms, lending and borrowing, and considers such dealings to be a great sin that should be avoided. Therefore, usury in the balance of the Islamic economy is considered to be a negative factor in economic activity, because usury works to separate the real economy from the financial economy, which creates imbalance in growth and causes successive economic crises, as demonstrated by historical experiences of the contemporary economy.

The principle of Musharaka in the fine and rewards (losses and returns) is the ideal alternative towards creating a balance between real economy and financial economy. Successful implementation of this principle will achieve the optimum capacity to absorb and correct economic crises in short periods and at lower costs. Therefore, one of our main goals is to reinforce the principle of fine by rewards in the reality of banking operations, by ensuring that the current system is more appropriate in creating a favorable environment to accept products based on the sharing of returns as well as sharing risk tolerance.

The Holy Qura’n calls upon all of its followers to care and help the poor and the destitute. Based on this, Islamic financial institutions are expected to provide special services to needy people, and this is not limited to mere gifts and charitable donations, but it has also taken an institutional nature in the form of loans without profits or commissions, which is known as Al Qard Al Hassan. In addition, Zakat is one of the main tributaries that establishes solidarity between the members of one society and its different classes. Therefore, Islamic banks are keen to provide the necessary information, whether to shareholders or dealers, to calculate the required amount of Zakat and they may act upon on their behalf, in the event that they are authorized to pay zakat funds to those who are entitled to them.