ISLAMIC BANKING
can assist its prospective clients in finding alternate avenues for savings, investments and arranging finances by excluding RIBA from such transactions. Due to adequate capital base available with Islamic banks , it offers opportunities for financial innovation and flexibility to structure different types of arrangements which would allow for a shift from debt based financial system to equity and partnership based.
The main modes of financing are
- Murabahah (For financing raw material and finished goods)
- Musharaka (For partnership business )
- Diminishing Musharaka (For property financing)
- Ijara (For financing machinery and vehicles).