You need to look that what is the nature of contract between You and that institution which is offering such saving schemes. If they say that your deposited amount is guaranteed i.e. repayment in full is guaranteed then the relationship is creditor and debtor.

In Islamic sharia whenever debt arises between two parties it must be returned at par otherwise any excess will be considered as Interest.

yar i think they gurantee the full repayment of the original amount.

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The road to Success is always Under construction...

We have not found pure Islamic banking system. Still there are various issues to resolve before claiming pure Islamic banking. Fine line has to be drawn between traditional and Islamic banks.

Q. Can you please guide me on the money, we get as a interest from National Saving Scheme of Pakistan. If we want to give rent can we use this sort of money?


The profit/return/income you receive on your deposits with National Savings is Riba (Sood) i.e Interest which is Haram and not allowed for any use accept giving it to needy people or charitable organizations. Its use for rent is also not allowed because this falls under personal use of interest which as I have said is not allowed.



Q. Is the profit from Defense saving certificates Haram? Can this profit be distributed to any needy Muslim?


Profit from Defence Saving is interest based and is therefore Haram. Any Haram income should be got rid of. Therefore Ulema have opined that Haram income should be given to needy Muslims without having "Niyat-e-Sawab". Because "Sawab" is given by Allah on spending good wealth and not the Haram one

Q. The State Bank of Pakistan distributes prize bonds on which money can be retrieved whenever one decides to return them, but after sometime a draw is carried out to determine the winner & the winning prize bond owner takes the money. Is this money halal & if not then kindly explain why?


The amount given as Prize to bond holders is not Halal. The reason for its non-permissibility is that the amount given to bond holder is interest given on loan. In fact under public borrowing arrangements whatever government takes from public it usually gives interest in two ways: a) Interest with fixed percentage for every bond holder. This is the case in National Savings Schemes. b) The second way to give interest is to give a huge amount to some bond holder not to all of them. This is the case in prize bonds therefore Ulema have declared the prize given to bond holder as "Riba".

Source:http://www.bankislami.com.pk/ask_the_shariah/#?75

We have not found pure Islamic banking system. Still there are various issues to resolve before claiming pure Islamic banking. Fine line has to be drawn between traditional and Islamic banks.

Yes Indeed there are several issues which are being resolved but they all are technical issues. a lay man cannot understand them easily. but still at least we have a way to avoid wrong paths.

Islamic concept of riba, usufruct and islamic banking sytem so far seem to elude my rational understandings where mere names are not exchanged in shuffeling rather a new and distinct substance not borrowed from previous devices/instruments should be embodied. if you wrap up old concept in new contours. this would be no answer to the economic/banking system of infidels.

Below is the link of an article which i just have read in an effort to weigh the antagonist arguments against the originality of islamic banking system. As above-mentioned arguments so far dosen,t answer the real crux. Any Islamic scholar/economist would do well by answering the objections of this article on islamic banking system that its not original merely an old wine in new bottle.


http://kabir.freedombulwark.net/

If Riba is " To earn money from money" so what about business of dollers exchangers?? is this the same case of banking because they are earning money from money.

The Quran’s Injunctions about Interest
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If people had not indulged in wishful interpretation of these verses of the Quran,
It should have been unnecessary for us to consider further what is that excess, usury or interest, which the Quran so forcefully prohibits. Now what the verses had been revealed for this excess or usury or what we call interest:

That is because they say;
*trade is like usury*.
But God hath permitted trade
And forbidden usur

What does this word ‘usury’ mean? The original word which is translated here as usury is riba. Riba literally means an excess or addition wit reference to debts, itmeans any excess above the principal lent. Therefore, it includes both interest and usury. In fact, argument is superfluous in the presence of these clear verses, verse 278 say; discard usury ( little excess ), verse 279 says; You can not take back the capital sum. So that we are prohibited from taking is the excess over the capital sum. Since interest is also an excess over the capital lent, according to the Quran, it is prohibited.
Mark the last four lines. The Quran foresees the bearing of interest on trade. Yet in its own glorious way it insists on permitting trade and prohibiting int
If we start from the negative end, the Quran’s meanings become obvious. The clue is provided by verse 275 of chapter ii.

Why does God “permit trade and forbid usury “?
Capital invested in trading brings an excess called profit, invested in banking it brings interest. God prohibits one excess and permits another- What is the difference between the two? The difference is that profits are the result of intiative, enterprise and efficiency- They result after a definite value-creating process. Not so with interest. It may even retard a value-creating or productive process and too often does as we shall soon see- A still more fundamental difference is that interest is fixed, profit fluctuates.
In the case of interest you know your return and can be sure of it. In the case of profit you have to work to ensure it. If a banking structure could be evolved in which the return for the use of money would fluctuate according to the actual profits made from it, Islam would have no objection to it. That would be a developed form of “SHIRAKAT” which is already recognized in Islamic jurisprudence. What the Quran prohibits is a fixed return for the use of money irrespective of the profit gained or the loss incurred by the borrower. So riba or interest means; Fixed return for the use of money. It is always prohibited whether it results from the loans of gold and silver or economic credit.
According to economic point of view, Interest plays a peculiar part in bringing about the crises the interest sows the seed for the crisis. It takes place in the heydays of a boom. Large amounts of money on interest are employed in productive processes. Due to burden of interest the marginal cost of production no doubt rises, but as yet there is enough demand for goods and procedures feel highly optimistic about the future.As the demand for goods is great, the profits rise and are reinvested in industry or banks. The wages, however, always lag behind. Interest has a bearing on this lagging behind of wages because the enterprises carrying the burden of interest, are very reluctant to increase wages. Besides a large number of labourers remain unemployed even during the nascent boom. In the high marginal cost of production and in the lagging behind of wages are sown the seeds of the invisible yet inevitable crisis.
The abolition of interest can abolish the crises.
It is the “enhancement” of interest that there are goods without market and men who need them but can not purchase them. “Enhancement” is the word which Carlyle used for this strange phenomenon. But God had permitted it in the Holy Quran;
“Those who devour usury
will not stand except”.

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"There is little difference in people; but, that little difference makes a big difference. That little difference is attitude. The big difference is whether it is positive or nagative."
-- W. Clement Stone

I am working in a pioneering of Islamic Bank. Before it I was in a suspicious condition is it Islamic or not. Now atleast difference is visible in a Islamic Banking and a conventional Banking. In a Islamic Banking every transaction and product is running under Shriah Board (which consists of Ulema). In Pakistan Islamic banking sector is growing day by day and atleast conventional banks is also open a window of Islamic products. In future all conventional Banking sector of Pakistan will convert into Islamic Banking sector. Islamic Banking system is the surviving of saving from "RIBA" (Intrest).

Please go through following website www.meezanbank.com in this website you found every updates of Islamic banking knowledge and glossaries of Islamic terms for Islamic Banking and Finance.

Must go through this website of State Bank to know Islamic Banking history and updates in a better way. http://sbp.org.pk/departments/StrategicPlan.htm

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ASIF AMIN

@The proponents of islamic banking and forum members.thank you for your useful posts.

after reading thoroughly the tenets of islamic banking,i want the advocates to answer few fundamental questions.

If islamic banking is really islamic,why don't all muslim countries adopt this model of banking?

how shall islamic banking compete with interest based banking of the west which has the potential to offer more services?

The whole islamic banking system is not interest free.there are only certain services which are based on this model.but the fact is that bank does its bussiness through the capital of its customers.It takes capital from the depositor,debits some amount from his account for using services.and it gives on credit to the borrower and the difference is always the interest which the bank earns on the original amount.if we beleive that a customer will always have to share loss or profit and the bank will never have a fixed income-which always comes from fixed interest-then how shall the bank be able to sustain itself?

I thoroughly believe that for a novice like me,understanding the technicalities is quite difficult.

What if this whole model of islamic banking system is a farce?Surely,the western financial system is far more powerful than the embroynic islamic financial system.The need of the hour i guess is keeping intact both of them.please guide me with more useful posts.i earnestly want to remove my ignorance.regards,

Sikander

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"It is said an eastern monarch once charged his wise men to invent a sentence, to be ever in view, and which should be true and appropriate in all times and situations. They presented him with the words, 'And this, too, shall pass away.' How much it expresses! How chastening in the hour of pride! How consoling in the depths of affliction!
-Abraham Lincoln