islamic banking Abdulaziz Ali

Islamic banking principles prohibit any payment above the amount that was given in the loan. Only one type of loans in Islamic banking that is cash to cash which is called Qard al Hassan, it is a loan without interest or profit. Profit and loss are shared in Islamic banking which means that if a customer were granted a loan to start a business, if he loss or gain in the business it will be shared between the bank and the customer. Unlike the commercial banks that puts all the pressure on the client so if he loss in the business all debt will be on the customer. In commercial banks there is only one product which is money for money. On the other hand, Islamic banking has several products Twareq which is buying metals for the customer and selling it for the customer with profit so it can be converted into cash. Morabaha and Motharaba which mean the money is supplied by the bank and work is done by the customer and profit loss ratio is divided between them as they agreed. Islamic is prohibited by Sharia Law to participate or invest in forbidden trade. For example, Alcoholic drinks and gambling are practices that Islamic banking do not participate in.

At the end of 2010, the total asset of 8 Islamic banks which operates in the UAE was about AED 269 billion. The total deposit that was controlled by the Islamic banks in the UAE was about AED 198 billion. In a study by emirates business 24/7 said "Islamic banks in the UAE are recording steady growth because of rising demand for shariah-compliant banking business...growth is expected to continue in the coming years due to an increase in income and population,".

The demand on the Islamic banking servives included customer who are non-Muslims.