About Syariah Banking (HSBC)

he emergence of Islamic banking (or also known as Syariah banking) in recent decades is one of the most important trends in the financial world. There has always been a demand among Muslims for financial products and services that conform to the Syariah (Islamic law).

HSBC Amanah applies a variety of Islamic financial instruments to develop its products. Often the same instrument is used in a variety of products, each product meeting the needs of a different type of customer. This section presents the three most common Islamic financial instruments and illustrates their uses in representative products offered by HSBC Amanah. Each instrument is explained with a definition, an overview of the transaction process and its illustration in a representative HSBC Amanah product.

Mudarabah

A Mudarabah transaction is an investment partnership. In a Mudarabah arrangement, the contract is between an investor (or financier) and an entrepreneur or investment manager known as the mudarib.

Murabahah

A Murabahah transaction is a sale at a stated profit. In a Murabahah transaction, the bank purchases something from a third party and sells it to the client at a stated profit on a deferred payment basis.

Ijarah

An Ijarah is an Islamic lease. The bank purchases an asset and leases it to a client for fixed monthly payments.