City Islamic is the Islamic banking window of City Bank which provides all the banking services according to the rules and parameters of Shariah. All the transactions are conducted under the supervision and audit of Shariah scholars.

Shariah does not disapprove Islamic window or division operating under conventional bank as long as the fund and operations are kept separate. City Islamic ensures all the activities are independent from conventional one by using separate banking software and accounting measures.

If Islamic banking operation is separate, the funds are utilized independently with Islamic modes and incomes are kept separate, then City Islamic banking being part of City bank does not imply that they violate Shariah requirements.

Example:  A person has two story building. One floor has grocery store and another floor has tobacco. They operate independently and keep funds and income separate. Therefore, the income from the grocery store is not haram even though the owner of the building is one person.

City Islamic savings and deposit accounts are based on Mudarabah contract. Under this contract the customer provides fund and City Islamic provides expertise to invest the fund in Shariah-compliant activities. Profit generated from the investment is shared between bank and the customer based on pre-agreed profit–sharing ratio.

City Islamic current account is based on Wadi’ah contract. Under this contract the customer deposits funds to City Islamic for safekeeping. As it is a trust contract, City Islamic guarantees the return of deposited amount whenever the customer demands. The depositors are not entitled to any profit from this account.

City Islamic uses financing mode such as Bai-salam (forward selling), Ijarah (lease), Murabahah (cost+ markup).

Murabahah refers to the contract where bank buys an asset requested by the customer from a supplier and then sell it to the customer by adding profit to the price. The customer can pay immediately or bank can provide option to pay later.

Through Bai-Salam, City Islamic pays in advance to the customer and customer delivers the specific goods in pre-agreed future date.

In Ijarah, City Islamic buys an asset such as house, machine etc. and rents it to the customer for a specific period of time. At the end of the contract Bank can sell the asset to the customer.

AAOIFI (Accounting and Auditing Organization for Islamic Financial Institution ) is a Bahrain-based institution that is responsible for developing and issuing standards for global Islamic banking industry. These standards provide guidelines to Islamic banks to operate based on the Shariah principles. Therefore, members of AAOIFI follow these standards to develop Islamic banking products, operations and processes. This ensures that the transactions of the bank are happening according to the rule set by Islam.

Islamic banking is a banking system where all the financial activities such as deposit collection, financing, investment and profit-loss sharing are done according to the principles of Shariah. It follows the rules and principles of Islamic transactions that are known as “Fiqh al-Muamalat”

The word “Shariah” means way or path.

In Islam, Shariah means the divine guidance as well as laws provided by the Qur’an, Hadith [saying of Prophet Muhammad (Peace be upon him)] and juristic interpretations of Islamic Scholars.

Ruling of Islamic faith, beliefs and practices including Islamic banking are derived from the following sources: Quran, Sunnah, Ijma (consensus of the Ummah) and Qiyas (analogy).

Using interest rate as benchmark to determine profit does not invalidate any transactions according to Shariah. Benchmarking does not make Islamic banking profit as interest, as long as the transaction meets all the requirements of valid transaction as per Shariah. A benchmark is used as to unit of measure for example Kilogram used to measure both chicken and pork. Therefore, using Kilogram as unit of measure does not make chicken Haram.

Any excess or additional over principal for any loan whether it is taken for consumption purpose or business purpose is considered as Riba or interest. Therefore, Shariah does not differentiate Riba or interest based on the purpose.

No, Islamic banking services can be availed by anyone as long as the conditions of Shariah is fulfilled. The principles and teachings of Islam are universal in nature. Therefore, Islamic banking transactions are not confined to Muslims rather, it equally addresses any individual.

In Shariah, the validity of a transaction does not depend on the end result. Rather the process followed to come to the end result is the major concern. A transaction in Islamic banking through Halal process can have the same result as conventional but it does not indicate they both are same.

For example: Two hungry men are eating chicken in the same table. One person bought it from a Halal store where it is slaughtered according to Islamic rulings and the other one bought it from a store which does not follow the rulings. Here the end result is two hungry men eating chicken. But one is eating Halal chicken where the other one is eating Haram chicken.

So both consumptions are not same.

There are some contracts, such as Murabahah (cost + mark-up), Ijarah (lease), in Islam where fixing the profit rate is mandatory and without it the contract will be void and invalid. Fixed rate can be provided for profit in trading or rent on property.

For example: A customer wants to buy machine and needs financing for this. Islamic bank can propose that it will buy the machine for the customer and sell it to customer at 10% profit.

Mr. X wants to buy a house and needs financing for it. Islamic Bank can buy the house for Mr. X and lease it to him. Bank can charge 10% rent while the customer is using the property. Here the 10% rent is the profit.

Therefore, on both cases above, fixing the 10% profit rate does not invalidate the transaction.

Shariah board is an independent board of Scholars who are well equipped with the knowledge of Shariah. The main responsibility of Shariah board is to review, approve and supervise Islamic banking activities and ensure all the product and services are in line with the Shairah principles.

City Islamic has an independent Shariah committee consisting of 7 members who ensure the product and activities of Islamic banking are following the Shariah principles. They are:

• Md. Anwar Hosain Molla
• Prof. Maulana Muhammad Salahuddin
• Md. Zainul Abedin
• Md. Fariduddin Ahmed
• Dr. ANM Rafiqur Rahman
• Dr. Muhammad Yousuf
• Dr. Muhammad Obaidullah
• Hosain Md Shafiqur Rahman.

All of the product and services are reviewed and approved by the Shariah board. City Islamic offers you peace of mind by attaching Fatwas related to the all the products. You can check the product description to see the Fatwas issued by the Shariah board.

Islamic bank cannot provide certain profit rate to the depositors in advance. It is possible to provide an indicative/potential profit rate based on the past profit rates. But there is no certainty that it will be the actual profit rate when profits are disbursed to depositors.

Three major modes of financing used by Islamic Banks are:

1. Partnership

• Mudarabah
• Musharakah

2. Sale

• Murabaha
• Salam
• Ijarah

3. Supplementary

• Wakalah