The underlying concept of Islamic Banking is the absolute prohibition of payment and/or receipt of income. Although in Islam, business activities (and profit making by extension) are encouraged, Muslims are not to engage in any activities involving any additional payment, conditional, over and above the amount lent. This prohibition is all pervasive, applicable to everyone, including, individuals, institutions and government agencies.

As a result, financial institutions seeking to offer Islamic Banking facilities must adhere to a profit-sharing system in which the rate of return of financial resources is not known, neither is it fixed prior to the undertaking of the transaction.

In essence, therefore, the Islamic Banking system is equity- based, in which depositors are not guaranteed the nominal value of their investments, nor a predetermined rate of return on these deposits. Instead, they are entitled to share proportionately in any profits/losses (depending on the performance of the investment activities).

Islamic Banking as an institution, has been in existence for the last 25 years. Today, there exists more than 150 Islamic Financial institutions managing over US$100 billion and the market is growing at a rate of 12 - 15% per annum. While a majority of these are in Islamic countries, many do operate wholly or partially in Western Europe as well as North America and Europe.

For further reading, be sure to check www.muslim-investor.com

Islamic law mandates that Muslims should not in any way enter into any interest-bearing transactions.

Specifically, the IBS is a product which has been designed to allow members of the Muslim community to engage in economic activity and financial transactions that satisfy the teachings of the Islamic Law. Under these teachings, certain financial transactions which involve, "Riba" (interest income); "Maisir" (gambling) or 'Gharar" (deception) are prohibited.

No. The IBS is open to everyone desirous of accessing interest-free financial products and services.

Banks engage in several forms of profit-earning activities, such as asset acquisitions and financing projects. Basically, these modes of activities can be broadly categorized into three areas: investment, trade and lending.

Investment financing is done through 3 main mediums:

• Musharakah (Venture/Equity Financing)
• Mudarabha (Trust Financing)
• Financing based on estimated rate of return

Trade Financing mediums include:

• Muruabaha ( Cost Plus Financing)
• Sell-and-buy back
• Leasing
• Hire-Purchase
• Letters of Credit

The main form of lending is the provision of a loan with a service charge levied to cover any expenses incurred.

There are no service charges involved when banking with the IBS.

The IBS caters to the financial needs of both individuals and corporate entities. Products and services are tailored to facilitate both household purchases as well as corporate funding for a diverse range of needs.

Sharia'a is a set of regulations that have been derived from a number of sources, including the Holy Q'uran; the traditions, Sunnah or Hadiths - examples and sayings of the Holy Prophet ( peace be upon him) and Ijtehad - scholarly opinions based on the Holy Q'uran and Sunnah/Hadiths.

In order to conform to the principles of Sharia'a, the Bank is guided by a Sharia'a Supervisory Board (SSB) made up of a group of eminent members of the local muslim community whose primary role is to give religious, moral and legal authority for all aspects of the Islamic Banking Service.

The SSB is entrusted with the duty of ensuring that investments comply with Islamic Sharia'a. The Board comprises no less than three Islamic Scholars, of whom at least one is a graduate in Islamic Law. The format of the SSB's reports and reviews are guided by the Governance Standards set by the AAOIFI .

Members of the Sharia'a Board:

Maulana Dr. Waffie Mohammed
Muslim World League Caribbean and Central America

Shaykh Munaf Mohammed
Darul IFTAA of Trinidad and Tobago

Dr. Musa El-Sharief Mohammed
Lecturer, Islamic Studies

Dr. Mansoor Ibrahim
Anjuman Sunnatul Jamaat Association

Sharia'a compliance is guaranteed by the following means:

• Appointment of the SSB
• Full Compliance with AAOIFI Standards
• Complete segregation of funds