Islamic Finance from Riyad Bank is governed by two fundamental principles. These are sharing of profit and loss and more importantly the prohibition of collecting interest payments.
What differentiates Islamic Banking and makes it better is that the bank operates by the moral and ethical standards laid down by the Islamic law, therefore is righteous form of banking:
- Guided by Islamic economics
- Based on fixed costs
- Includes widely accepted financial instruments
- No currency risk
- Benefit from all the traditional banking products
- No commodity price risk
- Governed by moral and ethical banking standards
- All business and corporate customers are eligible
Riyad Bank provides the following Shariah compliant Financial, Trade and Treasury products:
The Bank sells a commodity it owns to the customer for a price at a pre-agreed margin, then the customer (buyer), if he wishes, authorizes the Bank to sell the commodity to a third party and credit the proceeds of sale to his account.
This is an Islamic compliant financing tool where the bank acquires a commodity required by the customer before selling it to the customer for a price at a pre-agreed margin.
The Ijarah financing process involves the Bank granting a lease on an asset it owns to a (business) customer in consideration of a prefixed rent with the promise of ownership.
Is a financing method where the Bank shares the capital required with the customer for the purchase of commodities, equipment, machines or properties for a specified period of time under a joint-venture contract, entered by and between both parties. At the end of contract, the joint venture is liquidated and profits/losses are shared by the partners.
Is an Islamic model of financing whereby the Bank (manufacturer) manufactures the product whether that’s a building, mobilization, etc. upon the request of the (business) customer, in his capacity as the “Istisna’a seeker”, and subject to the, terms and conditions, specifications, quantities and prefixed price. The Bank then employs a contractor/supplier to make or supply the required product. When the job is finished, the Bank takes delivery of the finished product from the contractor/supplier, pays the agreed price, and then delivers the product to the customer at the prefixed date.