Interest-free Banking

Interest-free banking, often associated with Islamic finance, operates without charging or paying interest on transactions. Instead of interest-based loans, banks offer profit-sharing or leasing arrangements. Customers might receive financing in exchange for a share of profits or through other contractual agreements, like Murabaha (cost-plus financing) or Ijara (leasing). This system aims to promote ethical investments, transparency, and financial inclusion while adhering to religious principles. It emphasizes risk-sharing and equity, ensuring that both the bank and the customer benefit from the financial arrangement. Interest-free banking is gaining popularity globally, appealing to both religious and non-religious customers seeking ethical finance options.