Shari’ah Banking – Frequently asked questions
Can anyone (including non-Muslims) use Shari’ah-compliant products?
Yes, these products are for ALL clients and not only Muslims. Non-Muslim clients may take up Shari’ah-compliant products due to the banks’ ethical nature; meaning, Standard Bank will not use clients funds for any 'sin industry' transactions such as tobacco, alcohol, gambling, etc.
What does SAC stand for?
Shari’ah Advisory Committee (in other circles it is also known as the Shari’ah Board).
How can I be sure these products are Shari'ah-compliant?
At Standard Bank, we use internationally reputable Scholars to audit our Shari'ah banking activities. These Scholars provide us with a Certificate of Shari'ah Compliance after testing the product end-to-end. Only then do we market these products as Shari'ah-compliant. The Shari'ah-Compliance Certificates can be made available upon request.
Why is capital not guaranteed on Shari’ah products?
- This is a Shari’ah requirement that there should be no uncertainty in a transaction. This is also a global Shari’ah standard. Any Shari’ah product that you open up globally will have this clause in it. All Shari’ah products at our competitor banks also have this clause in it.
- Technically, capital is not guaranteed on a normal fixed deposit either. By us not mentioning on the Terms and Conditions whether it is guaranteed or not, we cannot assume that it is
- Should there be a massive run on the bank or if the bank goes ‘bust’, there is a possibility that clients will lose their capital in a conventional product as well
- Thus, the risk the client is taking in a Shari’ah product is exactly the same as a conventional product.
- The only time a clients capital will be at risk is if Standard Bank goes under. The chances of this happening is extremely slim
Does Standard Bank remunerate the Scholars on the SAC for their advisory services? If so, is this not a conflict of interest?
Yes, Scholars are remunerated for their advisory services. This is not a conflict of interest as the Scholars that certify Standard Bank’s products as Shari’ah-compliant are not employees of Standard Bank and will continue to remain independent of Standard Bank’s employment. Just as we employ the services of external auditors to audit aspects of our business to ensure that we conform to regulations, we employ the services of external Shari’ah auditors to ensure we adhere to Shari’ah compliance. In both instances, a service is being provided and service providers ought to be remunerated for their services.