EST. 1444H · KUALA LUMPUR✓ Shariah-Certified
INTEREST
PROFIT-SHARING
Every product. Every contract. Shariah-audited.
→Murabaha home finance — ownership transfers at purchase, not at payoff
→Musharakah business capital — we share your risk, not just your repayments
→Riba-free remittances — every dirham moves through a documented asset trade
Scroll
01/
How is Murabaha different from a fixed-rate mortgage?
The question every Muslim homebuyer asks. The answer is structural, not semantic. The difference is not in the monthly payment — it is in who owns the asset, when, and what the contract says about that ownership.
| Mechanism | Fixed-Rate Mortgage | ✓HalalBank Murabaha Home Finance |
|---|---|---|
| Legal Structure | Bank lends money. Borrower buys property. Bank holds a charge over an asset it never owned. | ✓Bank purchases the property outright. Bank sells it to you at a disclosed mark-up. Ownership is real.Two separate sale contracts. No loan agreement. |
| Interest Mechanism | APR calculated on outstanding principal. You pay interest on interest if you miss a payment. | ✓Profit margin fixed at contract signing. Never recalculated. Never compounds.Total cost disclosed in full on day one. |
| Ownership Transfer | Title may transfer at purchase but beneficial ownership is encumbered until full repayment. | ✓Full beneficial and legal ownership transfers to you at the point of sale — not at the end of the term.Confirmed by independent title search. |
| Early Settlement | Early repayment charges apply. Break costs can equal 3–6 months of interest. | ✓No penalty. Remaining instalments are discounted at the bank's discretion under Ibra' (rebate) policy.Ibra' policy published in full on page 34 of audit report. |
| Shariah Board Audit | No Shariah review. No fatwa. No independent oversight. | ✓Annual review by three independent scholars. Contract template published. Fatwa on file.Ref: HB-MRB-2025-001 |
Shariah Board Ruling
The Murabaha contract used by HalalBank is structured as a genuine sale (Bay') followed by deferred payment instalments (Bai' Bithaman Ajil). The bank takes full ownership risk between purchase and on-sale. This structure is permissible under AAOIFI Shariah Standard No. 8. The profit margin is not interest — it is the bank's return from a real commercial transaction.
Ref: HB-MRB-2025-001 · AAOIFI SS-08
02/
How does Musharakah replace a business credit line?
A conventional credit line charges you for the right to use money. Musharakah gives you a partner who shares your upside and your downside. The mechanics are different in every line of the contract.
| Mechanism | Conventional Business Credit Line | ✓HalalBank Diminishing Musharakah |
|---|---|---|
| Capital Structure | Bank provides 100% of capital as debt. You bear 100% of operating risk. | ✓Bank and business co-invest. Risk is proportionate to equity stake of each party.Diminishing Musharakah: bank's share reduces with each payment. |
| Profit Calculation | Interest accrues daily on outstanding balance regardless of business performance. | ✓Profit distributed according to pre-agreed ratio. In loss months, bank shares the loss.Profit-sharing ratio fixed at contract. Loss-sharing ratio equals equity stake. |
| Collateral | Personal guarantee, director charges, debenture over all assets — standard. | ✓Security may be taken over the specific asset financed. No floating charge over unrelated assets.AAOIFI Shariah Standard No. 12 compliant. |
| Early Settlement | Prepayment fees of 1–3% plus interest-on-interest if arrears exist. | ✓Exit at net asset value of bank's remaining equity share. No additional fees.Valuation methodology on page 67 of audit report. |
| Reporting to Business | Monthly statement shows interest charged. No visibility into how rate is set. | ✓Quarterly profit-and-loss statement shared with both parties. Bank's return is transparent.Musharakah accounts are joint accounts — you have full read access. |
Shariah Board Ruling
Diminishing Musharakah (Musharakah Mutanaqisah) is structured as a partnership in which the client progressively purchases the bank's share until sole ownership is achieved. Each periodic payment contains two components: a profit-sharing payment (halal) and a unit purchase price (halal). There is no loan. There is no interest. The Shariah board has reviewed the standard contract and issued a standing fatwa permitting this structure for commercial financing.
Ref: HB-MSH-2025-007 · AAOIFI SS-12
03/
How do remittances move without riba touching a single transaction?
Most remittance providers earn money on the float — the time your funds sit in their account earning interest before being transferred. HalalBank uses a Wakala structure that makes this impossible by design.
| Mechanism | Standard Bank Transfer / SWIFT | ✓HalalBank Wakala Remittance |
|---|---|---|
| Transfer Mechanism | Bank holds funds, earns overnight interest on float, transfers next day at a spread. | ✓Wakala (agency) contract: you appoint HalalBank as agent. Funds are not invested or lent.Wakala fee disclosed upfront. Zero float income retained by bank. |
| FX Rate | Interbank rate plus a spread. Spread is not disclosed at point of transaction. | ✓Spot rate at time of Wakala appointment. Rate locked. Full cost shown before you confirm.No hidden spread. All fees on one line. |
| Recipient Country | Correspondent banking fees deducted en route. Recipient receives less than sender sends. | ✓HalalBank absorbs correspondent fees up to £15. Amount sent = amount received.Applies to 34 countries. Full list in audit report appendix C. |
| Riba Exposure | If transfer is delayed, funds earn interest in transit. Recipient may receive riba-tainted funds. | ✓Funds held in a segregated non-interest-bearing account. No riba can accrue at any stage.Account structure audited quarterly. |
| Documentation | SWIFT confirmation only. No Shariah documentation provided. | ✓Wakala agreement issued per transaction. Shariah certificate available on request.Digital fatwa reference included in every transaction receipt. |
Shariah Board Ruling
The Wakala (agency) contract appoints HalalBank as agent of the sender. The funds remain the property of the sender until the moment of delivery to the recipient. HalalBank earns a disclosed Wakala fee — not a spread, not interest on float. Funds are held in a segregated non-interest-bearing nostro account. This structure has been reviewed and approved under AAOIFI Shariah Standard No. 23.
Ref: HB-WKL-2025-014 · AAOIFI SS-23
04/
Download the Full Shariah Audit Report
112 pages. Every product contract reviewed by three independent Shariah scholars. Every ownership transfer documented. Every profit-sharing ratio disclosed. This is not a brochure — it is the source material.
→Full Murabaha contract template (English + Arabic)
→Diminishing Musharakah amortisation schedules
→Remittance Wakala agency agreement structure
→Shariah board fatwa references (AAOIFI standards)
→All 12 product comparison matrices — unredacted
Request access
No sales call. No follow-up sequence. Just the report.
By submitting, you agree that HalalBank may send you the requested document and relevant product updates. Unsubscribe at any time.
05/
Who audits HalalBank?
Three scholars with no equity stake in HalalBank review every product contract annually. Their rulings are published in full. Disagreements are documented. Nothing is redacted.
12Shariah-Certified Products
3Independent Scholars
112Pages in Audit Report
0Riba Transactions
✓
Dr. Ahmad bin Yusuf Al-Qardawi
Chairman, Shariah Supervisory Board
International Islamic University Malaysia
AAOIFI FellowISRA Researcher
✓
Shaykh Mufti Imran Usmani
Senior Shariah Advisor
Darul Uloom Karachi
AAOIFI Board MemberIDB Advisor
✓
Prof. Dr. Engku Rabiah Adawiah
Shariah Board Member
IIUM Institute of Islamic Banking
SC Malaysia PanelBNM SAC Member
Regulated & Certified By
AAOIFIBank Negara MalaysiaSecurities Commission MalaysiaISRA