Job In Trade Finance Banking As Compared To Corporate Banking
Banks conduct two types of transactions. The first is a personal loan, where the bank does not require the borrower to specify how the funds will be used. The interest charged on this type of loan is considered usury (Riba), which is prohibited in Islam. Therefore, facilitating personal loans with interest is not permissible. The second type involves investment with the client. Although the bank may refer to this as a loan, it is, in fact, an investment. The bank only disburses funds once the client presents a justified business plan. In this case, the profit earned by the bank is not considered usury (Riba), and such transactions are allowed in Islam.