General Overview

Islamic banking and finance is becoming one of the most significant aspects of the modern global financial system; because it is a fast-growing industry that has developed rapidly within a few years from a niche industry to a global force to be reckoned with in the international arena.

Islamic Finance, developed during the 70’s in the Muslim countries, is experiencing an increasing popularity far outside the Muslim World’s frontiers. In a world where the dominance of the capitalist economy is obvious, the development of a system where the main principle is the exclusion the interest rate comes close to being an exploit.

At first, Islamic finance has been implemented in the Western World mainly to benefit from the advantages offered by European financial centres such as the Luxembourg and Switzerland. From this first tendency, only the corporate and private banking clients have taken advantage of. It is only recently that retail services started to be offered on the Western territory, conscious of the increasing economic power of the different European and Balcan Muslim communities.


The Muslim communities settled in Europe have different origins and migration stories. They have however the common ground of being newly installed in their host country, claiming at most fifty years of presence. They are mainly characterized by a religious revival and a desire, pronounced even deeper for the new generations, to live in compliance with their faith. This search of a particular identity has resulted in the emergence of a niche market with an exceptional potential: the ethnic market and more specifically in a Muslim context, the “halal” market, the word “halal” meaning “compliant to the Islamic law”. In a context where Islam is a minority religion, Muslim immigrant populations tried to adapt their environment to their religious values. The first market influenced by Islamic rules is the food sector, especially the meat industry.

This growing market illustrates two important facts: the first is that the Muslim population is increasingly considered as an important potential market with specific needs. The second is that the building of a European identity of the Muslim community is reconciling capitalist consumption norms and Islamic values.

Initially limited to the food industry, the halal market is in fact much bigger: alternative sodas, clothes, music… and finance. In the field of finance, this objective of conformity implies the impossibility for Muslims to use the majority of financing and investment products available on the market, as most of them are based on the paying or receiving of an interest fee. 



As basic fundamental of its functioning, Islamic finance rejects any source of unjustified wealth creation: one of these sources considered as unjustified is the payment and reception of an interest rate fee, as Islamic recognizes only two roles to money: exchange middle and a unit of value and does not legitimate the role of money as a “value reserve”. Therefore, it cannot accept the traditional financing system based on a predefined remuneration, the interest fee as price of the capital.

The first Islamic economists defined and built a parallel financial system based on a participation finance, where the money will become working capital only when it is linked with the evolution of an economic activity or with the value of goods/services. Its yield will depend on the principle of profit and loss sharing, principle that links the profit of a transaction to the achievement of an economic activity.

This principle modifies the way a bank is organised: being a financial intermediary between its investing and financing clients, the relationship between these two parties becomes an investor-entrepreneur relation based on the profit and loss hasting instead of a predefined interest margin.

In this framework, generally the Islamic banks and specifically we at United Bank of Albania are continually trying to deploy new technics based on initially commercial contracts that were adapted in order to meet investment and financing needs of our clients.

Islamic Economic System

The economic system of Islam is the collection of rules, values and standards of conduct that organize economic life and establish relations of production in an Islamic society. These rules and standards are based on the Islamic order as recognized in the Koran and Sunna and the corpus of jurisprudence opus which was developed over the last 1400 years by thousands of jurist, responding to the changing circumstances and evolving life of Muslims all over the globe. 

  • Today’s trade and commerce in the whole world is run on the basis of interest based debt. If we look at the money and capital markets in any country we find that they are basically markets for exchanging financial obligations and receivables.

    It is no wonder that just the mere thought that interest rate may go up (or down) will bring havoc to all sectors of the economy. Standard economic analysis tells that interest rates play important roles in the economy.

    Firstly, that it provides incentives for savings, and secondly that it performs an allocative function with regard to capital. 

  • Usually, a main question is raised for discussion: Does the fact that Islam prohibits interest mean that there is no time value of money in the Islamic economic system?

    The answer is negative. Shari’ah does recognize the time value of money.

    There is ample evidence to show that monetary value in many Shari’ah prescribed transactions is attached to time.

  • Policies that are used to determine the extent of risk-taking of insurance operators against the payment of certain premiums are known as underwriting policies. The amount of liability to be accepted and the extent of coverage fall under the underwriting policies.

    There must be adequate measures to ensure that the underwriting policies and investment strategies are Shari‘ah-compliant. Investment of insurance funds should be made in ethical businesses that do not cause harm to people or the environment.

    In addition, ethical considerations in takaful extend to investment in businesses or products that do not contradict the Shari‘ah. Both the process and the end product must be Sharī‘ah-compliant.

    For instance, investment in breweries and casinos are forbidden in Islam. In a similarity, insurance underwriting policies must not contradict the Shari‘ah. These can be realized through the setting-up of a functional Shari‘ah board to guide and approve underwriting policies, investment strategies, and the operators’ products.

Islamic Products

The following are representing in shorten the main contract concepts which are representing the main Islamic products with interest free implemented and available also to all UBA’s clients:

A first instrument that is often used by UBA Bank, is the Musharaka contract: it is relative similar to the Mudharaba contract with the difference that both parties bring money and management to the common project. 

This contract has as per the basic the participative financial practices in the Islamic Finance and is generally applied to long term corporate project financing. Given the risk implied in such investment contract, it cannot be easily applied to SME or retail clients with short term financing needs. Therefore, other techniques have been developed, based also on commercial contracts that have been adapted: among these contracts, the Murahaba and Ijara contracts are the most popular.

The Murabaha contract is initially a simple sale contract where the sales price and the profit margin are negotiated between the buyer and the seller. This commercial practice has been adapted in order to apply as financing instrument: in this case, the bank which will finance the client’s project will become an intermediary owner between the seller and the buyer and will let a credit to its clients, allowing him to reimburse its debt in an agreed duration.

The Ijara contract is similar to the leasing contract with a sale option at the end of the lease period: the bank will buy the good and rent it to its client. At the term of the contract, it will transfer the ownership of the contract to its client, in exchange of an agreed residual amount of money.

Diminishing Partnership (DP) contract is a form of joint-venture where financier (the Bank) and the customer will participate in the joint ownership of property or equipment or in a joint commercial enterprise. The share of financier is devided into several units (shares) and it is undestood that the clent will buy shares from the financier until he becomes the sole owner of the property.

Contract based on Qard Hasan principle include a general–purpose interest free loan. Each Islamic bank, should have a fund for interest–free loans. Given that the Quard-Hasan fund is limited, this financing is given to the mos vulnerable categories of the population.            



By reading the selected list of question and answers shown as below, we kindly invite you to find out more about Islamic banking, how it differs from conventional banking and why it is an ethical choice.

What is Islamic banking?

Islamic banking is consistent with the principles of Sharia. A key factor is that it operates without applying interest, which is not permitted in Islam religion, as money by itself is not considered to be a commodity from which you can profit.

How are Islamic banks different?

Islamic banks are based on an asset-backed system of finance and develop partnerships with their customers where risk and reward are shared. Unlike many conventional banks, Islamic banks only invest customers’ deposits in ethical activities which are consistent with the principles of Sharia.

What are the founding principles of Islamic Banking?

Islamic banks are founded on faith-based, ethical principles that are derived from trade, entrepreneurship and risk-sharing. As money by itself is not considered to be a commodity from which you can profit, no interest is paid or received by Islamic banks. The ethics and values which underpin Islamic banking include inclusivity, transparency, integrity, respect and fairness.

How do Islamic banks work different with their customer?

Unlike the conventional bank-customer relationship, Islamic banks work with their customers in partnership, sharing risk and reward.

How is Islamic Banking ethical?

Islamic banks only use their customers’ deposits for investments which are permitted in Sharia. So, customers’ money will never be invested in gambling, alcohol, arms, tobacco, pornography or any interest bearing activities.The activities of UBA Bank are constantly monitored by UBA's Sharia Adviser.

How do Islamic banks invest?

The source of the Islamic bank’s funding, profits and business investments cannot be in/from businesses that are considered unlawful under Sharia, such as gambling, alcohol, arms, tobacco, pornography or any interest bearing activities.

What is wrong with an interest based system?

Under the principles of Sharia, the presence of interest creates an inequitable relationship between two parties favoring one over the other; this imbalance can ultimately lead to wider negative social and economic implications, as has been seen in recent years with several major global banks failing. This is why it is forbidden in the Qur’an as generating money from money is effortless and useless approach of making money, it instead encourages trade and investment.

What is Debit MasterCard used for?

Debit card serves to have access and usage of your bank account, with no need to go in branches. You can withdraw cash from ATM and make payments at POS displaying logos of  MasterCard /Maestro.

What should I do if my card or the wallet in which was the card is stolen?

Immediately you should call in one of the below number:
⦁    +355 34224742
⦁    +355 44548888
Your card will be block for prevent any potential abuse. You must present to the bank and to fill an application for reprinting the card. The reprinted card will have new card number and expiry date, in order to minimize the risk of any potential abuse.  

What should I do if an ATM machine keeps my card?

After checking which bank belong the ATM where the card is kept, you should immediately notify your UBA Bank in the above numbers and follow the instructions of the bank's staff.

Until which date exactly is my debit card valid?

Your debit card is valid till the last day of the month that is printed in the card..


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