Islamic banking refers to banking activities consistent with Islamic law ("ShariaIslamic law as revealed in the Quran and through the example of Prophet Muhammad.
A Sharia compliant product meets the requirements of Islamic law.
Sharia Board is the committee of Islamic scholars available to an Islamic financial institution for guidance and supervision in the development of Sharia compliant products.h") and guided by Islamic economics. Islamic finance aims to be the ethical and equitable mode of finance that derives its principles from Shariah law.

The Shariah is based on the following:

• the Quran,
• the Sunna : the teachings and practices of Prophet Muhammad and interpretations of the Quran,
• the Ijma : consensus of scholars,
• the Qiyas : analogical reasoning when the answer to a question is not in the Quran or in the Sunna.

In addition to the economic/financial dimension of a transaction, Shariah also places equal emphasis on the moral, ethical, social and religious dimension. The most distinctive element of Islamic finance is the prohibition of interest, whether "nominal" or "excessive", simple or compound, fixed or floating. Other elements include the emphasis on equitable contracts, the linking of finance to productivity, the desirability of profit sharing, and the prohibition of gambling and certain types of uncertainty. These parameters define the nature and scope of Islamic Finance, as interpreted by the Shariah scholars that work with Islamic financial institutions.

Calyon's Islamic finance products are examined and validated by our esteemed board of Islamic scholars who verify that all of our products are "Shariah compliant".

This board includes:

• Sheikh Nizam Yaquby,
• Dr Abdul Sattar Abu Ghuddah,
• Dr Mohamed Elgari.

Over time, most traditional wholesale banking products have been adapted to fit into the Islamic law criteria.
 

• Financing

MurabahaA form of credit which enables customers to make a purchase without having to take out an interest bearing loan. The bank buys an item and then sells it on to the customer on a deferred basis.
(trade facility)
Ijara A leasing agreement whereby the bank buys an item for a customer and then leases it back over a specific period
(leasing)
SukukIslamic Bond. Similar to an asset backed bond, Sukuk is a form of commercial paper that provides an investor with ownership in an underlying asset, and a return based on this ownership. The issuing entity needs to identify existing assets to sell to the Sukuk investors, via transference to an SPV.
The Sukuk investors then have a proportionate beneficial ownership in these assets. Investors typically take on the credit risk of the issuer rather than real asset risk on the assets owned by the SPV.
Sukuks can be listed and rated, though this is not necessary, depending on the target investor market. Sukuks are typically issued by corporate issuers, and some Financial Institutions, and also by Governments (Bahrain, Malaysia, Pakistan).
(Islamic bond)
 

• Capital Markets

Investment Products
Hedging Products
 

• Private Banking

• Insurance

Islamic finance is evolving and an ideal source of investor diversification. It will globalize over time. "There is strong demand from Islamic investors for more Shariah compliant products and we at Calyon are at the core of this development" explains Simon Eedle, head of Global Islamic Banking.