FAQ

There are over 1.5 billion Moslem in the world today, and almost a quarter of them live in countries having Muslim majorities in which HSBC operates. These people are looking increasingly for financial products, which are in harmony with their religious beliefs. HSBC understands the needs of our local communities, and the HSBC Amanah brand responds to the desire of our Muslim customers for our Shariah compliant services to be fully differentiated from our conventional financial services.

HSBC Amanah is the global Islamic financial services division of the HSBC Group, responsible for the development of Islamic financial products for distribution to customers of the HSBC Group. It was established in 1998 and is now based in London (UK) with regional offices in Dubai, US, Saudi Arabia, Malaysia, Indonesia, Singapore and Brunei.

Since the local regulation requires Shariah Banks and Shariah Banking Unit to incorporate the word "Shariah" at the end of the bank's name, we are known as HSBC Amanah in Indonesia. HSBC Amanah is the first foreign bank to open a Shariah Banking Unit in Indonesia and was established in 20 October 2003. We have been focusing on the corporate sector ever since, which you will find that HSBC Amanah is capable of arranging Shariah corporate deal from a plain vanilla Murabahah financing to a complex syndicated deal.

Islamic law does not require that the seller of a product be Muslim, or that its other services also be Islamic. This is the considered opinion of our Shariah Supervisory Committee. Conventional banks charge and pay interest, and HSBC is a conventional bank. But HSBC is also a customer-driven institution, and the reason it provides Islamic products is to serve a genuine financial need among Moslem. Of course, our Islamic products are available for Moslem and non-Moslem alike.

All our products are approved and certified by the Central Shariah Supervisory Committee, which comprises four of the most eminent scholars in the field of Islamic finance.

• Dr. K.H. M.A. Sahal Mahfudh (Chairman) .
• Prof. Dr. H.M. Din Syamsuddin.
• Ikhwan Abidin Basri, M.Sc.

HSBC is also a customer-driven institution, and the reason it provides Islamic products is to serve a genuine financial need among Moslem. Of course, our Islamic products are available for Moslem and non-Moslem alike.

• Broad-based economic well-being with full employment and optimum rate of economic growth
• Socio-economic justice and equitable distribution of income and wealth;
• Stability in the value of money to enable the medium of exchange to be a reliable unit of account, a just standard of deferred payments, and a stable store of value.
• Mobilization and investment of savings for economic development in an equitable manner such that a just return is ensured to all parties

Riba has been classified into Riba al-Nasee'ah and Riba al-Fadl. The type of riba associated with interest is Riba al-Nasee'ah, also known as Riba al-Quran or Riba al-Jahiliyyah. It is collected in compensation for deferring a due debt to a new term of deferment. This definition applies regardless of the source of the due debt: whether it resulted from a loan, or a deferred price in a sale. The prohibition of this form of riba is primarily based on the following verse of the Quran:

"You who believe, heed Allah and write off anything that remains outstanding from lending at interest if you are [true] believers. If you do not do so, then be prepared to face war declared by Allah and His messenger! If you repent, you may retain your principal. Do not wrong [others] and you will not be wronged. (Al-Quran 2:278-279)"

For those who are interested, there is also another type of riba called Riba al-Fadl, or Riba al-Buyu'. It pertains to six goods (gold, silver, wheat, barley, salt, and dates). This was forbidden to prevent potential circumvention of riba al-nasee'ah, which can be effected by selling gold with a deferred price, which the debtor later pays with increase containing riba disguised through a payment in silver. The Shariah scholars are unanimous over the prohibition of this type of riba and its characterization, based on the Hadith narrated by Al-Bukhari and Muslim on the authority of Abu Said Al-Khudri:

"Do not trade gold for gold except in equal amounts, with no increase of one over the other; and do not trade silver for silver except in equal amount, with no increase of one over the others."

As is evident from the verse quoted above, the rationale behind the prohibition of interest in Islam suggests an economic system where all forms of exploitation ("neither wrong or be wronged") are eliminated. In particular, Islam wishes to establish justice between the financier and the entrepreneur: the financier should not be assured of a positive return without doing any work or sharing in the risk, while the entrepreneur, in spite of his management and hard work, is not assured of such a positive return.

While Islamic socioeconomic goals are beyond the mandate of HSBC Amanah or the Central Supervisory Committee, they provide the context within which the Islamic prohibition of riba is properly understood.