INTRODUCTION OS ISLAMIC BANKING

1.Introduction
In the developing country like Pakistan it is one life’s most important achievement to own a home. Because it provides the security, stability and is a great blessing in itself. Now days it is unpredictable and costly environment, saving the required money can take a life time in itself. Rising property prices, taxes, inflation, currency devaluation, it is very hard task. On the other hand owing own home by paying an easy instalments that takes the step towards complete the ownership, is so much better than paying the rent which ultimately addition in the expenses rather than the ownership of the property. By accepting the borrowing options that being a Muslim one should accept the totally Riba – Free (interest free) financing option for inner satisfaction and peace of mind, because Allah prohibited the interest for believers. Islamic mortgage lending based on a diminishing Musharakah base, which means where bank provides the certain amount of finance to the customer and the borrower agree to a monthly payment to the bank of which a component is for the use of the home (rent), and another for customer’s equity share, as the result the monthly payment reduced regularly and customer’s share in the mortgage property grows. When the borrower made the full investment thathad been agreed, then he becomes the sole owner of the property and bank removed its charge from the property. But here the point is this why the people of country are entering the interest based structure instead of interest free banking system.<http://www.meezanbank.com/easyhome.asp >In a home mortgage market there are no limits to the options. This has made it possible for almost anyone to buy, construct or renovate the home. Most people however rush headlong into the mortgage process without checking out the options. This could be because we are too busy to study the market, or would like to use the same company as people they know. At the time of entering the mortgage contract there should be study before choosing the mortgage options. There are numerous items like attractive rates, lock in periods, insurance benefits and other add-ons to sweeten the deal. It is always beneficial for the borrower to compare the various options available inhe market. That’s why one will know that he/she is getting the best deal. Here the question becomes, what source of mortgage should be used and how one can glean these information.http://www.4loanranger.com/bank-loan/index.htmlThe Shariah prohibits interest or usury, gambling and gharar (undue risk taking), involvement in trading in such goods and services that are unlawful in themselves. As such, Islamic banking products are fundamentally and conceptually different from conventional banking products, although in order to facilitate customer ease and clarity of understanding, such products often emulate the packaging and presentation of conventional banking products. This does not mean that these products are the same as those offered by conventional banks. Islamic Banks serve the same purpose to customers and the functions of Islamic banks are and will remain essentially that of financial intermediaries.<http://www.nbp.com.pk/EcomomicBulletin/Economic%20Bulletin%20Jan-Feb%202005.pdf>