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Which bank in Pakistan gives interest-free loans?

Published in Finance 1 min read

There are no conventional banks in Pakistan that offer interest-free loans. Islamic banking principles, which are followed by many banks in Pakistan, prohibit the charging or receiving of interest. Instead, they offer Shariah-compliant financing options such as:

  • Murabaha: This involves the bank purchasing the asset and then reselling it to the borrower at a markup price.
  • Ijarah: This is a lease agreement where the bank owns the asset and leases it to the borrower for a specific period.
  • Musharakah: This is a profit-sharing partnership where the bank and the borrower jointly invest in an asset.

However, several Islamic banks in Pakistan offer these alternative financing options, which are considered interest-free. Some of these banks include:

These banks operate under Islamic banking principles and provide financing solutions that are compliant with Shariah law.

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