Islamic Information Center
Find out more about Habib Canadian Bank, the services we offer, and other useful information related to Islamic Banking.
What is CRS and FATCA?
The Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA) are international regulations that require financial institutions to report specific financial account information to tax authorities. These regulations ensure transparency and compliance for international account holders.
How Does Habib Canadian Bank Ensure Compliance?
- CRS: Under the CRS, we report information on accounts held by non-resident individuals and entities to their local tax authorities
- FATCA: As part of FATCA, we disclose information on accounts held by U.S. taxpayers to the IRS, ensuring full compliance with international tax laws
Your Responsibilities as an Account Holder
If you are a non-resident or U.S. citizen holding accounts with Habib Canadian Bank, you may need to provide additional documentation. Our team will guide you through the process to ensure seamless compliance with CRS and FATCA requirements.
Shariah-compliant Banking is an equity-based, asset-backed, ethical, sustainable, and socially responsible method of finance. It promotes risk-sharing, connects the financial sector with the market economy, and emphasizes financial inclusion and social welfare.
The Habib Bank AG Zurich Group and its subsidiaries actively participate in and promote this growing market segment to serve clients in accordance with the following principles:
| Principle | Description |
| Profit-sharing | Based on the principle of transactions (i.e., buying and selling), profit and loss sharing ensures economic justice and equity. Risk-sharing is an essential element of this principle. |
| Asset-backed | Each financial transaction must be tied to a tangible, identifiable underlying asset. The object of the contract must also be permissible under Shariah. |
| Avoidance of short selling | Transactions must involve tangible assets and ownership, meaning one cannot sell what they do not own. |
| Clarity in contracts | To ensure fairness, transparency, and sanctity of contracts, uncertainty or ambiguity is minimized. All contracts are vetted by the Shariah Board/Advisor, with ongoing independent oversight. |
| Social and environmental responsibility | Financial activities harmful to society are excluded. SCB promotes serving communities and advancing environmental, social, and governance (ESG) goals. |
Shariah refers to the revealed principles in the Quran and Sunnah (teachings, actions, and sayings of Prophet Muhammad, PBUH). It governs all aspects of society, including beliefs, practices, and principles of the Islamic faith.
The main difference between Islamic and conventional is that SCB prohibits Interest/Riba. Unlike conventional banks, Islamic banks emphasize trade-based (buy and sell) transactions and partnerships. SCB fosters wealth generation through Shariah-based trade and investments.
The validity of a transaction does not depend on the end result but rather the processes and activities executed and the sequence thereof in reaching the end. If a transaction is done according to the rules of Shariah, it is Shariah-compliant even if the end result of the product may appear to be same as in conventional banking product. The underlying nature of the transaction, the contracts and product structures used by SCB are quite different from that of the conventional bank.
Sirat is an integral part of Habib Canadian Bank’s parent organization, Habib Bank AG Zurich, and represents its global brand for Shariah-compliant banking (SCB). Its funds and operations are fully segregated to meet both regulatory and Shariah requirements. While operating under the same organization as conventional banking, SCB and conventional banking remain entirely separate.
In Sirat operations, Shariah-compliant funds and books are completely independent from conventional banking. The Islamic window maintains a separate general ledger, ensuring there is no co-mingling of funds with conventional bank accounts.
The distinct branding of Sirat highlights its differentiation from conventional banking services, reinforcing customer confidence and enabling informed decisions when selecting Shariah-compliant products. This ensures customers can trust that their chosen products align fully with Shariah principles.
Our Sirat products are reviewed, approved and certified by the Shariah Advisor for their Shariah compliance. We also conduct reviews of operations and processes on regular intervals with a view to maintain and strictly adhere to Shariah guidelines and best international practices.
Riba is the Arabic word for interest or usury. It refers to any increase over and above Loan-principal without any due consideration. It entails giving and/or taking any excess amount in exchange of a loan or on debt.
No, Shariah-compliant banking is open to everyone, irrespective of religion. Its principles promote the development of economies and communities.
With Sirat, clients can trust that their personal and business banking needs are met in accordance with Shariah guidelines, aligned with their values, and governed by Habib Bank AG Zurich Group’s ethical practices and international standards.
HCB invests Sirat funds exclusively in Shariah-compliant products. Moreover, the Bank also does placement with other banks that provide fully compliant Shariah avenues for placement & investment.
No. Islamic banks cannot guarantee fixed returns. However, expected rates are shared based on historical performance and forecasts.
Sheikh Yusuf serves as the Chairman of Shariah Advisory Boards of the Dow Jones Islamic Market Indexes, Guidance Residential (USA), InterVest (Kuwait Investment Advisory Group), Oasis Asset Management (South Africa), Aspect Investment Partners (Dubai), Sidra Capital (KSA), Fifth Third Bank (USA) and others.
Sheikh Yusuf is a member of the Shariah Committee of the Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI) and the Council of Scholars, International Shariah Research Academy (ISRA) at the Central Bank of Malaysia.
Sheikh Yusuf helped design the first Sukuk using assets based in the United States and was the Chairman of the Shariah board that approved the first corporate Sukuk in Saudi Arabia.
He was a founding member of the Governing Council of the International Centre for Education in Islamic Finance (INCEIF) in Malaysia, a member of the Board of Advisors at the Dubai Center for Islamic Banking & Finance and also served as an advisor on Islamic Education to the Government of Pakistan from 1981 to 1984.
Sheikh Yusuf has published English translations of several classics, including Al-Bukhari’s Al-Adab Al-Mufrad, Al-Ghazali’s Kitab Al-Halal Wa’l-Haram (Volume Fourteen) and Ihya `Uloom Al-Din published by the Islamic Texts Society in the UK.
Each Islamic Banking product is carefully developed by Islamic Product Specialists. It is then thoroughly reviewed and approved by scholar(s) who are well-trained in Islamic commercial law and have a grip on contemporary banking landscape. Hence ensuring the products being offered from the Islamic Bank are fully compliant with requirements of the Islamic Law.
Our SCB mandate has been reviewed and certified by Global Shariah Supervisory Boards & reputable Shariah Advisors.
The profit earned from your Shariah-compliant account such as savings or index linked term deposits, is treated as investment income for tax purposes. It should be reported as interest income on your tax return, even though it is derived from Shariah-compliant transactions.
To report this:
- You will receive a T5 Statement of Investment Income if profits exceed the reporting threshold
- Enter the amount shown on the T5 slip under the appropriate section for interest income on your T1 General Tax Return
- If you have not received a T5 but earned profit, consult your bank statements and include the total profit amount in your tax return