The new banking system offers its clients the first halal banking experience in the US, promising interest-free lending and ethical investments.
Fair is a “neobank” or digital bank that practices principles under Islamic law that prohibit usury or interest collection. Honest customers can conduct business through its application, where customers can find a range of financial services based on Honesty guidelines. Each service is available for a one-time connection fee.
The new bank’s digital finance platform is the only one in the US to be certified by AAOIFI in Islamic finance. The system is also FDIC insured.
Customers can also avoid hidden fees and pay no fees for international money transfers. Wire transfer fees average around $ 45-50 for transfers outside the United States. The fair also offers free ATM machines, ATM machines and debit cards for children that are supervised by parents.
Membership gives customers access to “wholesale prices” just like retailers like Costco. The bank launched this month with over $ 20 million raised from independent investors.
The neobanking market was $ 20.4 billion in 2018 and is projected to reach $ 471.0 billion by 2026. Fair says it has created a halal financial technology platform to address the challenges of banking practices that are contributing to widening the wealth gap and the availability of financial instruments for underserved populations.
A one-time membership fee of $ 99, paid in full or in installments, gives you unlimited access to all Fair’s online banking and financial services, including interest-free lending, investments and insurance, all in one platform. Honest customers also avoid bank fees, which Americans pay an average of $ 329 a year. Hidden bank charges cost Americans $ 11.6 billion in the first three months of the COVID-19 pandemic.
“The fair was created by an immigrant for immigrants,” Khalid Parekh, founder and CEO of Fair, told The Arab American News. “I am an Indian immigrant who came to the US 20 years ago with $ 100 in my pocket. I wrestled with the American banking system and the fact that the bankers wouldn’t really help me if I didn’t have a large balance sheet and that I would be paid recognition for not having a certain amount. And international transfers have never been convenient. ”
Pareh said Fair banking principles under Sharia law work by allowing their clients to make deposits without using the Fair, using those funds, lending them to other people for later profit. Fair also uses a consultant platform to ensure that Fair only recommends Sharia-compliant financial products. The bank also promises to clients a 2% dividend on savings. This is compared to 0.9 national average for major US banking institutions, according to the National Credit Union Administration.
“We do not show interest and do not accept interests,” Parekh said. “I wanted Fair to be more than a bank, I wanted it to be a whole financial institution where I could do banking, lend, invest and retire. We want to help our clients along the entire financial journey. “
Our motto is people are more important than profit. We do not want to borrow money from investors that will affect the products and services we offer to our clients – Khalid Parekh, Founder and CEO of Fair
The fair provides interest-free lending to home cars and businesses. On the housing side, Fair uses an equity-based platform where it matches customer payments to a home. Fair sets up an LLC (limited liability company) with a customer to buy a house. Every month the customer buys Fair shares towards the principle.
“We take equal risks when people live at home and do due diligence and credit underwriting for all of our members,” Parekh said.
Fair says its retirement investments are made in bubble-free markets and avoiding companies that are perceived to have negative social impacts, such as companies that profit from poor labor standards, harmful products, or environmental destruction. The Fair also uses the Islamic principle of Sadaqa-e-Jariya, or voluntary charity, a type of charity that benefits people in the long term and continues to reward the donor even after death.
“Our first investors are all immigrant businessmen,” Parekh said. “We did not take money from large banks or financial institutions. Our motto is people are more important than profit. We do not want to borrow money from investors that will affect the products and services we offer to our clients. “
Parekh said that while Fair is intended to provide affordable and halal digital banking for Muslim Americans, it can be used by anyone interested in ethical banking and wanting to avoid standard commercial banking practices.
More information about the fair can be found via bankwithfair.com