Answer
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
Dear questioner, we are greatly pleased to receive your question which shows the confidence you place in us. May Allah reward you abundantly for your interest in knowing the teachings of Islam.
Responding to the question, Prof. Dr. Monzer Kahf, Professor of Islamic Finance and Economics at Qatar Faculty of Islamic Studies, states:
Yes, it is certainly permissible to deal with Islamic banks in Palestine. The transaction you described is called murabahah, which is permissible. The Islamic bank buys the materials from their seller on a cash basis and you buy the same from the bank on an installment basis. It usually begins with mutual promises that you request the Islamic bank to buy the materials and promise to buy them from the bank after it gets them. This is the standard form of transactions all Islamic banks deal with.
But are you sure sister that the Cairo Amman Bank is Islamic, I never heard of it being Islamic, I know you have the Islamic Bank of Palestine in Gazza which was established a few years back. I ask this because I know all Islamic banks have Shari`ah boards that supervise their transactions from the Islamic point of view, so you do not worry when you deal with any Islamic bank. Does the Islamic Cairo Amman Bank have a Shari`ah board? Is it a bank that converted to Islamic practices recently? Or is it a conventional bank that opens a window or a branch for Islamic transactions?
In the latter cases just be sure it has a Shari`ah board and if not you need to be sure that the contract format has been seen and approved by a respected Shari`ah scholar. I say that because some conventional banks in some Arab countries offer “Islamic transactions” that are not really screened by any scholars, and consequently they may have some serious errors from the Shari`ah point of view.
Allah Almighty knows best.