If an Islamic bank is under the regular supervision of a board of Shariah advisors or expert Shariah scholars and they approve of its products and services then it is permissible to conduct all kinds of transactions with such Islamic banks.
An Islamic banks is not essentially an educational institute of Islam. Rather, it is a financial institute wherein the products that they offer to consumers are in compliance with the teachings of Islamic Shariah.
There are many Islamic banks in operation throughout the world. Many follow universal Islamic banking standards approved by AAOIFI.
If a bank meets the requirements of AAOIFI then it would be considered an Islamic bank in terms of its products meeting the Shariah compliance standards.
Islamic banks continue to improve their products and it is the fastest growing banking sector in the world.
Admittedly, not all products offered at Islamic banks meet the highest objectives of Islamic Shari'ah. It is not to say that they do not meet the Shariah compliance standards. Nonetheless, it is a giant step in the right direction. The competition that Islamic banks face is one that is against the world banking system. In comparison, the size of world's conventional banking system is in 100's of trillion dollars while the size of Islamic banking system is still in billions which is still just a drop in the bucket.
May Allah make the growth of Islamic banking sector faster, successful and allow it to meet the highest objectives of Islamic Shari'ah.
And Allah knows best.
Mufti Ikram ul Haq
Fatwa Center of America