25 Responses to 'CNBC World – Islamic Finance: Applying religion to economics'
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@hamidmushtaq but at least this is a step in the right direction,, when no country in the world offers a harbor for Islamic banking systems it becomes very difficult to start a 100% Islamic banking sys….. i guess they r doing fine for know and god be with them to completely revert it into pure Islamic banking
Also many Islamic scholars including Zakir naik say that Islamic banking is not islamic. In theory, Islamic banks should be full reserve, but no islamic bank practice full reserve banking. So even if it is part Islamic, its not ok, because even a drop of impurity, spoils a drink. Unless Islamic banks become 100% islamic, they must be called islamic. They should make it clear to their customers, what services are islamic and what not, but they don’t, so they are deceiving us!
You can read the book of Maulana Taqi Usmani, “An introduction to islamic finance”. He is one of the pioneer of Islamic Banking in Pakistan. Yet even he suggests that murabha should be avoided by islamic banks at all cost and is just a transitional step, it should ultimately be abolished. yet 66 % of profit is earned through Murabaha by the Islamic banks. Taqi usmani even recently declared that 80 % of sukkuks are haraam.
No offence w.r.t the last post, it is meant with all sincerity (and a bit of unavoidable sarcasm). When you do have a reliable source, I’ll be keen to take a look.
…and I don’t suppose you have any sources for this claim you are making? At the very least, cite someone credible who says these aren’t halal?
At the risk of judging you: It sounds a bit like pedestrian who picks up a book and criticises it for what is now known, undermining the process it took to discover – if you’re NOT doing that then this is original research; you should try teaching your ideas and build knowledge rather than be a miffed consumer who refuses to help the community improve.
(cont…). The fake Murabaha is actually an invention. The Muslim scholars took seperate concepts of defered payment, Murabaha and agent and combined it into one, to make it appear a valid contract. But the actual intent is wrong here. It may follow the letter of the law, but not the spirit of prohibition. Islamic Banks are therefore deception and I will never deal with them.
Profit making with effort is OK, but profit making without doing any effort is not OK. The fake Murabaha that Islamic Bank do, takes no effort from the bank. The bank makes the customer its agent and gives him money to buy the item. After buying, the customer informs the bank and then the item is transferred to him as a customer. So basically the bank did the same think as a conventional bank, but called it a sale. (cont…)
BTW from your comment ‘….all they do is earn…’ am I to understand that profit-making is somehow undesirable?
I disagree that deferred payment constitutes loan – it is accrued payment. In my books a loan is specifically that which can incur interest or some form of penalty from non-payment. Risk factors taken into consideration, a bank will always have a necessary interest in timely payment, say for a home loan – but in Islamic banking there is no question of non-payment fee/penalty.
Perhaps I should have clarified – by Islamic banking I meant the *system* incorporating the beliefs and value systems of Islam related to finance, NOT Islamic Banks (with a capital B for further cognizance). Note that the former is a theological notion.
I said that Islam discourages loan (not Islamic banks). Like I said before, Islamic banks are not islamic as all they do is to earn through financial loans! A defered payment sale is indeed a form of a loan!
I’m sorry but you’re quite off the mark here. Nowhere does Islamic banking discourage loans – though be that the case, loans per se do not exist in Islamic banking just as an asset based financial product inherently excludes loaning. May be so with currency based product (which falls within current banking system stipulations).
(cont…) they were still punished. Actually God ordered them not to finish during saturdays, so what they dug canals, so that fish would get into them and then they would easily catch them on Sunday or some day other than saturday. So technically speaking, they didn’t fish on saturday, yet God punished them because their intent was wrong. Same is the case with Islamic bankers. They can fool people, but can’t fool God!
Yes you are right, the people who have studied from such universities work in Islamic banks, so a capitalist mentally has already been built into them during their studies. So they actually try to make Islamic banks work as much like a conventional banks as possible, and to do away with riba, they invent (actually not them, but some Islamic scholars) invent nonsensical schemes and call them ribafree. Israeilites once also did a similar thing, that is playing with letter of law and (cont…)
i agree with everything you have just said and you have put it better than I ever could. I agree making money out of money is does not work. Banking profits should be derived from successful investments as opposed to interest. The money we use today is not pegged to anything tangiable its only paper. I have studied economics and also i have friends who study it at top universities they laugh at me when i say can economies and finance be run without interest.
(cont…) fiat money has no intrinsic value while a gold coin has! we should abolish interest all together and baitulmaal (house of wealth) should be established at government level, which lends people at no interest for business purposes. Banks should be there to only protect people’s money and transfer money. Lending business should not be commercialized!
I don’t think that banking can ever be islamic just like prostitution, gambling or drinking can never be. Banking is inherently unislamic. Islam encourages giving loan (interest free), but discourages taking loans. But what all banks do is to encourage people on taking loans because they make profit from it. Islamic banks all depend upon deferred payment, which is also a form of loan. The solution is to introduce gold and silver dinars and get rid of fiat money! (continued…)
if we didnt have the current banking system and went for a non intrest finance such as islamic finance non of us would probably be in this economic crisis.
some of you islamophobes might hate to see the FACT that islam is actully doing something right for you, but please help urselves, bite the bullet and acknowledge the benifit this market has offered thousands if not millions of people around the world.
if it wasnt for shairah complient finance alot of people would have no hope.
not really, you see jewish banking is something you already have, its that market where you have huge intrest and usery where people are ripped of and greater unfair prevails. budhists dont revel in money and finance,muslims however do and are quite ethical about it
they dont believe in making money on other peoples expense and so therefore incorouage fairness and trust. no intrest is involved so that means a win win situation for both parties in the transaction
If that were the case, then Shariah law would have allowed muslims to charge non muslims interest but would not charge muslim borrowers any. Thats the point though, it doesnt. Islam doesnt allow for a Muslim to take or give interest to a Muslim or a non Muslim.
@hamidmushtaq but at least this is a step in the right direction,, when no country in the world offers a harbor for Islamic banking systems it becomes very difficult to start a 100% Islamic banking sys….. i guess they r doing fine for know and god be with them to completely revert it into pure Islamic banking
AEROMANIA86
6 Feb 10 at 4:20 pm
Also many Islamic scholars including Zakir naik say that Islamic banking is not islamic. In theory, Islamic banks should be full reserve, but no islamic bank practice full reserve banking. So even if it is part Islamic, its not ok, because even a drop of impurity, spoils a drink. Unless Islamic banks become 100% islamic, they must be called islamic. They should make it clear to their customers, what services are islamic and what not, but they don’t, so they are deceiving us!
hamidmushtaq
6 Feb 10 at 5:13 pm
You can read the book of Maulana Taqi Usmani, “An introduction to islamic finance”. He is one of the pioneer of Islamic Banking in Pakistan. Yet even he suggests that murabha should be avoided by islamic banks at all cost and is just a transitional step, it should ultimately be abolished. yet 66 % of profit is earned through Murabaha by the Islamic banks. Taqi usmani even recently declared that 80 % of sukkuks are haraam.
hamidmushtaq
6 Feb 10 at 5:49 pm
No offence w.r.t the last post, it is meant with all sincerity (and a bit of unavoidable sarcasm). When you do have a reliable source, I’ll be keen to take a look.
Mezdazzma
6 Feb 10 at 5:56 pm
…and I don’t suppose you have any sources for this claim you are making? At the very least, cite someone credible who says these aren’t halal?
At the risk of judging you: It sounds a bit like pedestrian who picks up a book and criticises it for what is now known, undermining the process it took to discover – if you’re NOT doing that then this is original research; you should try teaching your ideas and build knowledge rather than be a miffed consumer who refuses to help the community improve.
Mezdazzma
6 Feb 10 at 6:05 pm
(cont…). The fake Murabaha is actually an invention. The Muslim scholars took seperate concepts of defered payment, Murabaha and agent and combined it into one, to make it appear a valid contract. But the actual intent is wrong here. It may follow the letter of the law, but not the spirit of prohibition. Islamic Banks are therefore deception and I will never deal with them.
hamidmushtaq
6 Feb 10 at 6:32 pm
Profit making with effort is OK, but profit making without doing any effort is not OK. The fake Murabaha that Islamic Bank do, takes no effort from the bank. The bank makes the customer its agent and gives him money to buy the item. After buying, the customer informs the bank and then the item is transferred to him as a customer. So basically the bank did the same think as a conventional bank, but called it a sale. (cont…)
hamidmushtaq
6 Feb 10 at 6:47 pm
BTW from your comment ‘….all they do is earn…’ am I to understand that profit-making is somehow undesirable?
I disagree that deferred payment constitutes loan – it is accrued payment. In my books a loan is specifically that which can incur interest or some form of penalty from non-payment. Risk factors taken into consideration, a bank will always have a necessary interest in timely payment, say for a home loan – but in Islamic banking there is no question of non-payment fee/penalty.
Mezdazzma
6 Feb 10 at 7:42 pm
Perhaps I should have clarified – by Islamic banking I meant the *system* incorporating the beliefs and value systems of Islam related to finance, NOT Islamic Banks (with a capital B for further cognizance). Note that the former is a theological notion.
Mezdazzma
6 Feb 10 at 8:37 pm
I said that Islam discourages loan (not Islamic banks). Like I said before, Islamic banks are not islamic as all they do is to earn through financial loans! A defered payment sale is indeed a form of a loan!
hamidmushtaq
6 Feb 10 at 8:56 pm
hamidmushtaq,
I’m sorry but you’re quite off the mark here. Nowhere does Islamic banking discourage loans – though be that the case, loans per se do not exist in Islamic banking just as an asset based financial product inherently excludes loaning. May be so with currency based product (which falls within current banking system stipulations).
Mezdazzma
6 Feb 10 at 9:06 pm
(cont…) they were still punished. Actually God ordered them not to finish during saturdays, so what they dug canals, so that fish would get into them and then they would easily catch them on Sunday or some day other than saturday. So technically speaking, they didn’t fish on saturday, yet God punished them because their intent was wrong. Same is the case with Islamic bankers. They can fool people, but can’t fool God!
hamidmushtaq
6 Feb 10 at 9:07 pm
Yes you are right, the people who have studied from such universities work in Islamic banks, so a capitalist mentally has already been built into them during their studies. So they actually try to make Islamic banks work as much like a conventional banks as possible, and to do away with riba, they invent (actually not them, but some Islamic scholars) invent nonsensical schemes and call them ribafree. Israeilites once also did a similar thing, that is playing with letter of law and (cont…)
hamidmushtaq
6 Feb 10 at 9:52 pm
i agree with everything you have just said and you have put it better than I ever could. I agree making money out of money is does not work. Banking profits should be derived from successful investments as opposed to interest. The money we use today is not pegged to anything tangiable its only paper. I have studied economics and also i have friends who study it at top universities they laugh at me when i say can economies and finance be run without interest.
josg11
6 Feb 10 at 10:30 pm
The current banking system is jewish banking system as interest was invented by them.
hamidmushtaq
6 Feb 10 at 10:36 pm
(cont…) fiat money has no intrinsic value while a gold coin has! we should abolish interest all together and baitulmaal (house of wealth) should be established at government level, which lends people at no interest for business purposes. Banks should be there to only protect people’s money and transfer money. Lending business should not be commercialized!
hamidmushtaq
6 Feb 10 at 10:38 pm
I don’t think that banking can ever be islamic just like prostitution, gambling or drinking can never be. Banking is inherently unislamic. Islam encourages giving loan (interest free), but discourages taking loans. But what all banks do is to encourage people on taking loans because they make profit from it. Islamic banks all depend upon deferred payment, which is also a form of loan. The solution is to introduce gold and silver dinars and get rid of fiat money! (continued…)
hamidmushtaq
6 Feb 10 at 10:49 pm
i think there can be islamic banking but most of the examples now are using riba
josg11
6 Feb 10 at 10:57 pm
I’m a muslim, I’m against banking overall. In my opinion, banking cannot be islamic and Islamic Banking is indeed a back door to riba.
hamidmushtaq
6 Feb 10 at 11:50 pm
I don’t think, Islamic banks are really following Islam. Had they been following Islam properly, they would not be earning so much!
hamidmushtaq
7 Feb 10 at 12:36 am
if we didnt have the current banking system and went for a non intrest finance such as islamic finance non of us would probably be in this economic crisis.
some of you islamophobes might hate to see the FACT that islam is actully doing something right for you, but please help urselves, bite the bullet and acknowledge the benifit this market has offered thousands if not millions of people around the world.
if it wasnt for shairah complient finance alot of people would have no hope.
RedSeaCoral
7 Feb 10 at 12:40 am
not really, you see jewish banking is something you already have, its that market where you have huge intrest and usery where people are ripped of and greater unfair prevails. budhists dont revel in money and finance,muslims however do and are quite ethical about it
they dont believe in making money on other peoples expense and so therefore incorouage fairness and trust. no intrest is involved so that means a win win situation for both parties in the transaction
thats why its so popular
RedSeaCoral
7 Feb 10 at 12:55 am
hhhhhhhhhhhhh
there will be nothing but Islam
ONLY ISLAM CAN DO IT
sherifhab
7 Feb 10 at 12:56 am
what the fuck?what next christian , buddhist , hindu , jewish banks anyone?
oratorspeaker
7 Feb 10 at 1:49 am
If that were the case, then Shariah law would have allowed muslims to charge non muslims interest but would not charge muslim borrowers any. Thats the point though, it doesnt. Islam doesnt allow for a Muslim to take or give interest to a Muslim or a non Muslim.
marwahmahmod
7 Feb 10 at 2:47 am