H Abdur Raqeeb throws light on the Personality, Principles and Performance of Dr. Mohammad Nejatullah Siddiqi and acknowledges how the latter provided guidance and support for the Indian Centre for Islamic Finance (ICIF) right from its inception in 2008 until his death on November 11, 2022.
Dr. Nejatullah Siddiqi believed that realising Islamic values such as Social Justice, Equity and Compassion in modern society necessitates a creative and imaginative exercise in social innovation. He was concerned with the conceptual and foundational issues that make the Islamic Finance and Banking industry meaningful and influential. But, with a critical mind, he used to raise questions about the industry’s practices, and he was one of the first economists to try to demonstrate Tawarruq’s negative impact.
Dr. Siddiqi received the King Faisal International Prize in 1982 for his essay on The Current Economic Crisis and Challenges in the Light of Islam.
Upon receiving the award, he stated: “Islamic worldview and values will serve as the cornerstone for contemporary real economy, enabling humanity to plan for a brighter future and ensuring that Muslim community has a dignified place among other nations.”
Further he challenged the prevailing notion that poverty is a divine blessing and that Islam has little to do with physical resources, as Muslims should care more for the life hereafter. Instead, he argued that material resources are open for all who explore the universe. Inequality and injustice will prevail if the world ignores rules based on divine principles. He rejected the notion that material world belongs to others and the world to come is for Muslims.
Writing the preface to the book titled – Five Pillars of Prosperity: Essentials of Faith-based Wealth Building by US based Wealth Management expert Yaqub Mirza, he summarised five steps for Prosperity: EARN, SAVE, INVEST, SPEND and GIVE.
In a letter to Dr. Nejatullah Siddiqi, Maulana Maududi requested him to write an article in which, without mentioning Islam, it should be demonstrated how financial systems might be built in a better and more advantageous way than the current interest-based banking system. (Islam, Ma’shiyat aur Adab, p. 42)
He exhorted us to adopt the following five strategic adjustments in regard to the future of Islamic Economics:
- The family, rather than the market, serves as the starting point for economic analysis.
- Cooperation is becoming more important in the economy, supplementing competition.
- Debts play a secondary rather than dominant role in financial markets.
- Interest and interest-bearing instruments do not play a role in money creation or monetary management.
- In Islamic jurisprudence, maqasid-based reasoning has supplanted analogical reasoning.
When the United States and the rest of the world were engulfed in a financial tsunami, following the subprime mortgage crisis, countries around the world began to take steps to mitigate its negative effects. The Government of India also formed a high-level committee led by Dr. Raghuram Rajan and asked the Reserve Bank of India to explore the possibility of introducing Islamic banking instruments into the Indian banking system led by Anand Sinha, then the RBI’s Executive Director. This RBI issued a detailed report demonstrating the distinguish principles and practices of Islamic Banking in comparison to conventional banking. The report is well worth reading for all of us.
In 2006, Dr. Rahmatullah, a few others and myself held a consultative committee meet at Islam Gymkhana, Mumbai to develop a roadmap for interest-free banking. Mufti Barkatullah, Shariah Adviser, Islamic Bank of England, and Mohamed Talha representing Qatar International Islamic Bank attended the meeting in Mumbai. Dr. Fazlur Rahman Faridi joined the meeting from Aligarh.
Dr. Nejatullah Siddiqi, who was on his way to Malaysia, stopped in Mumbai and joined the deliberations, preparing a future action plan that led to the formation of the Indian Centre for Islamic Finance-ICIF in 2008, and Dr. Siddiqi provided guidance and support from its inception until his death recently.
Dr. Subramanian Swamy challenged the State Government of Kerala’s launch of a Shari’ah-based NBFC (Non-Banking Financial Company) named Al Barakah, which was later renamed Cheraman Financial Company, in the High Court of Kerala in 2010. Dr. Nejatullah Siddiqi undertook a week-long tour of the state of Kerala to create a positive and favourable awareness among people that Islamic Banking is not Muslim-specific but meant for all and particularly the marginalised section of society. During his tour of Kerala, he visited educational institutes such as Jamia Al Islamia and Hira Centre to interact with the leadership of the Islamic movement, and more importantly he met and discussed with important state’s stakeholders such as Justice Krishna Iyer, creating a conducive and positive image of Islamic Banking while Dr Swamy’s case was creating ripples toward a misleading and negative image.
Dr. Nejatullah Siddiqi urged Muslims to focus on business and entrepreneurship, as well as women empowerment, citing Hazrat Khadija, the Prophet’s wife, as an example. He also urged Muslims to institutionalise the Zakat system in order to create a caring and sharing society. He also emphasised the proper use of existing Awqaf properties.
Dr. Siddiqi was a champion of the marginalised and poor, and he worked hard to find creative ways for them to participate in economic activity. When cooperatives in both states and multi-states offered such an option, he developed one such model:
“A cooperative Credit Society is formed by its members for pooling their funds, managing their liquidity requirements and creating loanable funds therefrom addressing their demands from time to time, mutually sharing the operational cost and owning the benefit and risk of operation.”
When Rahman Khan expressed interest in establishing a Haj mutual fund similar to Malaysia’s Tabung Haji, he met with Dr Ahmed Mohamed Ali, former Chairman of Islamic Development Bank, who supported the scheme, but it did not materialise.
To learn more about the life and legacy of Dr. Nejatullah Siddiqi, read his article titled: My Life in Islamic Economics, which was published in Critical Muslim (July-Sept 2015).
His book in Urdu: Islam, Ma’shiyat aur Adab is a must-read for anyone interested in the versatile and varied field in which Dr Nejatullah was involved throughout his life, which, in my opinion, no one in this era has undertaken!
Dialogue in Islamic Economics: A Collection of Dr. Siddiqi’s English Letters, published by the Islamic Foundation UK, is well worth reading.
For those who want to read and think about Islamic Economics, there are two volumes of Encyclopaedia of Islamic Economics edited by Dr. Nejatullah Siddiqi, Dr. Abdelhamid Brahimi, and Dr. Khurshid Ahmad.
Lastly, let’s pray that the Almighty will richly reward Dr. Nejatullah Siddiqi and provide a suitable replacement to carry on his legacy, and let’s resolve to realise his dream of an ethical economic and banking system based on justice and equity in our country and around the world.
[The writer is General Secretary, Indian Centre for Islamic Finance (ICIF), New Delhi. Email: [email protected]]