One of the economists (who was also chairman of a state owned Bank) has demanded to eliminate the term “Islam” from Islami Banking System which I noticed in some of the newspapers published on 3 October, 2010. The economist added, “Everything running at present in the name of Islami Banking is nothing but deception.” The income derived from Islami Banking system is not free from interest. So far as I know the economist stands always against Islam. I haven’t ever heard from him anything in favour of Islam.
Islami Banking is not a new concept. The modern form of it emerged almost 60 years back, though the transactions like Mudaraba, Musharaka, Bai-Muajjal, Ijara, Istisna were introduced very early in the history of Islam. We all know that Islami Banks exist all over the world. It exists in almost all continents of the world such as Asia, America, Africa and so on. It is also known that international conventional banks have opened Islami Banking windows.
I can mention Gordon Brown, who was Finance Minister of Britain and later on became Prime Minister, expressing his wish to turn London into a hub of Islamic Bank. The Prime Minister of Singapore expressed his desire to turn his country into a Centre of Islamic Finance.
In this context I do not find any ground to accept the demand of the above mentioned economist as academic or fair. All the renowned scholars of Bangladesh are involved with Shari’ah Board of Islami Banks. The Ex-Khatib of National Mosque, Late Maulana Obaidul Hoque, current Khatib of National Mosque, Prof. Md. Salahuddin, famous scholar Maulana Kamal Uddin Jafri, Mufti Abdur Rahman, the renowned scholar of Bangladesh, Mufti Shamsuddin Zia and other Islamic thinkers are working in the Shari’ah Board of Islami Banks or in the Central Shari’ah Board of Banks.
I am a member of several Shari’ah Boards of Islamic Banks. These famous scholars think that Islami Banks operations are free from Interest. All of the branches of those banks are subject to Shari’ah Audit on regular basis. If any deviation is found by the audit from Shari’ah principles, the income generated from that investment is not kept as profit. Some banks spend such funds on poverty alleviation and welfare of the poor maintaining separate accounts. Some other banks spend it through their foundations for the welfare of the poor.
Further there is a supervisory Department of Central Bank dedicated to look into Shari’ah violation issues of Islami Banks. The officials of this Department trace out lapses if any and bring it to the notice of the concerned bank authority. The Islamic Banks are forced to follow the instructions of central bank meticulously.
It may be mentioned that Central Bank spent three years to develop Shari’ah guidelines in consultation with related Islamic Banks. A well explained guideline has been developed by the sincere effort of the Bank. The Central Shari’ah Board of Islami Banks extended all sorts of cooperation in formulating the same. All Islamic Banks follow that guideline meticulously. Central Banks will not allow any variation regarding it.
I feel that the concept of interest and profit is not clear to the economist mentioned earlier. In the age of ignorance (Jahiliya), the Arabian people deemed that there is no distinction between profit and interest. Allah, the Almighty declared that these two are not same. Allah said in the Qur’ān that trade is permissible while interest is prohibited. It is a matter of regret, that the economist has showed similar ignorance.
As chairman of a government bank, it is beyond his (that economist’s) jurisdiction to stop the initiative of opening 6 (Six) new Islamic windows of his bank. As an ex-secretary of the banking division, I request the Central Bank and Finance Ministry to look into the issue about his malicious attempt in this regard. There is no justification to drop the term ‘Islam’ from Islamic Banking System. Name cannot be changed for a few mistakes.
For instance, a country may be recognised as a democratic republic but there may be a lot of shortcomings in practising democratic values. For that reason we cannot demand to withdraw the term democracy from the name of the country.
So far as I know there is no fundamental flaw in Islamic Banking System of the world. While having no flaws in Islamic Banking, why then change the name?
Western Banking suffered after the world economic recession and economic meltdown. The Islamic Banks sustained it successfully, due to its inbuilt strength. Even the U.S. Treasury Division is now thinking to adopt principles of Islamic Banking.
In fine, I wish the people be aware of such ill-motivated propaganda of such pseudo-intellectuals.