|
Malegaon:
A professional researcher on India-centric socio economic and
political databases Shafeeq Rahman while stating that the core
system of the interest-free banking, widely termed as the Islamic
Banking System, is developed by economists of the Indian
subcontinent expressed surprise over the fact that the region has
gained nothing from it.
"The conceptual framework of Islamic
banking is mainly developed by the Islamic economists of the
Indian subcontinent; in particular, the complete non-interest
banking module was developed for the first time in 1969 by Nejatullah Siddiqi though the business of Islamic banking
flourished in West Asian countries, Iran, Malaysia and Indonesia",
Shafeeque Rahman wrote in a recent article published in Tehelka.
Mohammad Nejatullah Siddiqui is a
leading Indian Islamic scholar, whose specialisation is Islamic
Economics. Author of numerous books and a recipient of the King
Faisal Award for Islamic Studies, he has taught at the Aligarh
Muslim University (AMU) and the King Abdul Aziz University,
Jeddah. He was a Fellow at the University of California, Los
Angeles and Vesting Scholar at the Islamic Development Bank (IDB)
Jeddah.
Stating that Islamic Banking is now
fast spreading its wings to other parts of the world, Shafeeque
Rahman wrote, "The client network is now expanding beyond the
conventional Muslim countries to European and other non-Muslim
territories. In UK, it is estimated that $18.4 billion business
was done by the end of 2008. According to newest Global Islamic
Finance Report 2011, the Islamic finance industry is valued at
$1.14 trillion and is growing at a rate of 10 per cent. It was
worth a mere $150 billion in the mid-1990s."
"Apart from Islamic banks, mainstream banks and financial
institutions are opening Islamic product windows to woo Muslim
consumers. For instance, HSBC has HSBC Amanah for its Islamic
financial services. The governments of Iran, Pakistan and
Indonesia have officially adapted to Islamic policies to run their
banking and finance structure. And due to its cosmopolitan
society, Malaysia follows the parallel Islamic system alongside
conventional banking", he wrote.
Shafeeque Rahman further wrote,
"Banking without interest is a long term demand from Indian
Muslims that has not been fulfilled so far due to the existing
statutory and regulatory framework of Indian banking, which does
not allow such an alternate system. Besides interest, a key point
of contradiction is that conventional banks in India facilitate
only intermediary services while banks have to be involved in
trading and business activities in the Islamic banking system.
Indian Muslims have seen several unsuccessful experiments in the
unorganised sector and through the registration of NBFCS and
cooperatives but the lack of government regulatory supervision has
led to the failure of major interest-free banking initiatives."
"The non-availability of an interest-free banking option has
distanced many Muslims from banking products and services. The
Reserve Bank of India (RBI) data report for March 2010 indicates
that banking participation in Muslim- concentrated districts is
below the national average. They lack in banking access,
infrastructure availability and low credit-deposit (CD) ratio", he
wrote.
Islamic Banking believed to be an
interest-free, participatory and ethical banking system, has been
an emerging global paradigm of the banking system since the last
quarter of the twentieth century. The essential feature of Islamic
banking is the prohibition of taking and giving of interest in all
form of banking and financial transaction. In place of an assured
return on loan amount by the interest rate in the conventional
banking system, the Islamic form of financing advocates the
profit-loss sharing module. Taking a risk is the only provision
that entitles one to profit, if there is no risk of loss then
there is no assurance of profit to the depositor or the financer.
|
Comments
|
Quick links