Malegaon: The existing banking system which is based on interest is disastrous and the main reason why economies are trembling and inflation, noted Muslim cleric Khalilur Rahman Sajjad Nomani said Wednesday while addressing the powerloom weavers and industrialists. Cautioning them about the danger of the system, he urged them to look for more practical and viable alternate.
"Interest is forbidden in Islam because it is disastrous and killing for the economy, and deadly especially for the poor. Refrain from using it before it pushes you to an imminent and certain catastrophe", he urged hundreds of industrialists who mostly belonged to local textile industry.
The textile industry in Malegaon is going through a worst kind of slowdown nowadays. Devoid of sufficient funds, the weavers are forced to borrow money on heavy interest rates from local moneylenders.
"It doesn't mean that Islam wants to keep you poor and poverty stricken. It wants you to flourish economically, and in every way. It wants it through inclusive growth. It believes in balanced wealth distribution. This is why it bans interest and encourages partnership", he said.
He said that through this Islamic principal of partnership, people will be benefited more and the investor will get more returns on the investment.
"As against this, the banks charge interest and the borrowers include this interest amount in the cost of production. This gives rise to inflation and the market is burdened", he said.
Giving examples of few countries he said industrialists multiplied their net profit when they adopted the Islamic principal of partnership, and the result was astonishing for economists.
He said the interest based system is the main reason why world economies especially of the United States and Europe trembled and is still facing slowdown. He said economists in the US and Europe are now realizing the main demerit of the system and are adopting interest-free banking system.
"Scholars working on Islamic Banking & Finance are receiving calls from different parts of the world. They want to shun interest based system. They want to give an alternate to their people, even if it is in the form of a window in their banks", he said.
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