‘Don’t let the name scare you. Islamic banking is beneficial for all'

"People should know that the name Islamic Banking is used just to give an impression that it works on the Islamic principles. Otherwise, it is an open option and everyone whether Muslim or not can take the benefit", says Maulana Abdul Hadi Madani, Editor Sirat-e-Mustaqeem, Birmingham and Member Islamic Shariah Council, Britain. Maulana Abdul Hadi Madani was speaking to ummid.com while he was in Malegaon to inaugurate the new building of Kulliyah Aisha Siddiqua for girls at Mansoora. In this exclusive interview for ummid.com readers, he described in details about Islamic Banking, potential the system has today and its possibilities in India and other parts of the world. Excerpts:

How do you think Islamic Banking is capable of combating the economic slowdown?

We can never have a better rule or way of life than the one framed by the Almighty Allah. For, He is the Creator who created everything. He knows what is good for us and what is not. Through His messengers, hence, He sent guidelines for a better life. Islamic finance is also one of them. This is why people who adopted Islamic Banking System are not only safe from recession but they are also flourishing and earning profits. That too in a very high volume!

Encouraged by the results, other international banks like HSBC and Barclay have also introduced special windows. These windows have facilities for the people interested in dealing on the principles of Islamic Shariah. Likewise is the Islamic Bank of Britain. The very concept of these banks is that they are following the Islamic principles, solely and in total, which is continuously monitored by the boards of Ulema that keep an eye on each and every thing.

However, the system is working to the perfection. British Prime Minister Gordon Brown, who was the Finance Minister when Islamic Banking was introduced in UK, was so confident of the system that he predicted, London would prove a gateway for Islamic Banking. The results today are proving his predictions right. This is why at the time when other banks are facing closure, the Islamic Bank of Britain is opening branches at different places in UK and also receiving similar requests from Europe that has never believed the system.

Do you think Islamic Bank is suitable for India also?

Certainly! I believe this is the best available option not only to fight the economic slowdown but also for goof earning. The records at different places where Islamic Banking is operational justify my belief.

India has its own problems. Like, it cannot adopt the system unless some amendments are brought in its rules. How can you suggest India to have Islamic banks under this situation?

This is not the case only with India. Everywhere, whether it is UK or Sudan or any other country, the respective governments had to bring changes in their rules to accommodate the Islamic Banking System. If the British Government can make changes in its rules for a better available option, why can’t the Indian Government? That too, when India says it is a democratic country and it has in its constitution provisions that guarantee everyone's rights. If the Muslim community wants to have a banking system suiting their religious principles, the Indian government should not have any problem.

Then why the Indian Government is reluctant?

The fact is that the Islamic Banking System has the potential to overpower the existing banking institutions. This is what exactly happened in Sudan. Before the introduction of Islamic Banking in Sudan, it was thought it would not work in the country. However, very soon Islamic banks in Sudan overshadowed the high-street banks. I think, some people in the Indian Government who might be having some stakes in the existing banks are going through the same dilemma.

Is this because of the name ‘Islamic Banking’ also that the government is reluctant?

I cannot say exactly. But people should know that the name Islamic Banking is used just to give an impression that it works on the Islamic principles. Otherwise, it is an open option and everyone whether Muslim or not can take the benefit. Islamic Bank of Britain and HSBC Al Amanah Products are the best examples. These banks do not look at the religious identity of the customers. Whoever follow their regular norms, the banks are ready to offer them their services.

Does it mean India needs an awareness campaign to make people realise these facts?

Yes, not only among non-Muslims but also among Muslims. For, there are many Muslims who consider Islamic Banks as charity like organizations to exploit in whatever form they would intend to. Such people should be taught that this is a banking system and the basic difference with other banks is that its fundamentals are based on Islamic principles. People should be explained about the advantages of the Islamic Banking and the potential it has to fight any economic challenges. Once people become aware, I don’t see any reason why they would not adopt it. The Gulf countries and the countries like UK, Indonesia, Malaysia and Sudan are live examples.

If the system has so much potential, why it is taking time to become common?

Islamic Banking is still emerging and it needs some more time before it becomes common. Moreover, since its basis is totally free from interest, the existing bankers who completely depend on interest for their survival are afraid. For them, removing interest means endangering their entire setup. Hence, they are creating hurdles for Islamic banking. Although it is a better option.

But, the biggest challenge to the Islamic banking is the attitude of some of the Islamic countries. They are averse to adopting Islamic Banking merely because it does not suite their selfish goals. The manner with which educated and financially strong Muslims are treating Islamic Banking is equally strange. Islamic Banking at this stage needs active participation of such people. However, despite having resources in plenty they are not ready to realise the importance of interest-free banking.

It is also said that there is a dearth of manpower and trained personnel in India to handle Islamic Banking?

It is a fact that we are short of people who are masters simultaneously in Islamic and modern economic systems. But this problem exists everywhere, whether it is Britain or any other country. It is because, the system is new and has not become common so far. Hence people are reluctant to choose it as a career. But, in countries like Britain where the system is running successfully, universities are offering specialization and research opportunities in the subject. Ironically, contrary to a very large number of non-Muslims in UK who are doing Masters and Research in Islamic Banking, number of Muslims are very low.
 

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