Two years ago, in my book Chasing a Mirage, I had explained the unethical and unislamic nature of Sharia Banking. I am sharing this part of the book for all to read and understand the subject without reading it filtered through the rose-coloured prism of the liberal media that seems fascinated by the exotic nature of the claims.
Read and reflect.
Tarek
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Sharia Banking: An expose
Tarek Fatah
Excerpt from "Chasing a Mirage: The Tragic Illusion of an Islamic State
Family law is not the only place where the introduction of sharia law is being sought in Canada.
While Islamists may have suffered a setback in their attempt to
introduce sharia law in this country, they have not accepted defeat. In
fact, their plan is to introduce “sharia” in any form, wherever it would
gain acceptance as a legitimate part of the Western lexicon.
The recent attempt to obtain government validation and funding of sharia-based private Islamic schools in theprovince of Ontario
almost sneaked in, but for a public outcry. Sharia-compliant music,
sharia-sanctioned soccer, sharia-based health practice (in which
physicians refuse to treat patients of the opposite gender)—you name it
and the Islamists are trying to push some aspect of sharia into our
lives. However, the one area where their efforts are making the most
ground is in sharia banking, where they have the help of some extremely
powerful allies.
On one hand Islamists have made common cause with such figures of the left as London
Mayor Ken Livingstone and maverick British MP George Galloway,
denouncing capitalism as the source of all ill. However, a closer
examination suggests Islamists are also lining up with such icons of
global capitalism as Citibank NA, HSBC Holdings PLC, and Barclays PLC,
which have all endorsed sharia banking and started offering Islamic
financing products to a vulnerable Muslim population.
While sharia-style family law was
essentially promoted by imams and the mosque establishment, sharia-based
banking is being promoted by well-heeled Muslim bankers and investment
lawyers, who are driven not by teachings of the Prophet but the lure of
profits.
The Globe and Mail reported in May 2007:
“Several Canadian financial institutions are preparing sharia-compliant
mortgages, insurance, taxi licensing and investment funds to help serve
the country’s fastest-growing part of the population.” Promoting it of
course is a prominent Muslim corporate lawyer with close ties to
Canada’s Conservative Party, Walied Soliman. A lawyer at Ogilvy Renault
LLP, Soliman told The Globe, “I expect it [sharia banking] to
grow exponentially in Canada in the next couple of years.”
He confessed that the promotion of sharia banking has become a priority practice area for his firm.
This push from Muslim banking executives
working inside the corporate world has had some success. Most big
Canadian institutions are treading carefully, and not all are jumping on
board. The Globe reported that while the Royal Bank of Canada quietly
tested a sharia finance product a few years ago and didn’t find enough
market interest, other Canadian banks, smelling easy pickings, are
lining up to wear the Islamic mantle. Scotiabank and Toronto- Dominion
Bank have been quietly considering whether to start offering
sharia-compliant products as part of the big banks’ strategy to reach
out to a growing “immigrant population.” I doubt very much if Hindu,
Sikh, and Chinese “immigrant” Canadians are excited at the prospect of
halal banks.
The promoters of sharia banking are
Islamists, and their target is to control the Muslim population and
segregate them from the rest of the world, one bank account at a time.
With every mortgage signed, the family has to take ownership of sharia and disown the rest of society as the impure moneylenders.
While Scotiabank and TD officials were rubbing shoulders with two hundred delegates at a Toronto
Islamic Finance World conference in Toronto in summer 2007, Canada’s
Office of the Superintendent of Financial Institutions (OSFI), which
regulates financial institutions, said their staff was being pushed to
brush up on the fine points of sharia law to cope with the anticipated
expansion of Islamic financial services in Canada.
Normand Bergevin, managing director at
OSFI’s approvals and precedents division, told The Globe that several
people on his staff were learning about business plans, legal
structures, accounting methods, types of governance and other issues
related to Islamic finance. He told the newspaper: “It’s fairly new to
us.
There’s not a whole lot of experience here
in terms of supervising or even understanding the different types of
products. They all have little twists on them that make them very unlike
anything we’ve ever seen before.” Guess who is going to fill the knowledge gap and find jobs in high places of Canada’s financial watchdog?
While Canada’s banks salivate at this
supposed untapped niche market, one Muslim-owned financial institution
with strong marketing and social links to most Islamist events in Canada
has been doing a brisk business.
Omar Kalair, the chief executive officer of UM
Financial, has said demand for his group’s sharia-compliant products
has been so great that UM has stopped all marketing and has a
five-thousand-person waiting list of people who want to switch over from
conventional mortgages to ones that are sharia-compliant. Kalair
however admitted that from among the 200,000 Muslim households in
Canada, his target is the capture of 2.5 percent of this market, and
that too with the help of one of the big five banks.
Origins of Sharia Banking
Islamic banking traces its roots to the
1920s, but did not start until the late 1970s, and owes much of its
foundation to the Islamist doctrine of two people: Abul Ala Maudoodi of
the Jamaat-e-Islami in Pakistan and Hassan al-Banna of the Muslim Brotherhood in Egypt.
While these two pillars of the Pan-Islamist movement propagated jihad
and war against the West, they also recognized the role
international financial institutions could play in carrying out their
political objectives.
Since 1928, when it was created, the Muslim
Brotherhood has placed a high emphasis on the creation of a so-called
Islamic economic system. Banna and his successor Syed Qutb even laid
down principles of Islamic finance. Millard Burr and Robert Collins
in their bookAlms for Jihad claim that the
Muslim Brotherhood watched, waited, and learned the management of money
that was essential to finance a worldwide organization devoted to
spreading their Islamist ideology.
But the theory was only put into practice
once the US-backed Pakistani military dictator General Zia-ul-Haq
overthrew the government of Z.A. Bhutto and established sharia law in
Pakistan, forcing the country’s public-sector banks to run their
operations based on Islamic principles and without the role of interest.
The proponents of Sharia banking rest their
case on many verses of the Holy Quran, which in their interpretation
outlaw any business or personal financial transaction involving
interest. There is no unanimity among the Muslims who, in voting
with their feet and chequebooks, have overwhelmingly rejected banks that
operate in a supposedly interest-free environment. Most Muslims can see
through the fog of deception, but we are a billion strong worldwide,
and even if a small minority falls prey to the Islamist
propaganda, there is lots of money to be made.
Quranic verses that address the question of the role and the question of loans and debts include:
• Al Baqarah (2:275): “God hath permitted trade and forbidden usury.
Those who after receiving direction from their Lord, desist, shall be
pardoned for the past; their case is for God [to judge]; but those who
repeat [the offence] are companions of the Fire: They will abide
therein [forever].”
• Al Baqarah (2:276): “Allah does not bless usury, and He causes
charitable deeds to prosper, and Allah does not love any ungrateful
sinner.”
• Al Baqarah (2:278): “O you who believe! Be careful of (your duty to)
Allah and relinquish what remains [due] from usury, if you are
believers.”
• Al Baqarah (2:280): “If the debtor is in a difficulty, grant him
time Till it is easy for him to repay. But if ye remit it by way of
charity, that is best for you if ye only knew.”
• Al Nisa (4:161): “And their taking usury though indeed they were
forbidden it and their devouring the property of people falsely, and
We have prepared for the unbelievers from among them a painful
chastisement.”
• Ar Rum (30–39): “And whatever you lay out as usury, so that it may
increase in the property of men, it shall not increase with Allah; and
whatever you give in charity, desiring Allahs pleasure—it is these
[persons] that shall get manifold.”
From
these Quranic verses it is abundantly clear that the Quran
is addressing the rich money lenders to show compassion towards
the borrower and give him or her more time to pay back the loan. In
fact the Quran suggests to the lender that it would be far better if
the money lender forgave the loan altogether.
To suggest that the onus of complying with
sharia rests on the weaker borrower is obscene and against the spirit of
equity in Islam. I say this because what the imams and self-styled
scholars of sharia banking are proposing makes it easy for the wealthy
to be pious simply by not having to do anything, while the poor who need
to borrow are told to stay away from banks that lend.
Once more we see an example of Islam
attempting to bring justice to the poor while Islamists make it
difficult for the poor to access funds they don’t have. Today, owners of
Islamic banks are billionaires—the practitioners of sharia banking are
among the richest men in the world,* while the vast majority of Muslims
still struggle to eke out a living beyond one dollar a day. Sharia
banking fattens the bottom lines of the imams, the bank owners, and the
lawyers who pull out their best to Islamicize anything that sustains
their handsome hourly rate.
Every translation of the Quran into the
English language has rendered the Arabic word riba as “usury,” not
“interest,” yet Islamists have deliberately portrayed bank interest, the
cost of borrowing money, as usury. For Islamists, there should be a
cost to renting a car and renting a DVD, but when renting money for a
period of time, there should be no cost of this capital. Instead,
Islamists have created exotic products with names that are foreign to
much of the world’s Muslim population
This is where interest can be masked under the niqaab of Mudraba, Musharaka, Murabaha, and Ijara.†
Whereas interest is the charge for the
privilege of borrowing money, typically expressed as an annual
percentage rate, usury is the practice of lending money and charging the
borrower interest, especially at an exorbitant or illegally high rate.
Two senior Muslim banking
experts-turned-authors have written scathing critiques of sharia
banking: Muhammad Saleem has labelled the practice as nothing more than
deception, while Timur Kuran has suggested that the entire exercise was
“a convenient pretext for advancing broad Islamic objectives and for
lining the pockets of religious officials.”
Why Canadian banks would contribute to this masquerade is a question for ordinary Canadians to ask.
Muhammad Saleem is former president and CEO of Park Avenue Bank in New York. Before that he was a senior banker with Bankers Trust, where among other responsibilities he headed the Middle East division and
served as adviser to a prominent Islamic bank based in Bahrain.
In his book Islamic Banking: A $300 Billion Deception,
Saleem not only dismisses the founding premise of Sharia and Islamic
Banking, but says: “Islamic banks do not practise what they preach: they
all charge interest, but disguised in Islamic garb. Thus they engage in
deceptive and dishonest banking practices.”
He writes:
“Proponents of Islamic banking say that Islam bans all interest. But an understanding of pre-Islamic and Islamic history and keeping in mind the context would lead one to conclude that what the Quran bans is usury, not interest. Usury can be defined as interest above the legal or socially acceptable rate. Phrased differently, usury is the exploitative, exorbitant interest rate.”
Islam’s essence is its quest for equality
and social justice. Muhammad Saleem says that any banking or economic
system that purports to be “Islamic”—including the current crop of
Islamic banks—should answer two questions: By supposedly staying away
from interest and sharing risks with their clients, were they able to
help make the economic system more just, fair and equitable, and honest?
While Saleem goes to great lengths in
exposing the intellectual dishonesty surrounding the marketing of
sharia-compliant banking, Professor Timur Kuran, who taught Islamic
Thought at the University of Southern California, mocks the very idea.
Secondly, were these banks able to promote
economic development in the Muslim world? In the words of Saleem:
“Sadly, the answer is a resounding no. There is absolutely no evidence
that the Islamic banks have made any contribution in either of these two
areas.”
The fact is that China and India,
two countries that have had some measure of success in alleviating
poverty and enhancing development, have outpaced all the Muslim
countries put together despite their enormous natural resources and
strategic locations. Sharia banking may not have alleviated poverty or
generated economic development, but it has been a boon to the mullah
class on one hand and, on the other, to the yuppie Muslim bankers and
investment lawyers who have created a niche for themselves at the
expense of the larger Muslim masses.
Saleem, who saw the functioning of Islamic banking from the inside, writes:
“In promoting the establishment of Islamic banking, the Sharia scholars have played a critical role. Lacking any knowledge of banking, economics and for many even Islamic history, in interpreting riba, they have confused interest with usury. . . . Secondly, as Sharia advisers to Islamic banks, they have blessed many transactions as Islamic—meaning non-interest bearing—when in fact they are clearly charging interest, but interest payments are masked.”
Dozens of Islamic scholars and imams now
serve on sharia boards of the banking industry. If Canada’s TD Bank,
BMO, and RBC join the league, it will be interesting to see how the
ultra-left Trotskyite allies of the Islamists view their partners
hobnobbing with the bankers atop Toronto’s TD Tower.
Moreover, a new industry of Islamic banking
conferences and forums has emerged, permitting hundreds of sharia
scholars to mix and mingle with bankers and economists at financial
centres around the globe. In the words of Saleem, who attended many such
meetings, they gather “to hear each other praise each other for all the
innovations they are making.”
The Toronto
conference promoting sharia banking and Islamic investments was part of
this worldwide touring circuit that allows banks to keep the sharia
scholars pampered and well looked after. There are at least five
international conferences every year and these have been going on
annually for the past twenty-five years. Saleem estimates that the cost
of each conference exceeds $2 million and so far more than $200 million
has been spent just keeping the sharia banking circuit alive.
He cites one example of how sharia scholars
only care for the money they get from banks, and are willing to
rubber-stamp any deal where interest is masked. Saleem describes one
such incident as “comical”:
"I have first hand seen comical cases where the sharia scholar of an Islamic bank only spoke Arabic, but a lending officer only spoke English and Urdu. A particular financing transaction was structured in English with such terms as x% over LIBOR.** So we had an interpreter who would translate from English to Arabic, explaining this convoluted transaction to the Sharia advisor. It was at times painful and other times comical to watch the proposal being presented to this religious scholar for his blessings to ensure that it was consistent with the principles of sharia. The “sharia scholar,” elderly and partly deaf, had little experience in modern banking and finance. However, mindful of the fact that the bank was paying him a generous retainer, he gave his blessing to the deal, after being fully made aware that the bank wanted to do this deal, even though from the look on his face it was obvious that he could not tell the difference between a trade deal and a leveraged buyout transaction.
In the name of Islam, what amounts to
deception and dishonesty are being practised while ordinary Muslims are
being made to feel that their interaction with mainstream banks is
un-Islamic and sinful. As the Muslim banker asked: “Through various
devices—mostly cosmetic—[Islamic] banks end up with virtually no risk.
If Islamic banks label their hamburger, a Mecca Burger, as long as it still has the same ingredients as a McDonald’s burger, is it really any different in substance?”
Muhammad Saleem laments the fact that few
people are exposing the deception of this exercise in the name of Islam.
“We should be able to point out the failures and shortcomings of
Islamic banking and economics without being accused of being
anti-Islamic,” he says. Perhaps Scotiabank, the RBC, BMO, and the Office
of the Superintendent of Financial Institutions will pay heed to this
former banker’s words of caution.
The sharia-banking charade is a sad
indictment of the Muslim community. Islamic banking is not some
resurrection from a golden period—it is a 20th- century creation that
flies in the face of reason, logic, and the spirit of Islam, yet is
being thrust on us for no fault of ours.
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* “The reason [why they are so wealthy] was a two-page report on the wealth of 15 ruling dynasties, seven of which are Arab,” Refaat
Jaafar, managing editor of Dubai- based Forbes Arabia, told Reuters. In October 2007, Forbes Magazine reported on the wealth of 15 ruling dynasties, seven of which are Muslim. Saudi Arabia banned the issue after it ranked Saudi King Abdullah third, behind the rulers of Brunei and the United Arab Emirates.
† Arabic names given to various banking products.
** LIBOR is the London Interbank Offered Rate, much like the US Federal
Bank rate or the Bank of Canada rate.
source : mukto-monadotcom
