Islamic Economy the Pacemaker for Recession-hit World

Mumbai: In India there is ample scope for the launching of Islamic banking as an alternative system that is not affected by the recession.

These were the views of Mufti Barkatullah Qasmi, Shariah Supervisor at Islamic Bank Britain and Judge at the Islamic Shariah Council, London who has come especially from the UK to offer advice to financial institutions in India on Sharia complaint banking. He was speaking at a conference on “Islamic Banking in the Light of the Qur’an and Sunnah” at Markazul Ma’arif Education and Research Centre (MMERC), Mumbai, recently.

He revealed that the different kind of application forms now used in the world were first mentioned in the Qur’an over 1400 years ago. These were mentioned in the surah Al-Baqra and

‘it was enjoined upon Muslims to write down whenever they made a transaction’.

He said that the present conditions were favourable for introducing Islamic banking institutions in India. Interest-free banking was a worldwide trend with over 500 Islamic banking institutions and 400 Islamic funds operating in nearly 70 countries, and realizing the feasibility and the profit-and-loss-sharing of such institutions it was time that they started operating in India too.

Ethical financing has come to the fore in the current recession. On all the three levels of customer, manager and investor, Muslims are taking part in Islamic interest-free banking.

The unique features of such institutions shield them from the effects of the recession and some of them have outperformed the equities listed at the bourses. Some aspects in the modern economy are kept secret and the giving or taking of interest has been termed as oppression in Islam, he said. As opposed to this, the Islamic system of economy offers complete transparency, agreement between the parties, ethical dealing, satisfaction with the business engagement and complete clarity on the issues involved.

Sometimes the customer is asked to sign some forms but the complete details are not revealed to him as in insurance dealings. Quoting the Qur’an, Mufti Barkatullah said that when someone makes a deal Allah himself overlooks the deal and is a party to it. His presence remains until the deals are based on transparency, trust and justice; the moment one of them tries to cheat or lie or use subterfuge, Allah disassociates himself from it. When in business transactions, cheating, lying and cunning is used, then the baraka is leached out of it and the business becomes inauspicious.

This concept of sharing in profit and loss is used in Islamic institutions. Simple deals are encouraged in Islamic. Deals should be open and transparent and they should not be too sophisticated. These give growth, stability and long life to the economy and do away with volatility.

Whichever business causes harm to the environment or is engaged in taking or giving interest or alcohol is frowned upon in Islam.

Takafful insurance has taken root in some Gulf countries. Islam is not against insurance as such but only against the wrong means adopted to secure it.

Talking about investing in the share market, he said Islam does not allow short selling. This is trying to make a deal when the actual goods are not with you. After the financial crisis some countries have banned short selling which goes to show that Islam’s golden principles are favourable for business transactions and the world is slowly coming to realize their importance and necessity.

conference on modern economy in the light of quran

In those countries where Islamic interest-free banking is in operation, not only Muslims but other businessmen and customers constitute 40 per cent of the clientele.

Islam focuses on justice and transparency. According to Islamic fiqh, there should be an equal partnership in loss or gain, while dealing with interest in any situation is oppression. It is unjust to say to someone whom you are lending money that whether he earns a profit or not he has to pay a fixed return in the form of interest.

In India also the doors are slowly opening for Islamic banking and there are efforts being made in this direction but real success will come to us only when we try and work together to achieve our goals.

Islamic finance would not only give a general fillip to economy but on the secondary level Muslims also stand to benefit. Some foreign firms have invested about Rs 600 crore in the new airport coming up near Panvel, Mumbai on the basis of an equal share in profit and loss, which goes to show that Islamic banking concepts are slowly making their presence felt in India.

The other main speaker on the occasion was Mr Gaffar Shaikh, Managing Director of the Maulana Azad Minorities Financial Development Corporation. He dwelt on the abysmal economic condition of the Muslims and gave examples to show that the community was engaged in petty businesses and was far behind the other communities who are progressing from small cap to mid-cap industries and from SEEPZ to Special Economic Zones.

Lamenting the fact that most Muslims are engaged in small businesses such as construction, machine repairing and tobacco manufacturing, there is a need for them to go for bigger businesses.

There are only two respectable options open to us; either go for large businesses or go for government jobs. On both fronts our condition is very poor. Muslim representation in government jobs ranges from 2 to 4 per cent. Hence on both counts the community has failed.

The causes for these failure is within the community itself and cannot be laid at the door of the government alone, he emphasized.

He lamented the lack of knowledge in the Muslims community about both central and state welfare schemes for the minorities and those living below the poverty line. He said according to government figures about 30 per cent of Muslims live below the poverty line. But due to various reasons they are unable to take advantage of government schemes meant for the poor.

He tried to disprove the misunderstandings prevalent among the Muslims that the government is not doing anything for them. Muslims are first in the open or general category but they do not avail themselves of the opportunities offered by government welfare schemes, he complained, on the other hand, other communities are quick to seize upon such opportunities, he said.

Furthermore, he said that Muslims do not even take note of those schemes meant primarily for the Muslim community or for adivasis or OBCs. This is mainly not only because of a lack of awareness but also because Muslims are not so interested about them.

He said that the way of routing welfare schemes for the poor has changed dramatically in the last 25 years. Now most international schemes, central schemes and state schemes are now routed through NGOs. The problem is that there are not many NGOs working exclusively for the Muslim community.

He called upon the community to take advantage of government schemes which are meant for the poor and the disadvantaged.

Maulana Burhanuddin Qasmi, director of MMERC, gave a brief introduction of the two main speakers of the programme. He said that this was the second in a series of programmes to engage the community on the importance of the economy. Participation in the growth of the economy would definitely contribute to the success of Muslims, he said.

Maulana Shahid Moeen, Coordinator DAIE of MMERC, gave a brief overview of the beginnings of Markazul Ma’arif and the stellar contribution of Maulana Badruddin Ajmal and his family in many fields, not only in Assam, but in other parts of India.

Second Year student of MMERC, Muhammad Hanif Qasmi, gave a short speech on ‘Economic Challenges of Muslim Ummah’ where he briefed the ways to restructure the Muslim economy.

The programme which began with a recital of parts of the Qur’an from surah Jummah by Nizamuddin Qasmi, first year student, was ably compared by Maulana Mudassir Qasmi, lecturer of MMERC, Mumbai. Maulana Atiqur Rahman Qasmi gave the vote of thanks at the end of the programme which was presided over by Mufti Azizur Rahman Fatehpuri, grand Mufti of Maharashtra.