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Business & Finance

Riba-free banking: need stressed for redressal of people's reservations

After 18 years of long struggle, the share of 'Riba free Islamic banking' as compared to traditional banks is only 14 percent which is a matter of concern for a country having Muslims population of 97 percent.
Published October 26, 2019
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After 18 years of long struggle, the share of 'Riba free Islamic banking' as compared to traditional banks is only 14 percent which is a matter of concern for a country having Muslims population of 97 percent.

Addressing an awareness session in Faisalabad Chamber of Commerce & Industry (FCCI) on "Islamic Banking" Najam-Ul-Hassan advisor Meezan Bank told that people still have reservations about Riba free banking which must be redressed for the promotion of Islamic banking.

He told that Islamic banking is not a new system; it was practiced 14 years ago in line with the principles of Quran and Sunnah. "This system remained intact as long as Muslims ruled the world around 800 years and it diminish when Muslims were made slaves", he told and added that Islamic banking is once again being revived and it is duty of each and every Muslim particularly businessmen to accept and practice it is divine mandate.

Comparing Islamic bank with traditional interest based economy; he said that in traditional banking, people's savings could be doled out for any profitable business entity without considering its nature. But in Islamic banking, this is linked with only Halal businesses which have no ill impact on the society. Quoting example of an American state, he told that crimes shot up when banks sanctioned loans for the industries of wine, cigarettes and pornography etc. "No Islamic bank could make such deals" he added.

He also mentioned various financial crises at the global level and told that in 2008-09 banks provided maximum loans. When these loans were not repaid, the banks had to suffer a huge loss of 50 trillion dollars. He pointed out that yet another crisis is brewing up as in seven non Muslim countries, the interest rate has become negative. He said that only solution to avoid such repeated crisis is to switch over to Islamic banking which is actually asset based.

Continuing, he mentioned the invention of printing press and said that this newly invented machine was installed in almost all countries excluding Muslim world as Ottoman Empire had declared it un-Islamic and hence, Muslims failed to spread their rich knowledge to the coming generations. On the other hand, in west during this period more than 6.5 million books were published which catalyzed knowledge based revolutions. He said that we must adopt new changes for our own advantages instead of rejecting the same in the name of Islam. He said that Meezan Bank has started digital banking while many other online products have also been introduced to compete with the traditional banks. He said that Islamic Banks are bound to facilitate only Sharia compliant businesses.

He challenged audience to point out any un-Islamic product of Meezan Bank and he will right now announce to withdraw it.

"However, it is not justified to discourage or criticize Islamic Bank without any cogent reason", he added. Responding to yet another question he said that a powerful Islamic block is directly linked with strong economy for which Islamic Bank are prerequisite.

Mauzzam Saeed Regional Manager Meezan Bank told that his bank is trying its optimum best to increase share of Islamic banking from 14 to 20%. He told that commercial Islamic Banking system was started in Pakistan in 2002 and Meezan bank was pioneer in this field. It has now become seventh biggest bank of Pakistan with 700 branches in 300 cities. He told that Meezan Bank is operating current saving, term deposit and foreign currency accounts in addition to Mudaraba and Musharaka.

Copyright Business Recorder, 2019

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