Talking to LCCI Senior Vice President Almas Hyder here, he said that bankers should launch new schemes to attract people towards Islamic Banking, asserting that though Islamic Mode of banking looks like conventional banking but there is a lot of difference between the processes. Lahore Chamber of Commerce and Industry SVP Almas Hyder said that today more than 250 Islamic financial institutions are operating worldwide from China to the USA.
Western banks through their Islamic units in UK, Germany, Switzerland, Luxembourg etc. also practicing Islamic banking.
He said the basic principle of Islamic banking is the prohibition of Riba or interest, which has seldom been recognized as applicable beyond the Islamic world but many of its guiding principles have consciously or unconsciously been accepted.
The majority of these principles are based on simple morality and common sense, which form the bases of many religions including Islam, he maintained. Almas Hyder said that Islamic finance was practiced mostly in the Muslim world throughout the Middle Ages facilitating trade and business activities.
In Spain and Baltic States, Islamic merchants became indispensable middlemen for trading activities.
It is claimed that European financers and businessmen later adopted many concepts, techniques and instruments of Islamic finance. He said that the Islamic financial system employs the concept of participation in the enterprise, utilizing the funds at risk on a profit and loss sharing basis.
This by no means implies that investments with financial institutions are necessarily speculative.
This can be excluded by careful investment policy, diversification of risk and prudent management by Islamic financial institutions.
The LCCI Senior Vice President suggested that the Islamic countries that had undergone the experience of Islamic banking should be consulted so that the existing level of services could be improved and more diversified products be introduced.