Macedonian Perspective : Conventional and Islamic Banking

Beskamatno Banking

 It is worth exploring the settings that are based on Islamic banking, and even Macedonian banks to begin to carry out activities based on these principles.  That did many large U.S., German and English banks.  The crisis that engulfed the western economies nastradaa at least those parts that functioned on the basis of these principles

 These days some media prostrui news that the University of Strasbourg will examine Islamic Finance intends to establish as conventional funding based on interest, as a central category in making any economic decision, contributed to the crisis phenomena in the world.  Faculty of Business Administration at the University of Southeast Europe in Tetovo in 2007 and 2008 was conducted similar research on the topic and found him in the mid 2008’s published book “SUKUK – Muslim free of interest bonds (Shukarov and others, 2008) .  That this study treats issues sherijatskoto and the conventional understanding of economic life.

 In general, common and conventional and Islamic finance is that the exchange is done based on the principle of equivalence.  The buyer and seller in exchange receive the same value.  Contrary is illogical.  Participants in the exchange are satisfied with what they received.  And the purchase of loans applied the same principles.  Only exchange with the use of credit, varies due neistovremenosta.  But even then must apply the principle of equivalent exchange.  The difference is just in time, and time no one owns.  It can not be exchanged, nor may acquires.  Could the same subject to different price applies only because the exchange is done at different times, hence the interest is in dispute.  Interest for delay in payment or agreed neistovremena exchange is the basis for the destruction of the basic concept of equivalence.  That is why it is immoral and forbidden in Islamic banking.  It was banned in the history of conventional banking.  Even Plato in his Laws “interest considered immoral for believing that it should be banned.  For the prohibition of interest in his book Politics, advocates and Aristotle, and he even managed by the Council in Nicaea in 325 BC, to bring prohibition to the priests charged interest on the loans they gave.

 The justification for the collection of interest is the attitude that he gives money to loan, temporarily, it deprives the opportunity to enjoy its wealth and it should receive compensation.  Credit, which is the justification for charging interest, is associated with time.  Conventional finance are fully supported on the temporal dimension of money.  Money is “value” that is changing with time.  That means no value.  The value is timeless category and does not depend on time.

 For these illogical facing conventional banking write many theorists in the western developed world.  The main dilemma that has emerged is based on all modern banking.  Specifically, banks in the world apply the principles of the so-called  frakciono deposits and currency, which means that loans and deposits while creating thus increasing the money mass in the economy and act to create disparity between the real and financial funds.  World financial crisis is the result of that disparity.  Today everyone is becoming clear that such disproporcionalnost is the result of greed and perpetuiranjeto the financial sector, and it was affecting the deposit currency based on probability and confidence inflatorna built with logic.

 Even the largest banks in the world would have collapsed like a tower of cards if most depositors would have requested their deposits in a short time interval.  Thus, banks must build “impression” of quality and thus produce “confidence” that are very strong, and thus eliminate “the likelihood” that will arise stronger pressure to withdraw deposits.  Once trust is lost then the banks failed, even to the best.  Next characteristic of conventional banking is the presence of risks.  Namely, banks grant loans (giving immediate financial potencija), and in return receive a “promise” that the loan will be repaid.  Promise to be realized in the future.  And know that the future is always unknown.  Nobody can predict the future movements or own a business, nor the status of national and world economy in the future.

 In Islamic finance based sherijatskata logic and eternal principles of morality and no opportunity for the emergence of inflatornata logic.  Apply the basic principles that: the transactions must be free of interest, any deal must be agreed in advance based on division of revenue, each loan must be covered property (property or services) for each transaction there must be izglednost conversion (to is not based on luck or speculation).  That is why they are banned deals are aimed at trade bogatstav of unethical or services (prostitution, weapons, drugs); earnings from temporal displacement of deals (interest) agreements based on the principle of debt, contracts where there is uncertainty about the realization, based on agreements on the principle of gambling, trading in all contracts that are based on debts with Discount;-Forward foreign exchange transactions.

 Notable is the presence of moral and ethical norms in the economy which led to escape the village as immoral, neetichno, eksploatatorsko, risky, neekvivalentno.  Contracts must not be fixed in a way that allows you to create debt to be namiruvaat in the future.  Even if such debts arise in complex litigation based law sherijatskoto debtor is released from the obligation and the creditor is deemed to have voluntarily resigned their property (no compensation) and any payment is voluntary.

 That’s why deals are strictly related to its real and financial component, which leaves no space for the emergence of any kind, and especially the financial crisis now shaking the world.  However, do not get the impression that Islamic finance impede development, they only operate in different conditions, which even do not differ much from conventional principles of operation.  A large part of the Islamic economists making great effort to find similarities in the Islamic finance and conventional way to persuade as many financial intermediaries to work with this specific type of securities.

 The principles are still very different.  For example, if someone wants to buy an apartment, and not enough money, addresses to some Islamic Bank to approve loans.  Bank approves the loan with money that does not put his deposit account and also create a query that will be realized in the future, but buy an apartment (the bank becomes the owner) that you repay the loan within the stipulated period, and the bank sees profit rent in the loan pay while living in the apartment and until repaid in full.  In the beginning the bank owns 100 percent, then more until completely failed to repay the apartment.  If you do not repay the agreed amount of his bank takes back your property.  This way of lending is very similar and different from the lease.  It is possible to require financial participation on a business deal (or mudarabah musharakah) or partnership when each depositor in advance knows his participation in the profits of the properties, but the potential loss and are similar to conventional B.O.T.  transactions (build-operate-transfer).  There are agreements with deferred (murabaha or hall) that are based on sherijatskite economic principles, and are very similar to conventional deals.

 It is worth exploring the settings that are based on Islamic banking, and even Macedonian banks to begin to perform actions based on these principles.  That did many large U.S., German and English banks.  The crisis that has engulfed the western economies nastradaa least those parts that functioned based on these principles.  Why not think about the opening of our financial institutions towards this kind of banking or why Macedonia is not based much of their investment plans on this, at present, extremely plentiful source of funds?

 Miroljub Shukarov (The author is a university professor)

Source : Google trld denivnik

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