Muslim clerics launch Islamic investment advisory board, pitch for Islamic banking

New Delhi: India’s eminent Islamic clerics today pitched for introduction of Islamic banking and financial system in the country while opening to the public the Islamic Investment & Finance Board, an advisory committee headed by clerics to assist both corporations and markets as well as common people regarding Shariat-compliant investment and finance.

“Islamic Finance and Ethical investments are gradually evolving into one of the most important asset classes in the financial services industry in the world today. This is seen as an alternate to the failure of conventional financial system to achieve the higher objective of bringing economic justice. Another driving force for this phenomenon is the sheer size of the Indian Muslim population who are looking for alternate interest free financial system,” said Mufti Mohd. Yahya Qasmi, Member, Islamic Investment & Finance Board (IIFB), at the national conference titled “A Search for an Alternate Financial System” at India Islamic Cultural Centre in the National Capital today.

Building on the strong fundamentals and importance of the alternative investment & finance, Islamic Investment & Finance Board was evolved under the leadership of Maulana Mohammad Wali Rahmani, Sajjada Nasheen, Khanqah Munger and Secretary of All India Muslim Personal Law Board, said Mufti Qasmi while introducing the IIFB and opening the conference.

The primary responsibility of the board is to ensure that all the Islamic Financial products made are Shariah compliant as an alternate means. The work of IIFB will be supervisory to guide and advise the financial corporation regarding Islamic investment and finance including Islamic Banking. The board upon going through the Shariah validity of financial products presented by financial corporation would certify the financial products after a thorough examination according to the Shariah compliant criteria. The IIFB Board shall have continuous dialogue with economist, bankers and other scholars to assess the feasibility of new proposals and assisting in project development and execution of new financial products in compliance with Shariah Principles. IIFB also makes sure that the work of an organization is Compatible with Shariah rules according to the accredited and agreed legal opinions (Fatwa), Mufti Yahya said.

The IIFB comprises prominent Ulama such as Maulana Khalid Saifullah Rahmani, General Secretary of Islamic Fiqh Academy- India, Maulana Fuzail ur Rahman Hilal Usmani Panjab, Maulana Fuzlur Raheem Mujeddi Jaipur, Mufti Shoibullah Khan- Bangalore, Mufti Ahmad Nadir Al-Qasmi, Mufti Ajaz Arshad Qasmi, Mufti Riyaz Ahmad Qasmi Munger, Mufti Anwarul Haque Qasmi, Mufti Mohd Yahya Qasmi and Market Expert Imtiaz Merchant.

Addressing the gathering Maulana Khalid Saifullah Rahmani said interest is prohibited not only in Islam but also in Christianity and Hinduism. Islamic banking system which will be free from interest will have little risk for the common people. He said that to fix benefit and dividend and to not accept the risk of loss is unnatural.

H Abdur Raqeeb, Convener, National Committee on Islamic Banking and General Secretary, Indian Centre for Islamic Finance demanded the government to allow Islamic Banking system in India as many many European countries and US have done. He said he has met RBI Deputy Governor and Union Finance Minister Pranab Mukherjee. Both have given positive response. For introduction of Islamic banking in India, the present Indian banking law will have to be amended. So he urged the gathering to meet their local MPs and convince them about Islamic financial system.

Talking to TwoCircles.net on the sidelines of the program, stock market professional Tauqeer Anjum from Chennai-based stock broker ITI Financial Services Ltd. said in the last few years there has been rise in number of people who are coming to enquire about Shariat-compliant stocks. His company though does not have any such index, however provides the Muslim investors with information about Shariat-compliant shares and products where they can invest. Excerpt.

Stock market professional Tauqeer Anjum

Do you get Muslim customers/investors who want to know from you about Shariat-compliant products/shares in which they want to invest?

Yes, such people come though in limited number and they want to invest but they have no option or alternative to work, they do not have full information either.

Do you see rise in number of people who are coming to enquire about Shariat-compliant shares?

Yes, for the last five years I have found rise in the number of such people. Earlier I was with MK stock broker and now with ITI Financial Services Ltd for some years. A lot of people come to get information about shares which are not based on interest and are completely Shariat compliant. They show interest in equity shares.

Do you have any list of Shariat-compliant products and shares?

We do not have any such index, but we have information about Shariat-related shares and share this information with the investors who want.

Can you name some companies/products in which Muslims can invest without fear of getting involved in interest?

Sun Pharma, Reliance Industries, Reliance Capital, Dabur these are some stocks/companies in which we can invest.

Such programs are necessary. We in the share market seek to get information about Shariat-compliant finance. We got information about this program. And I am here to attend it.

source : two circle

2 thoughts on “Muslim clerics launch Islamic investment advisory board, pitch for Islamic banking

  1. I have full support for this initiative which is a welcome positive development in the right direction. Myself, being in this field for several years and leading Islamic Finance Product Development in National Commercial Bank,one of the largest bank in the middle east, I can only say that commercial banks should cease this opportunity and establish Islamic Banking set-up. Mohammed A.Alam,alamjeddah@gmail.com

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  2. Respected Teachers.
    As Salaamo ilaikum va Rahmatulah va Barkatahu

    Banking and Islam

    (My Queries and deep sense of hamdardi for my muslim brother who are working in Bank who are complaining of ill treatment from some group of muslim brothers and for people who cant afford to start business or house due to financial problem since Islamic bank has not yet reached in India )

    The bank and banking is view as a business organization working on interest .
    Since interest is haram in Islam the entire set up of bank and banking and employee working in a bank is considered Haram by Islamic Scholars.

    Riba (taking interest) A muslim is not allowed to take or give money on interest.
    Riba is one of the seven major sin in Islam and unforgivable in nature.

    The Ayat in regard to Riba came after Hijri to Yathrib , before this Ayat many Shahabis including the prophet had taken money on interest from the Jew money lender.

    The Institute of Money lending business are harmful for those who take money from
    this money lender who lend money on very heavy interest rate and are very strict and unreasonable this money lenders give money on mortgage of land , gold and other
    valuable items . Where as law of Allah is based on mercy for his mankind Allah has made all the thing Haram to man which is harmful for him and all thing Hallal which is good for him in this world and hereafter .

    During Prophet time it was common observation that those who had took loan from
    these money lenders had to suffered miserably in hadiths it was said that the muslims should not become as cruel as this moneylender and should not give or take money on loan on interest Riba . Taking money on interest was very harmful for all muslim. It bought suffering to them and they would never rise up from poverty and debt .

    Is Modern Banking and Money lender business of earliar time are they same or they are different ?

    Banking have one principle which is very common with Money lender business is lending money on interest but the Institution of banking in modern time is vast and very much different than the money lenders of earliar time .

    Banking Institution in modern time is an financial organization supported by the government and has been legalized and under the control of RBI .

    Banking Institution has help the society at large in development in many field , unlike money lender business who use to charge heavy interest rate and were detrimental to the society at large .

    Modern Banks accept deposit from their client and pay them interest while the money lenders does not accept deposit they work with their own capital .

    Why bank is so important ?
    The prime reason why most of the people all over the world keep money in bank is because their money are in safe custody and are protected against robbery or other calamities.
    Many people have to save money for future they find bank more convenient as such to keep money in bank . Keeping money in bank is like keeping our money and valuable in the hand of people with whom it is safe and on whom they can depend upon .Saving money in bank for protection is the main reason why people keep money in bank while the Money lenders does not takes deposit nor they guarantee or are trustworthy so they can not be bank upon .

    QUESTION ASKED TO THE ULEMAS

    A. If a person want to keep money in conventional bank for safekeeping and not to earn interest is it still haram if he keeps money in bank and does not take interest ?

    Bank is a legalized body and govern by the government of that country . Banking is also an international body and respected by Government of all the countries most of the business through out the world are conducted through banking and every one has trust in the bank . Those who are in business of import and export find it convenient to do their business with bank .

    Businessman all over the world find it convenient to make payment to their party through cheque, the bank accept cheque an transfer the amount of the depositor into the amount of whom the cheque is issued.. We can also obtain money through traveling cheque or through ATM , one can do shopping without paying cash through credit or debit card .
    Banking help a person to book his tickets on line saving time trouble and money . An old and sick person can also take help of telephone banking .

    On other hand the amount of Interest involved in banking is very small compared to the interest charged by the money lenders plus money lenders does not provide all the facilities which a modern bank provides. If we can just consider that the low interest rate is not an interest but a service charge in compare to the services rendered .

    Bank give money to three class of people it give loan to the government , to business organization and to individual for personal need like housing , marriage , medical , education etc It is found that many who had taken loan are able to get benefit from this loan.

    Can Islamic Scholars take a liberant view and look with deeper insight may be it possible that the word interest would be viewed as services charges by bank , since the interest charges are not more than 9 to 10 percent annually .

    There is very narrow line and difference between usury and business . Usury is not permitted in Islam where as business is permitted for example if a person want to invest his money in business with other business man he can invest his money without actually being the part of his business yet obtain profit which is hallal , while a person give a another business his money it is on interest than it is haram .

    Islamic Scholars have no issue over the functioning on bank and the principle of bank except to Riba as such banks and banking is acceptable that is why Muslim financial institution are called Islamic Bank with similar function but difference in basic principle.

    Islamic Bank : Now let us come to Islamic bank is there is any different between conventional bank and Islamic bank there is no difference in the objective and function of the bank.
    The major difference is the Conventional bank is it is Lending oriented while
    Islamic bank is Trade oriented .

    Islamic bank are profit /loss sharing method ( Mushraka ) secondly Profit mark up sale or rental method ( Ijara , Murabaha , B-Maujjol). In Islamic bank the customer is a partner to the bank and give right to the bank to do business on their behalf on their amount of deposit the business is subject to loss and profit which the depositor has to bear the bank take care to do business in such a way to insecure security and profit to the depositor.

    The Mutual fund banking by conventional bank are now more closer to the principle of Islam the money of the depositor is invested in mutual fund subject to market risk , some invest into most reliable and ethical companies and the profit or loss is shared. In mutual fund there is no interest involved it is free from riba . Most of the Scholars accept buying and selling shares , equity share with ethical business organization is hallal.

    Since in India Islamic Bank facilities are not available and Muslims has to keep their account in conventional banks for save custody , or to carry out their business . It is found that many muslim are having account in conventional banks at the same time keeping with the law of sharia many muslims do not take interest from the bank.

    Muslim Bank Employees .

    Question to Ulemas
    Now what is the status of muslim bank employees , bank employee is a commercial graduate whose job is to keep proper account and book keeping he keep the accounts of muslim as well as non muslim client . If a muslim client can have bank account than why a muslim cannot work in the bank when he himself does not take interest on his own saving in bank and he is honestly doing his duty so can a muslim work in Bank ?

    Ill-treatment rendered to muslim bank employees by other muslim brothers

    It is found that many muslim do not treat employees of bank as muslim but openly avoid them and ill treat them is it fair ? No one had ever told the bank employees in the beginning that they should not join the bank it is un Islamic , now since they have already given up half of their life they are told to quit their job or face social boycott .

    In India where employment is so rare where muslim are denied job everywhere , where would this people go only if they could find some better alternative or other supportive job they would .

    Very few people or business organization are doing fair business in fact many business organization have taken loan or loan on interest if dishonesty is every where why just target bank employee because you know there is interest and in other business you do not know .

    Question to Ulemas
    Should we boycott and illtreat muslim who are working in bank ?

    We all know that hallal and haram is the citerior put on human being for test and trail of Allah the act of eating forbidden fruit by Eva and Adam was symbolic of not obeying Allah in fact there was nothing wrong in the fruit it self . Allah has forbidden many thing to muslim as haram but in case of emergency or for survival this haram or certain category of haram becomes hallal.

    There are many Muslim all over the world who have insurance for their car and have medical insurance if they do not have them they are subjected to punishment from the law of that country it is helpless condition and they are living in Non muslim countries .

    We all are waking up to the modern needs of muslim we are going to have Islamic bank and Islamic Insurance till then when this facilities have not reach every where in every country should we not have some solution . Prophet Mohammad (S.A.W.) has said there is coming time people would face complicated and complex problem find solution to them .

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