A Detailed Look at the Fast-Growing Islamic Banking and Finance Sector

Press release
September 26, 2012
Hoboken, NJ
A Detailed Look at the Fast-Growing Islamic Banking and Finance Sector

The severity of the global financial crisis that followed the years 2008 and 2009 has been described as second only to the Great Depression. Yet, during those two years, the assets of the 500 top Islamic financial institutions grew — from $639 billion to $820 billion.

What sets apart the Islamic finance industry from the rest of the financial world? And how have its differences helped this sector thrive when the rest of the global financial market struggles to regain its balance?

Faleel Jamaldeen, author of Islamic Finance For Dummies, says: “I’m bullish on Islamic finance: I’m a firm believer in the market potential of this industry. I’m also a firm believer in the benefits of Westerners understanding the concepts that lie behind the Islamic financial products — knowing why a separate industry exists and why many conventional products don’t work for Muslims.”

“In the West, the general public and even many financial professionals know absolutely nothing about Islamic finance. Those who’ve at least heard of it may assume that they can’t understand or participate in it because they aren’t Muslim and don’t speak Arabic.) Western women may assume that they aren’t allowed to participate in the Islamic finance industry because of misconceptions about Islamic law. (Women can and do fully participate in Islamic finance — as professionals and as investors.)”

“Islamophobia is a prejudice against Islam or Muslims that has unfortunately become more commonplace and more intense in the West since the attacks on the United States on September 11, 2001. Some people simply don’t want anything to do with an industry that’s affiliated with Islam. Until now, searching for a book to help you navigate the subject of Islamic finance wasn’t very rewarding. That’s because Islamic finance has been the topic of textbooks but not many nonacademic titles.”

Jamaldeen goes on to say, “I wrote this book to bridge the gap between people who need and want to know about Islamic finance and an industry that needs and wants their participation. You’ll find that you don’t need to learn a new language, change your personal religious views, and that job prospects are strong for both men and women with conventional banking and finance skills who are open to learning about new products and a new way of conducting business.”

“I wrote this book assuming that you have a strong interest in the financial industry already. Maybe you’re a banker, a mutual fund manager, an investment consultant, or an insurance agent. Perhaps you have Muslim clients asking you to consider adding sharia-compliant products to your roster of offerings, or your boss mentioned in passing that Islamic finance has been growing like crazy and your company should find out how to tap into the market. Maybe you’re a college student focusing your studies in finance, and you’ve read that job prospects are good for people with specific knowledge about Islamic finance.”

Whatever the scenario, you’ll find clear and easy-to-understand information on how the Islamic finance industry works.

source : wiley.com

Experts say Islam can fix global financial woes

An interest-based global financial system is at the root of the global economic crisis, and there is an Islamic solution to the problem, experts at the Dubai Peace Convention said yesterday.

“Since the decline of communism and the emergence of one superpower, the global financial system has been purely based on interest,” said Dr Hussein Hamed, who is on Sharia boards of several banks and financial institutions, who is considered the father of Islamic finance and is an expert on Islamic banking. “Currency value has become interest-based and, therefore, when the crash happened, the only monetary system that was not affected was the interest-free Islamic system.”

Mohammed Akbar, a Dawa scholar from India, suggested that the current woes were a symptom of a deeper problem with the capitalist system.

“The bankers’ panic of 1907, the 1929 Great Depression, the Black Swan event of 1987 as well as the dotcom crisis in 2000” all hurt the global economy and were all caused by capitalism, he said.

According to speakers at the event, the problems can be solved using two major principles of Islam – the Quran and the Sunnah.

“Islam would, in a heartbeat, stop the spread of worthless debt notes,” Mr Akbar said.

It would also “terminate the system of interest which are the two underpinnings of the capitalist enterprise”, he said.

Dr Hamed said: “In the Islamic system, the monetary value of currency has to be valued with commodities – the value of gold is for gold, the value of silver is for silver, barley for barley and wheat for wheat.

“Therefore, depending on the availability of commodities, the value rises or drops.

“The interest-based system is forbidden in Islam, and the economic systems are built within moral guidelines, so, therefore, a family would not lose their home because a banker has placed a floating rate on it.”

Mr Akbar, though, pointed out that the modern Islamic banking system was not operating at its full potential.

“Islamic banking has had to be subjected to the current global monetary model to operate,” he said.

“If the system runs on its own ethical values and under proper administration, it would represent an irrevocable setting for global recovery.”

Currently, European banking institutions and global players were borrowing from the Sharia-based system to correct the deviation in the markets, said Dr Hamed.

“Islamic banks are popping up in the UK. Sukuk is being practised in Germany and China. The world is realising its true value.”

By awad mustafa

source : the national