Islamic Banking…….How Authentic??…..Veracity in Doubt!


The concept of islamic banking is mushrooming @ a rapid pace.Many financial institutions are accepting the idea of islamic banking.This approach of banking is gaining popularity by “leaps and bounds”; specially in the Muslim Countries.In countries like Saudi-Arabia,Malaysia etc.,the concept of islamic banking is a Bollywood hit.It is gaining fame in countries like US,UK etc……this stamps the fact that there is something special in it(but i strongly doubt it).
Islamic banking,in lay-man language means banking as per the Islamic rules.This sort of banking is a bit different than the orthodox procedure of banking that we are used to,though the basics are somewhat the same.For instance, interest is not allowed in islamic banking.Furthermore,the money involved must not be engaged in Gambling,Porks and alcohal based professions;as all these are “Haram”, as per the Islamic rules.Even the concept of security mortgage is prohibited.Any excess or surplus is termed as “Riba”.
But a basic question that arises in my mind is that,without interest,without any sort of mortgage and ultimately without a professional attitude,how can a financial institution survive in this era of “Rat Race” and “Cut Throat Competition”.I am not someone who is well versed in banking or finance,but atleast i can comprehend that without a profit motive, the survival of any financial institution is at the verge of being impossible.Soon I was able to find out the “secret” behind the functioning of these banks.The idea or rather the secret(as i call it) was simple,deft maneuvering of financial terms and the replacement of banking terminology with a different one, just to puzzle the common-mass a bit.To wrap-up the whole story,the simple funda is to make a “breach” of faith.Mere application of islamic laws in banking is not enough,if the intent is not pious and benevolent.This approach of Islamic banking will lead to “Pseudo Islamic Banking” or rather “Titular Islamic Banking”. If the intent is lost, then application of islamic laws are futile; because it’s not a matter of “money and funds”,instead its a matter of “heart and soul”.
Now, lets plunge into some basic Islamic Banking transactions,a vehicle loan for instance. In normal banking procedure,you can have a vehicle loan at a fixed interest rate.But in Islamic Banking there is no term like interest.You can have the loan without any sort of interest……..wait a bit,dont start licking your lips!………the absence of “interest” is compensated with the presence of “profit”…….isnt that ironic??……Actually,the bank buys the vehicle itself and then it sells it to the loan applicant at a “profit”, isnt that adroit. If you put the whole concept under the scanner,its worse than the normal concept of banking……….or if i reverse engineer my approach, the conventional concept of banking  is far better.
In comparison to the concept of the islamic banking,the concept of gramin banking or rahter the micro-economics is far better.Even though the concept of micro-economics has faced a zealot approach by some fanatics. Atleast,the concept of micro-economics avoids breaches and has the element of transparency.Recently,it was found that an Islamic bank in malaysia had its money involved in Gambling and venture-based gaming.
In a country like India, islamic Banking will just help to put the religious rifts into gear.We Indians are actually fickle-minded…….any thing new attracts us.I think thats the cardinal reason why Islamic Banking is gaining fame in India as well. Those who think that Islamic Banking is pious,i can rest assure them that it is not.I suspect that this new concept of banking can just weaken the feeling of patriotism in India,and can lead to detrimental consequences.
Mere application of Islamic rules in banking,without the “real intent”,is of no use…….but may be thats wat u call “banking” @ its real best!
"Nomadic"

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4 comments

  1. nice title ,suit 100% with the matter….good use of vocabs (Pseudo Islamic banking etc), showing mirror to the modern corporate world.

  2. correct analysis is indian context…bt islamic bankin considers partnership instead of fixed interest rate i.e risk sharing.wid d foundation being trust..it brings d business out f every naive investor..ensuring better liquidity n growth in d market…d concept’s growth rate speaks 4 its authenticity..haan if d name wud hav been sumthin else (wich did not include islamic),it wud hav been more succsful…as dat word brings doubt n fear in d hearts…GUD CRITICAL WORK…bt d name shud hv been disadvantages of islamic banking…jai hind

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