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Islamic Banking

06 August, 2007

By Col. Riaz Jafri (Retd)

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First of all, please let’s be very clear, Pakistan was NOT created in the name of Islam but for the Musalmaans of the sub continent - a subtle difference but with deep implications if someone cares to comprehend. Pakistan was created not to save Islam or make Muslims more religious but to improve their socio-economic condition. Most  religious political parties including Jamaat-e-Islami, Jamiat Ulema-e-Hind and Majlis-e-Ahrar etc.,  who had bitterly opposed the creation of Pakistan soon  high-jacked it in the name of Islam with the result that we are confronted with their ever increasing demands of Islamising Pakistan. They seem to be taking revenge from the secular followers of secular Jinnah, whom they call  la deen  as per their interpretation of the word ‘secular’. In their such ‘service’ to Islam they have caused immense damage to the unity and integrity of the nation by polarising it in various sectarian and ethnic divides. Now they are demanding for the introduction of the Islamic Banking in the country and in that want the banks to be totally interest free. Sood, sood, sood is the red rag to them and they are not prepared to differentiate between the interest (Sood) and the usury (Riba), which is in fact haraam in Islam for very obvious reasons. Some of the banks under pressure have transformed themselves into Islamic Banks and gotten the better of the naïve mullah by simply changing the nomenclature of the interest paying Savings Bank Accounts to the PLS Accounts (Profit and Loss Sharing accounts) and renaming the interest  as Mark Up or Profit. Mullah is happy that the bank now takes the money on profit & loss sharing basis, and whatever the additional amount the bank pays to an account holder over and above his principal amount is ain hilal. What he does not know is, that the bank would never lend him any money on such an understanding of sharing the profit and loss with him and instead ask him to furnish various securities and collaterals to ensure recovery of every penny lent to him with full interest – ooops – mark up irrespective of his making any profit or losing the money in the business! Otherwise too, if one looks a little closely at the working of these Islamic banks, there is hardly any difference in their operational practices from the other banks, particularly in their transactions with the foreign banks where they have to follow the International Banking rules which are NOT Islamic in any way. In other words these Islamic Banks have double standards – one for the local operations for the consumption of the mullah and the other for their international working. Is it not hypocritical on their part and by their such doings don’t they smudge the sacred name of Islam?

Interest  - raison d’etre

There are no two opinions about inflation and the fact that the money looses its buying value with each passing day. Therefore, the money lent to someone today when returned in the same amount after, say, 5 years would have certainly lost its worth to some extent. How fondly do we reminisce about how cheap were things in our childhood and young days. I remember in 1940 we used to hire a tonga for transporting fruit worth Rs. 10/= only from market to our place. Now I can’t buy even a good quality apple for this amount. To elucidate; gold was Rs. 60/= per tola in 1957.  Today, after 50 years in 2007 it is Rs.16,000/= per tola. A whopping jump of more than 266 times!  If I had borrowed Rs. 60/= from someone in 1957, it would be ridiculous for me to return him Rs. 60/= today in 2007 as repayment towards the loan.  But I can’t pay him more nor can he demand more as according to our Ulema that will be interest and interest in ANY FORM is haraam in Islam. Now suppose in the same 1957 he had lent me a gold coin (Pound Sterling, Ashrafi etc.) or one tola of gold on the mutual agreement that whenever feasible I would return him the same gold coin or one tola of gold in kind. Naturally, in1957 I sold the gold in the open market and got Rs. 60/= for it which money I used for my immediate need then.  But, now in 2007 if I have to return him his piece of gold how much would it cost me to buy it from the market? Rs. 16,000/= . That means I will pay him 266 times more of the ‘money’ that I originally borrowed from him.  The money got so much devalued over the period of 50 years that today’s Rs.16,000/= are just equal to Rs. 60/= of 1957.  Therefore, quite logically if I had borrowed Rs. 60/= in currency from my friend in 1957 I should return him Rs. 16,000/= in currency today in year 2007. But can I? What would you call it?  Sood, Interest, Riba, Mark Up or what?  Is it really Haraam in Islam or is there something more to it than what we are made to believe or understand?  If it is acceptable to Ulema in the case of gold, which I am sure they will have no object to, why can’t the same analogy be applied in the case of currency bills also?

The Way Out

Anyway, assuming that the Ulema will have no objection in returning the same weight of gold to the lender as originally borrowed from him, irrespective of the period that the borrower kept it under his use, the bank could also resort to converting their transactions in measure of gold of equivalent weight. Let me explain using a hypothetical case. Suppose I opened an account in a bank by depositing Rs. 10,000/= on 1st July. For ease of understanding, let’s suppose the gold was Rs. 1,000/= per gram on that day. In this computer age my Rs.10,000/= will instantly be converted into the exact weight of gold which will come to10 grams and my Balance will show 10 grams of gold. On 30th July I want to withdraw  Rs. 5,000/= and write a cheque for it. The bank will pay me Rs. 5,000/= in the currency bills but adjust it against my balance of 10 grams of gold. Again, suppose the gold price had in the meanwhile gone up by Rs. 50/= per gram making it Rs. 1050/= per gram on 30th July.  The bank will, therefore, at this rate of gold deduct, 4.76 grams from my balance of 10 grams leaving me a balance of 5.24 grams. Again, on 4th August I deposit Rs. 20,000/= into my account and the gold price on 4th August happens to be Rs. 1100/= per gram. The bank computer will instantly convert my Rs. 20,000/- at this rate into 18.19 grams of gold and credit it to my previous balance of 5.24 grams making it a total of 23.43 grams of gold for me. Apparently it would seem that I have lost some money during the month because 10,000 + 20,000 – 5,000 are equal 25,000/=  and I have a gold balance of 23.43 grams only. But it is not so. The value of 23.43 grams at Rs. 1,100/= (the bullion rate of 30th July and assuming there is no increase in gold price during the last 5 days or so – upto August 4) comes to Rs. 25,773/= .A clear gain of Rs. 773/= in the balance what should have been ordinarily Rs. 25,000/=. According to my reckoning this hypothetical gain of Rs. 773/= will not fall under the purview of Riba or usury or interest etc. and the Ulema should not have any objections to such a ‘profit’.

Bank’s Profit: 

Now,  if the creditors are to be paid exactly what is due to them and the borrowers charged exactly what they owe, then how does the bank make money to meet the expenses of running the establishment and support the huge paraphernalia for the bookkeeping of the account holders and carry out other financial transactions?  I admit my inadequacy to answer this question completely which is the domain of the actuaries and financial gurus. However, to my mind the following could do the needful for the bank :


1. Service Charge:  The bank could be allowed a Service Charge of, say, 0.1% or so on all transactions. Exact rate can be fixed by the State Bank after negotiations with the banks.

2. Type of Account: The “Transaction through Bullion” shall apply only to the interest bearing accounts like Savings and Fixed Deposit Accounts etc.. The Non-Interest bearing accounts like Current and Foreign Currency Accounts will be operated as hither-to-fore.

3. Miscellaneous Operations:  All other operations of the bank like furnishing credit lines, securities, bank guarantees, letters of credits, lockers, certificates etc. will remain also as hither-to-fore.

4. Any Other Option:  The financial pundits, the actuaries, the State Bank, the Financial Institutions and government can come up with more ways and means of allowing the banks to make REASONABLE profit for providing the Interest-Free banking to the public.

The above are the random thoughts of the scribe, not at all intending to tread upon the domain of the experts and Islamic scholars, who can expand upon the basic idea of ‘transactions through bullion’, if found feasible. 

Reader Comments:

Islamic Banking - I would have ended as others.

Islam : stop evil by hand writing or prayer or poorly trained Owlemas ink could finish from ocean unlike Allahs”.We consider ourselves good Muslim.Islam is right about gold riba sood junk bond or swindling to individual UMMA via so called Islamic Banking (
In my opinion)”.Islamic teaching is avoid ten commandments follow Quran and Holy Prophet and grow like seed or dana principles.Muslim Owlemas have knowledge of Quran surah comprising chapters on divorce science law family law etc.Some Muslim
Owlemas have PhDs in economics Banking stock exchange IMF and works on the
Principles of Saudi Sheiks Emir or Kebab combo.

Using above method we win and lose to swindlers of greed (often).In my opinion both
Muslim Jews Christian Indian and their Stock basis RRSP sharia Islamic Banking normal Banking have flaws.

In addition the other day I had a store which sold Rs 8,000,000 in one month .I had brought the store on franchise for cash Rs 6,000,000/-. i.e. if you deal cash you do not use riba .Rent per month was supposed to be Rs 35,050 /.Unofficially they changed it for Rs70,000 /month for 2 years .Cadillac f owned the mall and I informed them another franchisor wants to buy it off me for cash.Together they stole it 100% free with the Judge of ours explained I am on your side and your lawyer and I worked for same firm but
Cadillac F officers stole it by forgery and gone .The very would be purchaser is running it even now.This is democracy this is their stock exchange this is what they do as animal like.Use Muslim principle or british join them beat them or reborn .Imagine profit and
Rent and wage for family members with one employee.
Under normal circumstance I could have replicated on stock exhange basis and shared
Profit genuinely on certain principle which seem correct. In fact My colleague a design company told me you and I design a franchise for yooooo have knack for
Profit making. My family and I fighting Hindu Muslim Sikhs sheiks Christian advisors and their principles such as above have polluted the world with gimmick (including
Islamic Banking).On the basis of IB alone we have been bankrupt dozens of time
Squander asset get killed or helped none Muslim such as Japan make out of Islam which they do while they also none stop sabotage us as they do .Japan has designed namaz and jama Masjid Muslim style with Buddhism and profit combo.

be Zee, United Arab Emirates - 06 August, 2007

Hiding GOLD in pages of Koran.

Col Jafri has explained very well the roots of interest free banking.All I want to ask those who oppose him.How
about those who mint money from deposits in banks outside the country.It is true that Interest or riba is
a curse that divides humanity.But one cannot ask one party to go naked, while
others indulge in furs.

Khalid Rahim, Canada - 07 August, 2007

Islamic Banking

Islamic Banking-Part1
Author of the Islamic Banking started unnecessary controversy, such as Pakistan Was created for “Musalmans of Subcontinent”. Col sahib is a funny person so he took advantage of inserting his comedian thoughts in a serious matter. In Arabic there is no word “Musalmans”. Proper world is Muslim or Muslimeen”. Muslim did not join Indian National congress because that was a secular party. But Muslim League was representing Muslims of India or sub-continent. Slogan of Muslim opposite to Congress was two nation theories, means two separate states, on those areas where Muslims were in majority. That was ultimately required to be called Muslim State (Islamic Republic of Pakistan), so after creation of Pakistan green part of flag was representing Muslims in majority.
Founder of Pakistan was not secular at all, he kicked out his daughter who married to non-Muslim, and she was not allowed to enter Pakistan in his life. He did not marry to a non-Muslim, he converted her then married. Raising flag by clerics simultaneously at Karachi and Dacca represents he was not communist, atheist or enlightened moderate. It does not mean he wants a theocratic state.
Prof. Mehdi Hasan and Prof. Mubarik use to define such theory but did not attain any popularity, usually peoples kept quiet due to their grey hairs. It is not understandable what Jafri want to establish with Islam and Mussalman? He has not explained what theory he has in his mind about Islam and Muselmans. It is always said “Deen e Islam”, “Ummah” or “Ummat wahida” to remove any confusion. He further says that Pakistan was created for economical benefits of Muslims, whether Muslims have achieved economical benefits, except a few groups on gun point achieved such benefits. The fear which enlightened moderate have in their mind, that if Islamic Laws will be ever implemented, those will provide protection to all Muslims and non-Muslims, where as elite class along with feudal under the protection of Army want all economical benefits for upper class only. Most vulgar minded moderates fear that perhaps those will be punished under any Islamic Law.
These types of moderates are atheists, who want to create anarchy, sectarianism and nudeness only.
Later he mentioned some political parties which opposed Muslim league, in fact he pointed out only those religious parties which could be against his sectarian faith. To keep record straight:
General Elections 1937
Total Seats: 1585 out of which Congress: 714,
Total Muslim seats: 485, out of which Muslim League Seats: 108, other Muslim Parties got: 377
1945-46 Elections:
Total Muslim Seats: 524, Muslim league seats: 453.
In the same election other parties who opposed Muslim League: 29 parties. (Jafri is not aware of following parties except JUH, JI and Ahrar)
Parties and number of Candidates: Congress 96, Unionist 74, Nationalists 68, Jamiat e Ulma Hind 50, Independent 451, Momin 21, Karshak Perja 14, Syed Group10, Ahrar 30, Amarat Party: 3, Khaksar 13:, Muslim Parliamentary Board: 10, Muslim Majlis: 10, Comminist: 6, Radical: 3, Sunny Board:2, Shia Political Party:2, Shia Board:2, Proja: 1
The only candidate against Quaid e Azam at Bombay was Husain Bhai, Shia Political Party, and against Ahmad Jaffar also from Shia Political Party. More over Liaqat Ali Khan defeated M.A.Kazmi from UP.
To keep records straight majority of Unionists now have the label of Muslim League or PPP. This is feudal and Army coalition.
We will represent some Ayah Mubariks regarding interest, which are self explanatory:
“Who believe in the unseen, establish the Salats and expend (in our way) out of what we have bestowed on them; (Al Baqrah: 3)
Ghayb signifies the verities which are hidden from man's senses and which are beyond the scope of man's ordinary observation and experience, for example the existence and attributes of God, the angels, the process of revelation, Paradise, Hell and so on. 'Belief in the ghaib' means having faith in such matters, based on an absolute confidence in the Messengers of God and despite the fact that it is impossible to experience them.

internationalprofessor, Pakistan - 07 August, 2007

Islamic Banking

Islamic Banking-Part 2
According to this verse, Qur'anic guidance can prove helpful only to those prepared to affirm the truths of the supersensory realm. People who make their belief in these questions conditional upon sensory perception of the object of belief, and who are not prepared even to consider the possibility of the existence of things that cannot be weighed or measured, cannot profit from this Book.

“And take counsel from them in matters of importance”. (Al I Imran: 159)
“He also enjoined on his children to follow the same way. Jacob also did the same and his last will to his sons was, "O my children, Allah has chosen the same way of life for you. Hence remain Muslims up to your last breath." (Al baqra: 132)
Deen is a Qur'anic technical term, signifying the way of life, the system of conduct, and the code on which man bases his entire mode of thought and action.
“And whoever seeks a way other than this way a submission (Islam), will find that it will not be accepted from him and in the Life to come he will be among the losers”. (Al-Imran: 85)

Therefore, (O believers,) give to your relative his due, and to the needy and the wayfarer (his due). This is the best way for those who seek Allah's goodwill: such alone will attain true success. (Ar-Rum: 38)

It has not been said: "Give charity to the relative, the needy and the wayfarer, but their due because this is their right (due to them from you), which you must give them in any case. You will not do them any favor if you part with a part of your wealth for their sake. You should remember it well that if the real owner of the wealth has given you more than others, your extra wealth is, in fact, the right of others, which has been given to you for your trial so that your Lord may see whether you recognize the rights of others and render their rights to them or not."
Anyone who reflects over this Divine Command and its real spirit cannot help feeling that the way proposed by the Qur'an. For man's moral and spiritual development inevitably envisages the existence of a free society and economy. This development is not possible in a social environment in which the people's rights of ownership are set aside and stifled. The system in which the state assumes ownership of all resources and the government machinery the entire responsibility of distributing provisions among the people, so much so that neither can an individual recognize the right of the other and render it, nor a person develop a feeling of goodwill for the other after he has received help, is a purely communist system. Such an economic and social system, which is being advocated in our country today under the deceptive name of the 'Qur'anic Order of Providence" (Nizam-i Rububiyat), is entirely opposed to the Qur'anic scheme itself, for it suppresses the development of individual morality and formation of character altogether. The Qur'anic scheme can operate and function only in a society where the individuals own some resources of wealth, possess rights to expend it freely, and then render willingly and sincerely the rights of God and His servants. In such a society alone there can arise the possibility that, on the one hand, the people may develop individually the virtues of sympathy, kindliness and affection, sacrifice, recognition of the rights of others and rendering those rights in the right spirit, and on the other, the beneficiaries may develop in their hearts pure feelings of well-wishing, gratitude and thankfulness for the donors. This system only can produce the ideal conditions in which the elimination of evil and the promotion of goodness do not depend on the intervention of a law-enforcing authority but the people's own purity of the self and their own good intentions take up this responsibility.
This does not mean that true success can be attained just by rendering the rights of the needy and the wayfarer and the relative and nothing else is needed to be done for this. But it means that those who do not recognize these rights of others nor render them will not attain true success. It will be attained by those who render the rights sincerely only for the sake of Allah's goodwill and pleasure.

“But those who devour interest become like the one whom Satan has bewitched and maddened by his touch. They have been condemned to this condition because they say, "Trade is just like interest”, whereas Allah has made trade lawful and interest unlawfu1. Henceforth, if one abstains from taking interest after receiving this admonition from his Lord, no legal action will be taken against him regarding the interest he had devoured before; his case shall ultimately go to Allah. But if one repeats the same crime after this. He shall go to Hell, where he shall abide for ever (Al-Baqarah: 275)

internationalprofessor, Pakistan - 07 August, 2007

Islamic Banking

Islamic Banking-Part 3

The term riba in Arabic means 'to grow, to exceed, to increase'. Technically, it denotes the amount that a lender receives from a borrower at a fixed rate of interest. At the time of the revelation of the Qur'an several forms of interest transactions were in vogue and were designated as riba by the Arabs. Of these one was that the vendor sold an article and fixed a time limit for the payment of the price, stipulating that if the buyer failed to pay within the specified period of time, he would extend the time limit but increase the price of the article. Another was that a man loaned a sum of money to another person and stipulated that the borrower should return a specified amount in excess of the amount loaned within a given time limit. A third form of interest transaction was that the borrower and vendor agreed that the former would repay the loan within a certain limit at a fixed rate of interest, and that if he failed to do so within the limit, the lender would extend the time limit, but at the same time would increase the rate of interest. It is to transactions such as these that the injunctions mentioned here apply.
The Arabs used the word majnun (possessed by the jinn) to characterize the insane. The Qur'an uses the same expression about those who take interest. Just as an insane person, unconstrained by ordinary reason, resorts to all kinds of immoderate acts, so does one who takes interest. He pursues his craze for money as if he were insane. He is heedless of the fact that interest cuts the very roots of human love, brotherhood and fellow-feeling, and undermines the welfare and happiness of human society, and that his enrichment is at the expense of the well-being of many other human beings. This is the state of his 'insanity' in this world: since a man will rise in the Hereafter in the same state in which he dies in the present world, he will be resurrected as a lunatic.
The unsoundness of this view lies in not differentiating between the profit one gains on investment in commercial enterprises on the one hand, and interest on the other. As a result of this confusion, the proponents of this view argue that if profit on money invested in a business enterprise is permissible, why should the profit accruing on loaned money be deemed unlawful? Similar arguments are advanced by those who thrive on interest in our own times. Their argument runs as follows: A person who could have profitably invested his money in a commercial enterprise loans it out to somebody who, in turn, makes a profit out of it. In such circumstances why should the borrower not pay the lender a part of the profit? Such people, however, disregard the fact that no enterprise in which a man participates, whether it is commercial, industrial or agricultural, and whether one participates in it with one's organizing skill or capital, or by both, is immune from risk. No enterprise carries absolutely guaranteed profit at a fixed rate. What is the justification, then, for the fact that out of all the people in the business world, the financier alone should be considered entitled to a profit at a fixed rate in all circumstances, and should be protected against all possibility of loss?
Let us set aside for a moment the questions of non-profitable loans and vacillations in the rate of profit. Let us consider only the question of loans for profitable enterprises, and confine our consideration to loans made at non-exorbitant rates of interest. The question, however, remains: Which rational principle, which logic, which canon of justice and which sound economic principle can justify that those who spend their time, energy, capacity and resources, and whose effort and skill make a business thrive, are not guaranteed profit at any fixed rate, whereas those who merely lend out their funds are fully secured against all risks of loss and are guaranteed profit at a fixed rate? And which principle can justify the fact that a man lends out his funds to an industrial concern and fixes, say for the next twenty years, that he will be entitled to receive each year a given per cent interest on his capital, while the proprietors of the industrial concern have no means of foretelling the price changes affecting their commodity, and hence their profit? Let us consider another case, namely that of war loans. How can it be appropriate that all classes of people endure all kinds of losses and are exposed to all kinds of risks and dangers connected with war, whereas the financiers, simply by having made loans, continue to receive Interest on them for long periods of time, sometimes even for a whole century?
The essential difference between non-interest business transactions and interest-bearing transactions rests on the following grounds:

internationalprofessor, Pakistan - 07 August, 2007

Islamic Banking

Islamic Banking-Part 4
(1) in ordinary business transactions there occurs a mutually equitable exchange of benefits between the buyer and the seller. The buyer derives benefit from the article which he purchases from the seller; the seller receives compensation for the effort, ingenuity and time spent on making the article available to the buyer. In interest-bearing transactions, on the other hand, the exchange of benefits does not take place equitably. The interest receiving party, receives a fixed amount as a payment for using the loan he advances and thus his gain is secured. The other party to the transaction has only one thing at his disposal - a period of time during which he can make use of the funds loaned, and which may not always yield a profit. If such a person spends the borrowed funds on consumption, there is obviously no question of profit. Even if the funds are invested in trade, agriculture or industry, one stands the chance both of making a profit and of incurring a loss during the period of time in question. Hence an interest-bearing transaction entails either a loss on one side and a profit on the other, or an assured and fixed profit on one side and an uncertain and unspecified profit on the other.
(2) In business enterprises the profit that a person makes, however large it may be, is made only once. The person who lends out money on interest receives, on the contrary, an on-going profit which multiplies with the passage of time. Moreover, however large the extent of the profit made by the borrower from the loaned money it will still be within certain limits, while the claims of the lender in return for this profit are unlimited. It is even possible that the lender may seize the entire turnover of the borrower if he defaults on payment, thus depriving him of all the resources from which he makes his living. It is also possible that even after the lender has seized all the property of the borrower, his claims will still remain unsatisfied.
(3) In a business deal, the transaction ends with the exchange between a commodity and its price. After this exchange has taken place, no obligation remains on either party towards the other. If the transaction is that of rent, the thing rented (e.g. land or building) is not consumed but is rather used and remains intact, and is returned to the owner after a stipulated period of time. In a transaction involving interest, however, what actually happens is that the borrower first spends the loaned funds, and then reclaims them with his efforts, returning them to the lender together with a surplus.
(4) In agriculture and industry, and in trade and commerce, one makes a profit after having expended one's effort, intelligence and time. In an interest-bearing transaction, on the contrary, one becomes entitled to a sizeable share in the earnings of others without any toil and effort, by merely allowing someone to make use of one's surplus money. The lender is neither a 'partner' in the technical sense of the term, for he does not share both the profit and the loss, nor is his share in proportion to the actual profit.
There is thus a tremendous difference from an economic point of view between business transactions as such and interest- bearing transactions. Whereas the former plays a highly constructive role in human society, the latter leads to its corrosion. This is in addition to its moral implications. By its very nature interest breeds meanness, selfishness, apathy and cruelty towards others. It leads to the worship of money and destroys fellow-feeling and a spirit of altruistic co-operation between man and man. Thus it is ruinous for mankind from both an economic and a moral viewpoint.
What is said here is not that man will be pardoned by God for the interest taken in the past, but that it is for God to judge him. The expression: 'may keep his previous gains' does not signify absolute pardon from God for the interest one has taken, rather it points to the legal concession that has been made. It only means that no legal claim will be made for the interest taken in the past. For where such claims to be entertained, an endless succession of litigation would ensue. From a moral point of view, however, the earnings made by way of interest would continue to be impure. If a person is really God-fearing and if his economic and moral viewpoint has really undergone a change under the influence of Islam, he will try to abstain from spending on himself the income which he has obtained by illegitimate means. He will also try to seek out those from whom he has derived illegitimate earnings and will try to return those earnings to such people; if he is unable to locate them, he will try to spend them on collective welfare rather than on himself. It is this conducts alone which can save him from the punishment of God. As for one who continues to enjoy his illegitimate earnings, it is not unlikely that he will be subjected to God's punishment.

internationalprofessor, Pakistan - 07 August, 2007

Islamic Banking

Islamic Banking-Part 5

“O Believers fear Allah and give up that interest which is still due to you, if you are true Believers;” (Al-Baqarah: 278)

“If, however, you repent even now (and forego interest), you are entitled to your principal; do no wrong, and no wrong will be done to you” (Al-Baqarah: 279)

“If your debtor be in straitened circumstances, give him time till his monetary condition becomes better. But if you remit the debt by way of charity, it would be better for you, if you only knew it.(Al-Baqarah: 280)

“O Believers, when you contract a debt for a fixed; term, you should put it in writing. Let a scribe write with equity the document for the parties. The scribe whom Allah has given the gift of literacy should not refuse to write. Let him write and let the one under obligation (the debtor) dictate and he should fear Allah, his Lord, and should not diminish from or add anything to the terms which have been settled. But if the borrower be of low understanding or weak or unable to dictate (for any reason), then let the guardian of his interests dictate it with equity. And let two men from among you bear witness to all such documents. But if two men be not available, there should be one man and two women to bear witness so that if one of the women forgets (anything), the other may remind her. The witnesses should be from among such people whom you approve of as witnesses. When the witnesses are asked to testify, they should not refuse to do so. Do not neglect to reduce to writing your transaction for a specified term, whether it be big or small. Allah considers this more just for you, for it facilitates the establishment of evidence and lessens doubts and suspicions. Of course, there is no harm if you do not put in writing the common transactions you conclude daily on the spot, but in case of commercial transactions you should have witnesses. The scribe and the witnesses should not be harassed: if you do so, you shall be guilty of sin. You should guard against the wrath of Allah; He gives you the knowledge of the right way for Allah has the knowledge of everything.
(Al-Baqrah: 282)

At other place he asked a funny question “Ulema will have no objection in returning the same weight of gold to the lender as originally borrowed from him”. It is sure that Jafri is not economist, neither clergy. It is necessary for a person to talk about what he knows. First he must learn knowledge of Quran and Hadees before writing any nonsense about Islam.

internationalprofessor, Pakistan - 07 August, 2007

Islamic Banking

As internationalprofessor said, before we write about a topic author should do a thorough research on the topic, so the readers could form an educated opinion. Especially, when it is concernig one third of the world population and atleast 90 % of people in the country he is speaking about that would not support his opinion.

For Riaz's information, few banks that started to offer islamic banking in Pakistan, were not pressured by the mullahs or the government to offer such services. In fact banks are offereing these islamic banking products because there is a great demand for it, and these banks know and done their research to offer Islamic Banking. There is a growing need for the Islamic banking in pakistan.

I am here in the USA, even here in the secular western country I have an option to use Islamic banking services(to name few: Devon Bank,University Islamic Financial Corporation,Ijara Loans,Guidance Financial, Lariba), and sadley not in my own Islamic Repulic Of Pakistan.

Sherdil Khan, United Kingdom - 08 August, 2007

An army man suggesting about Banking,Are the economist dead.

Nothing is more dangerous than the army people giving advices in areas they know nothing about(They should always remember that their education is 12th grade,their experience constitutes half life in saluting and taking salutes and calling each other Sir, like tongawalas of Rawalpindi, and half of other life in doing left,right)It is like encouraging them to become ambassadors,VC's,Chairman of big corps or DGs of other institution.Result is decline. If Col Sb,talks about how to improve security of banks,it is understandable.The intellect and patriotism of this segment is such that Retd.Gen Qazi Min.of Ed, says that Urdu is unimportant. He had earlier said that our history traces back to Ashoka and not to Qasim. His countrepart another low life, the Pakistani ambassador in US said that India is our role model. They come and start giving advices like professionals on areas they don't know ABC about. It is a disgrace.It should be understood by every Pakistani that their getting higher in civilian positions is that Pakistanis don't criticise them enough.

Jawaid Sultan Pindiwal., United Kingdom - 11 August, 2007

Islamic Banking Caliphate under One roof

Do you really believe Islamic Banking is alternative to Caliphate or Muslim Common Market to fit in Global village global Trade with other nations (even posting a sign Islamic Bank H/Q) in tallest Building dedicated as Islam under one roof controlling 55 OIC countries called new Caliphate equivalent controlled by A Dubai Shaik's Islam or Caliphate equivalent?

B.Mukhamadov, United Arab Emirates - 12 August, 2007

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