Why Islamic Banking for Indian Economy?

By Syed Zahid Ahmad

With suppressed desire by Indian Muslims to have Islamic Banking in India, and avoidance to cite taboo word ‘Islamic Banking’ by Raghuram Rajan Committee report on financial sector reforms, it has became more important that besides considering the religious, social, political and diplomatic dimensions, we must understand the economics of Islamic banking for Indian economy. Hope India will not miss the Islamic banking as its missed Globalization bus in the eighties and Asian Tigers including China superseded it. Recently Zee news, Financial Express and the Statesman dailies have projected high potentials for Islamic banking in India. Before it become a political agenda during coming elections, it is better to evaluate economics of Islamic Banking. After all the political parties need economic rationality to convince majority of voters that Islamic Banking is not being allowed to please Muslim voters but to genuinely boost faster and inclusive growth for Indian economy.

Impact of crisis on GCC countries manageable, Islamic bank says

The effects of the global financial turmoil on GCC countries are manageable compared to other parts of the world due to the fundamental strength of the Gulf states, according to a Bahrain-based Islamic investment bank.

Economist Suggests Islamic Finance as Solution to Economic Crisis

As the dust settles from the 2008 elections, pressing questions remain about the state of the world economy. “This is the major crisis that Western capitalism is facing since 1929,” said economist Loretta Napoleoni during a lecture sponsored by UNM’s International Studies Institute. Napoleoni’s talk on “The Global Financial Crisis” was the keynote of ISI’s lecture series, “Global Instability: Causes, Consequences and Cures.”

She traced the current crisis to a shift from “a nation state to a market state” – that is, from a focus on the welfare of citizens to growth of business. “Now, what is happening today, the credit crunch, is actually linked to the fact that this state did not regulate finance for fifteen years.”

Islamic finance more dynamic than conventional banking

The Islamic Banking System is the true form of banking and it is the only alternate to the conventional system of banking which has failed to support the bolster up world’s economy. This was stated by the Director of Islamic Banking desk at State Bank of Pakistan (SBP) Professor Dr Pervaiz Saeed, while addressing a two-day workshop on “Islamic Banking and Finance” at Council of Islamic Ideology (CII).

The workshop inaugurated by CII Chairman Dr. Khalid Masud has been organised as a follow of international conference on “Islam and current economic issues” held in Islamabad in 2007. The objective of workshop is to review the existing Islamic Banking system in Pakistan which dates back to 1990 and take recommendations from Ulema who are attending the event.

Islamic Banking: Steady in Shaky Times

Principles Based on Religious Law Insulate Industry From Worst of Financial Crisis
By Faiza Saleh Ambah Washington Post Foreign Service, Fri Oct 31 2008

As big Western financial institutions have teetered one after the other in the crisis of recent weeks, another financial sector is gaining new confidence: Islamic banking.

Proponents of the ancient practice, which looks to sharia law for guidance and bans interest and trading in debt, have been promoting Islamic finance as a cure for the global financial meltdown.

Prominent Indians in support of Islamic banking

Amar Singh, a member of parliament and general secretary of the Samajwadi Party in India, is to meet the Indian government to encourage the growth of Islamic banking. Singh said he will press Indian Prime Minister, Dr Manmohan Singh, face to face on the issue, while attending a gathering of economists and intellectuals at the India Islamic Cultural Centre in New Delhi. Abdur Raqueeb, director of the Centre, also strongly supported Islamic finance, saying that opening the door to the industry would immediately unleash trillions of dollars in foreign direct investment.

The West Should Promote Islamic Banking

This article was published in ISLAMICA magazine in Jan 2007. Two years later it’s relevance becomes more valuabe after current financial crisis. Admin

By Prof Rodney Wilson – Islamic banking, which implies the avoidance of interest, has become a substantial industry during the last four decades. One obvious question is whether its emergence further segregates Muslims from Western values and norms, creating a financial ghetto. An alternative view is that as increasing numbers of people in the West are dissatisfied or sceptical about the banking services they receive, and see them as exploitative or even unethical, the emergence of Islamic banking with its own distinctive morality results in Islam projecting a much more positive face. Many Western bankers view Islamic finance as a curiosity, and perhaps even a business opportunity, but seldom as a threat comparable to that from Muslim extremism. Indeed Islamic banking and finance can be regarded as a gentler side of Islam, and one in which those from the West can engage in dialogue with Muslims about.

Technology for Islamic Banks: a Growing Challenge!

This article is published in 2005, 3 years later it still has some valuable points. IBFN (Admin)

Finding modular and modern architecture capable of servicing the needs of the Shariah-conscious remains a daunting task. This article looks at the challenges and options for Islamic banking software.