Sharia banking goes bankrupt

[Badlun]

There is no Sharia in Islam and there is no Sharia banking. Religion has nothing to do with Economics, finance or banking. Religion is only for beleifs, worship and morality. Whatever we have in Quran against the usury is on moral grounds, nothing to do with financial system. This so called Sharia banking is just some different concept of banking with mushareka and mudareba modes of financing which have its counterparts in the general banking.

Even the concept of banking is modern. How can you make something Islamic which never existed in the early days of Islam or the life time of the prophet Muhammad.

[emkhan]

Sharia Finance to be better called , it is something that is most hated by the Americans and European governments and it is along the most serious threats to the United (looser) States of America registered on their top hit list its Sheikh Usman Taqi (hz) the writer and the first scholar who wrote the basics for Islamic Banking from Quran and Sunnah.It was interduced in many countries like in UK, USA,Germany , France,Indonesia,Malaysia and and.

Its a away of Investment/Banking which has only postive results for the costmers there are no fears that these Banks will play with their money to rise their loans or wins.There money is free from tax and interest.

A good way of Banking which is according to the laws of Allah.

Brother, his name is Mufti Taqi Usmani and he is considered to be the top scholar in Pakistan. I have read his book when I was in Pakistan. His book is on Islamic finance. This is a very comprehensive book in which he has touched all the topics in a very easy and nice way according to Quran, hadith and fique.
But brother I have a question, whenever I have been to an Islamic bank in Pakistan and asked them whether it is really an Islamic banking or just in words ? "Their answer is always, there is no Islamic banking in the world, except of a few things, everything is based on interest"
I am not saying that Islamic banking is not possible but the current Islamic banking is just fake.

[ozymandias]

http://islamicamagazine.com/?p=764

http://ifresource.com/2008/01/05/int...i-taqi-usmani/

Islamic Banking System Resists Financial Crisis - YouTube

You are aware that charging interest had nothing to do with the financial crisis, right? The crisis was that banks lent money to unreliable borrowers, and then *SOLD THE LOAN*, resulting in people owning loans that were defaulted on. This could still occur under Sharia banking laws.

[ozymandias]

There is no Sharia in Islam and there is no Sharia banking. Religion has nothing to do with Economics, finance or banking. Religion is only for beleifs, worship and morality. Whatever we have in Quran against the usury is on moral grounds, nothing to do with financial system. This so called Sharia banking is just some different concept of banking with mushareka and mudareba modes of financing which have its counterparts in the general banking.

Even the concept of banking is modern. How can you make something Islamic which never existed in the early days of Islam or the life time of the prophet Muhammad.

From what I understand, Sharia banking goes farther than preventing usury -- it prevents all interest accounts.

[Afghanistan2010]

Brother, his name is Mufti Taqi Usmani and he is considered to be the top scholar in Pakistan. I have read his book when I was in Pakistan. His book is on Islamic finance. This is a very comprehensive book in which he has touched all the topics in a very easy and nice way according to Quran, hadith and fique.
But brother I have a question, whenever I have been to an Islamic bank in Pakistan and asked them whether it is really an Islamic banking or just in words ? "Their answer is always, there is no Islamic banking in the world, except of a few things, everything is based on interest"
I am not saying that Islamic banking is not possible but the current Islamic banking is just fake.

yes i very respect his works and they are great and very reliable i have not come around any criticsism from the scholars regarding him he is well known in pakistan,india , malaysia.

i have read also some books/parts of his books.

mashaAllah very well done.

[ozymandias]

Brother, his name is Mufti Taqi Usmani and he is considered to be the top scholar in Pakistan. I have read his book when I was in Pakistan. His book is on Islamic finance. This is a very comprehensive book in which he has touched all the topics in a very easy and nice way according to Quran, hadith and fique.
But brother I have a question, whenever I have been to an Islamic bank in Pakistan and asked them whether it is really an Islamic banking or just in words ? "Their answer is always, there is no Islamic banking in the world, except of a few things, everything is based on interest"
I am not saying that Islamic banking is not possible but the current Islamic banking is just fake.

I agree -- most of the 'Sharia banking' methods I have seen sidestep around the issue and charge interest in a way that simply calls it something else. Charging a fee for the loan based on the size, and length of the loan amounts to the same thing as interest, just with different words.

[Afghanistan2010]

You are aware that charging interest had nothing to do with the financial crisis, right? The crisis was that banks lent money to unreliable borrowers, and then *SOLD THE LOAN*, resulting in people owning loans that were defaulted on. This could still occur under Sharia banking laws.

yes but it was more than this my good friend, it was that they sold for exampel the insurances (AIG sold them to CEO ) so one house was insured by around 100 persons and so one if there was a problem AIG was going to those who insured it....and what Goldman Sachs, Lehman Brothers and many others did cant happen in an islamic system.

i suggest you to watch the Documentary , INSIDE JOB

Inside Job (Documentary) trailer HD 8-10-2010 - YouTube

[ozymandias]

yes but it was more than this my good friend, it was that they sold for exampel the insurances (AIG sold them to CEO ) so one house was insured by around 100 persons and so one if there was a problem AIG was going to those who insured it....and what Goldman Sachs, Lehman Brothers and many others did cant happen in an islamic system.

i suggest you to watch the Documentary , INSIDE JOB

Inside Job (Documentary) trailer HD 8-10-2010 - YouTube

Clearly another thing you do not understand. What happened was that these companies would take a collection of loans, or mortgages, or insurance policies, and bundle them together, and sell these bundles to other companies. What they were doing was trading the rights to the monthly payments to another company (or collection of companies). The insurer would still be responsible for any claims, there was never any issue with that.

This can happen with non-interest based accounts, as long as there is a promise of future payments, those payments can be sold. Unless there is far more to Sharia banking than the linked articles prohibiting these sales suggests, it is susceptible to these flaws.

The problem was that people were loaning money to people that could not be trusted to make payments, leaving the people that bought the bundles owning worthless loans. There was never any doubt who had to insure properties.

[akbarkhan]

peasants shouldn't be charge interest. The rest of you need to start thinking practically. You don't have a problem raising your children in a country where half of the peoe walk half naked in the streets but you don't want to pay interest because it's haram. Whatever..
And tormana there is nothing to smirk about.

Do you even know why Ribba/Interest/Usury is Haram or you talking hooey again?

Islam advocates joint enterprise meaning that a transaction is only valid if and when all parties share profit/loss. In an interest based transaction there is only one winner, the party who has capital therefore it is not fair and just. Ever wondered why in America 10% of the population owns 90% of the wealth and the top 1% owns 38%?

Not to forget the fact that fiat currency is Haram as well because it is not backed up with any commodity - all the CAD you have in our little purse is just paper - plain worthless paper which is produced like toilet rolls under the guise of quantitative easing!

[graveyardofempires]

Bla bla bla me toramakhay trying to build my failing case against muslims

[sanman]

DaZahroJaam[/B]] peasants shouldn't be charge interest. The rest of you need to start thinking practically. You don't have a problem raising your children in a country where half of the peoe walk half naked in the streets but you don't want to pay interest because it's haram. Whatever..
And tormana there is nothing to smirk about.

Well, I'm sure you've heard of Grameen bank, which was founded in an Islamic country, so obviously it's going to be compliant with Islam.

You have to remember that one of the ways to pull people out of poverty is to allow them to borrow capital. If people can't have access to capital through borrowing, it can impinge upon their ability to rise. But it may be necessary for capital-providers to charge for doing so, and that's what interest is. So unless you have some magical unlimited supply of capital available for others, those whose business is to provide capital are going to charge for it.

What's necessary is to educate those who provide capital, and teach them to be mature in how they handle money. A loan is not supposed to be a gift - it is supposed to be paid back, and the lender may charge interest to cover their cost of capital.

[ozymandias]

Well, I'm sure you've heard of Grameen bank, which was founded in an Islamic country, so obviously it's going to be compliant with Islam.

You have to remember that one of the ways to pull people out of poverty is to allow them to borrow capital. If people can't have access to capital through borrowing, it can impinge upon their ability to rise. But it may be necessary for capital-providers to charge for doing so, and that's what interest is. So unless you have some magical unlimited supply of capital available for others, those whose business is to provide capital are going to charge for it.

What's necessary is to educate those who provide capital, and teach them to be mature in how they handle money. A loan is not supposed to be a gift - it is supposed to be paid back, and the lender may charge interest to cover their cost of capital.

Exactly. Interest is the fee you pay in return for the lender accepting the risk of you using their money.

[akbarkhan]

Exactly. Interest is the fee you pay in return for the lender accepting the risk of you using their money.

The lender which are mainly banks or building societies never lose because they always secure the principle by owning a borrowers tangible asset(s) during the term of contract.

Because the risk of losing money is always eliminated in a interest based transaction, Allah swt has forbidden it.

Allah says "don’t shut this door because if you shut this door I am not going to open it". This door is the door to risk, through which Allah causes some to suffer loss and other to make gain, so that He can distribute and redistribute wealth, so that wealth could circulate through economy. But when this door is shut i.e., when the economy is based on Riba (lending and borrowing on interest), the rich will always remain permanently rich and poor will remain permanently poor.

When the rich (bankers, hedge fund managers etc) suffer a superficial loss during an economic cycle i.e. a recession they get the government to bail them out. Who is paying for the bail out? The poor - through their taxes!

Think about the entire cycle and look at the bigger picture - the world would be a better place without riba.

Also note that islam advocates joint enterprise where both parties share profit/loss, isn't that a fair and practical approach to business?

[sanman]

Exactly. Interest is the fee you pay in return for the lender accepting the risk of you using their money.

It's actually more than that - it's "opportunity cost"

ie. If I didn't lend that sum of money to you, I could have done something else with it to benefit myself. But because I'm lending that money to you, I'm foregoing other opportunities.

[ozymandias]

The lender which are mainly banks or building societies never lose because they always secure the principle by owning a borrowers tangible asset(s) during the term of contract.

But there is a risk, and cost to that as well. There is no guarantee, for instance, that a house will be worth the same in 25 years as now. What if the market crashes? Or the biggest employers leave an area? Or the occupant does not maintain it? Not to mention the fact that the lender is taking a risk by tying up their assets. They are risking that no better investment will come along for them.

Because the risk of losing money is always eliminated in a interest based transaction, Allah swt has forbidden it.

So you are not allowed to make safe investments? That's silly.

Allah says "don’t shut this door because if you shut this door I am not going to open it". This door is the door to risk, through which Allah causes some to suffer loss and other to make gain, so that He can distribute and redistribute wealth, so that wealth could circulate through economy.

You can circulate wealth without requiring risk. In fact allowing loans and investments is the best way to do so, as any person with a good idea will have access to funding to act on it, no matter how poor they are to begin with.

But when this door is shut i.e., when the economy is based on Riba (lending and borrowing on interest), the rich will always remain permanently rich and poor will remain permanently poor.

And that's exactly backwards. Borrowing money is one of the best ways to stop being poor. Borrowing money for a home, for instance. I pay the same amount on my mortgage as I was for my apartment I was renting. The difference is that after 15 years, I *OWN* my house, and if I choose to sell before then, I *own* a portion of that house, and can get some of my money back.

When I started college, I took out loans to pay for college. I am now an educated adult, with marketable skills, and am only a year from paying off my loans. I have a far better job than I would have had without a college education.

In high school, my wife took out a loan for a car. This allowed her to get a job, and work on her own, earning money at a job she could not have had relying on public transit, and she earned far more money that way.

If the lenders were not allowed to charge interest, it would have been *much* harder to get any of those loans, and in each case, the borrower was better off, and able to climb up the wealth ladder.

When the rich (bankers, hedge fund managers etc) suffer a superficial loss during an economic cycle i.e. a recession they get the government to bail them out. Who is paying for the bail out? The poor - through their taxes!

This has nothing to do with interest. The bail-outs could, and likely would, have occured under just about any other system. That is a flaw in that the rich have lobbyists and undue political power, and is *NOT* a function of interest.

Think about the entire cycle and look at the bigger picture - the world would be a better place without riba.

False. My world, personally, would be much worse. I would not have been able to go to a good college. I would be spending the same on rent, with no ownership stake where I lived, and I would likely not have been able to afford a decent vehicle -- and I know my wife would not have been able to at the same age.

Economics can easily show that interest is a good thing, and drives an economy. The flaws in the US economy have nothing to do with interest, and everything to do with politics and lobbying. Fair taxes would level things out pretty easily.

Also note that islam advocates joint enterprise where both parties share profit/loss, isn't that a fair and practical approach to business?

In some ways it is fair, but not in others. It would make it much harder to get the startup money if the lender had to worry about losing their money. This is why certain loans are much easier to get in the US, at much lower rates. Educational loans, for instance, are much much much harder to default on. Basically, you need to die to get out of them, as many of them persist through bankruptcy. This makes them trivial to get, and at low rates.

Not only that, but if I let you use my money for the next 5 years to start your business, I am out that money for the next 5 years. I am not interested in being a partner. I don't want to make business decisions. If I cannot charge you interest, why would I lend you money?