Choosing The Right Option

It is interesting that one conversation I had recently on why there is reluctance acceptance by some Muslims on accepting Islamic Banking products and transaction in their everyday lives. A huge number of Muslims still subscribe to the non-Islamic, riba-based products despite the inroads made by the Islamic Banking industry in coming out with innovative, if not similar products to conventional banking. More importantly, some Muslims still comes up to me and tells me that they do not believe in Islamic Banking products and that the products are a sham or a “hilah” to legitimize riba-based practices. There is no true Islamic Banking products, as most of the products mirrors conventional products, while the remaining products requires substantial documentation and has a higher cost to implement than its conventional competitor. The view is that, if the Islamic Banking products is a sham, then it will be no better than its conventional competitor.

This comes as a surprise as although they are Muslims, their opinions are somewhat harsh on the industry that I feel very attached to.

Someone made a comment that he cannot understand why Muslim puts a lot of emphasis in “pure & clean” food, but do not apply the same concern to the their daily banking transactions. In fact, Riba is the most hated crime in Islam, and even the AlMighty has declared “war” on Riba, and no other sins are accorded such privilege. There are 73 doors to Riba, and the door with the least sin on Riba is equal to the sin of incest between mother and son. To go against Riba-based banking is a fight called upon to all Muslims, and this means total rejection of the conventional banking.

My argument will be that the Islamic Banking is only 3 decades old in some parts of the world; conventional banking has been around much longer. There is a long way to go, and there is a lot of infrastructural work to be done; legal, taxation, land offices, government agencies, central bank regulations. Everything is near greenfield, everything needs to be developed. There will be frustration but it needs to be done and it takes time.

Islamic Banking industry, and its products are not perfect, and no one is claiming as such. There will be a development and gestation period that the industry needs to go through. Outsiders may feel that what has been developed is not good enough, but the internal workings has been in development to satisfy all parties interested in Islamic Banking. Some we replicate from an existing conventional platform to suit our own requirements. There are also various efforts to develop something on our own, instead as just staying as an alternative proposition.

Operational Challenges

A friend said to me, in bafflement of why some of the Muslims still criticize Islamic Banking instead of supporting it, that even if only 10% of the product or service is Islamic, it is still better than 0% that you get under a conventional product. That 10% showed commitment to the industry. 10% is more than nothing. 10%, if that is all it is, it is more than enough for me simply because it is an Islamic alternative to riba-banking.

What we need are solutions, not just highlighting of problems. It is long way ahead for us practitioners but that is part of the fight we have chosen in our profession. The fight to build Islamic Banking industry into a viable, standalone proposition that will benefit all customers. We hope someday the Muslim population especially will make Islamic Banking products as an automatic choice whenever they think about money and financing.