Sharia Banking is Bad Islam

October 18th, 2011 at 2:40 pm | 8 Comments |

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At Huffington Post Canada, Tarek Fatah explains why the Canadian experiment in Sharia banking has collapsed:

The leading promoter of Sharia banking in Canada, UM Financial Inc. has gone into receivership without much fanfare. None of the nation’s newspapers have bothered to report the development, despite the fact it could possibly affect hundreds of homeowners. Had it not been for a tweet by an affected Muslim homeowner looking for a lawyer, the story of UM Financial going broke would have escaped even the scant attention the news received on social media.

Islam’s essence is its quest for equality and social justice. Muhammad Saleem says that any banking or economic system that purports to be “Islamic” — including the current crop of Islamic banks — should answer two questions: By supposedly staying away from interest and sharing risks with their clients, were they able to help make the economic system more just, fair and equitable, and honest?

The proponents of Sharia banking rest their case on many verses of the Holy Quran, which in their interpretation outlaw any business or personal financial transaction involving interest. There is no unanimity among the Muslims who, in voting with their feet and chequebooks, have overwhelmingly rejected banks that operate in a supposedly interest-free environment.

Most Muslims can see through the fog of deception, but we are a billion strong worldwide, and even if a small minority falls prey to the Islamist propaganda, there is lots of money to be made.

Click here to read the full piece.

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8 Comments so far ↓

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  • Southern Populist

    We can only hope that the interest free Sharia banking concept will take off worldwide.

    My hat’s off to the segment of the world’s Muslim community that opposes the de facto slavery known as debt usury.

    The Christian world abolished debt usury for centuries, and for good reason; enslaving people to interest payments is un-Christian and contrary to the public good. Unfortunately, the Christian churches have gone backwards on this matter.

    - DSP

    • hisgirlfriday

      Not just Muslims and Christians, but Jews too! All Abrahamic religions command their adherents to avoid usurious practices in their texts.

      It’s a shame that all of our societies seem to have forgotten the lessons Moses taught us whether it’s the issue of usury or worshipping golden calves.

      • Houndentenor

        The Bible forbids the charging of interest. Don’t make me search for it again. It’s easy enough to find a site that will pull up all the relevant verses both from the Hebrew scriptures and the New Testament. I have no idea what’s in the Koran but it sounds like it’s similar.

  • Graychin

    I’m not qualified to say what is “good Islam” and “bad Islam.” There even seems to be considerable difference of opinion on the subject among devout and observant Muslims.

    Which makes Muslims not all that different between Christians and Jews.

    I can’t speak for Jews either, but we Christians deal with the clear Biblical ban on usurious interest in the easiest way imaginable. We ignore it.

    Can a bankster still go to heaven?

  • chephren

    I couldn’t find any numbers in this story to indicate the size of UM Financial’s bankruptcy. According to UM Financial’s website, the company was financed with a credit line of $120 million from a credit union.

    Odd that a Sharia bank was funded by non-Sharia practitioners of usury. The credit union must have earned interest on their loan to UM.

    The asset value of the Big 5 Canadian banks (about 90% of the Canadian banking sector) exceeds $2.5 Trillion. Bank capital is about $250 Billion.

    UM Financial’s capital base was less than 1/20th of 1 percent of the Canadian banking industry – not even a rounding error.

    This isn’t a story.

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  • forgetn

    Islamic banking is different philosophically than is what we have in our Judeo-Christian banking traditions. Part of the dilemma is that few institutions anywhere in the world apply truly Islamic. Born in Pakistan more out of political necessity, than any real demand. The problems of Islamic banking is that it is a solution in search of a problem (very much like British motor engineering of the 60s and 70 — if you allow the loose analogy)

    The fundamental problem is that Islamic banking is more like venture capital (that’s why it works better in trade transactions). The fundamental concepts of Islamic finance are interesting (as a philosophical discussion), but really not applicable to the real world experience of the 21st century.

    Why it failed in Canada — because it has no business being there in the first place. Canada is not a Muslim nation, doesn’t have a Muslim tradition, and finally, because of the concept of “partnership” the cost of Islamic banking is prohibitive.