Counter Views on Islamic Banking & Finance

Islamic banking and finance (IBF) in Pakistan has become a topic of debate among religious scholars particularly for last few years. The disagreement among them has led to widespread confusion in general public and people associated with IBF in any capacity. It has been observed that views of both sides if taken in isolation can cause serious confusions and development of extreme viewpoints. However an attempt to neutrally understand both ends can lead to far lesser confusions and far more balanced viewpoints.

Following are some of the key takeaways after considering both viewpoints with open mind and heart.

1) At both sides are religious scholars who are respected for their knowledge, character and piousness.

2) Disagreements among religious scholars are natural rather than being against the spirit of Islam as long as they are aimed to obtain the pleasure of Allah, are not publicized for fragmentation of society and do prevail in a decent and respectful manner.

3) IBF cannot be called as "Haraam" like conventional banking and finance especially with reference to the strict technical meaning of the word nor it can be called the ideal Islamic system in terms of its macroeconomic fruits or may even be in terms of its mechanisms and juristic foundations etc. Out of noble intentions it is just an effort by some religious scholars to save Muslims from Riba, Gharar etc. of conventional financial institutions/products in the presence of all the limitations posed by the currently established non-Islamic system.

4) It is easy to ask for abolishing IBF but it also needs to be kept in consideration that as long as some other alternate for mass level implementation is not available as an immediate replacement, Muslims at least in the transition phase would be left with conventional financial institutions only that involve Haraam on the non-permissibility of which there is no disagreement among religious scholars.

In the light of these insights the implications for general public and those associated with IBF are as follows.

1) Refrain from attacking the intentions of either side or using any inappropriate words and statements for them.

2) Refrain from becoming a party in these technical debates of religious scholars without the required knowledge.

3) Refrain from using words such as "Haraam" for IBF as the word has specified technical meaning in Islamic Jurisprudence. Similarly the use of words such as "Fraud" for IBF also is not appropriate. The word fraud carries a significantly negative meaning which definitely is not appropriate to be associated with anyone without proof.

4) Avoid accounts of exaggeration related to IBF by portraying it as the ideal and perfect Islamic system from all possible dimensions.

5) Those who are not equipped with relevant knowledge such as layman should not be confused by these disagreements. They can be asked to simply follow the group of religious scholars whom they trust more for their knowledge and piousness.

6) Those who are equipped with relevant knowledge should strive for the improvement of IBF through constructive criticism, suggestions and recommendations or should work for alternatives that they think would better serve the purpose.

Below is my personal collection of resources containing viewpoints of both groups of scholars, those who favor IBF and those who do not. Though the debates are purely of technical nature and require deep knowledge particularly of Islamic jurisprudence but the collection can still serve as useful for those who are interested in the deeper study of this area.

Statement of intellectual honesty: I personally have not read all of these works word by word. Any changes, recommendations, suggestions and corrections are always welcome particularly with reference to my views above.

Credit to Prof. Dr. Asad Zaman for his invitation to participate in his noble knowledge dissemination endeavors.

SYED ALI KAKA KHAIL