Deliberations of 7th International Conference on Islamic Economics
Just as Islamic Ideology is based on extinction of shirk Islamic Economics is based on extinction of interest. But distinguished speakers on Islamic Economics did not even mention the need of eliminating interest from Muslim world plagued with interest-based system.
According to the deliberations of First such Conference held in 1976 interest must have vanished and banned in Muslim countries long ago. Contrary to those deliberations interest-based banking is flourishing and interest remains lawful in Muslim countries. About 300 so-called Islamic banks and financial institutions have emerged which are supplement to and not substitute of interest-based banks. They do not give loans and at times borrow money on interest and also earn interest on excess liquidity. They are making good money through fake Murabaha transactions. Their Shariah advisors hold whatever they do to be Shariah-compliant! Shaikh Saleh Abdullah Kamel a pioneer in Islamic banking and founder of Al-Baraka Islamic Bank has recently said on BBC TV channel that 90% of present Islamic banking is wrong. It is not understood why Islamic economists do not realise that interest cannot be eliminated without providing interest-free loan facility to loan seekers just as illiteracy cannot be eliminated without providing schooling facility to every child. In extremely short time allowed in two sessions of the conference I brought the following points to the attention of the elite gathering to which nobody responded:-
"Interest-bearing loans and profit-sharing were the financing modes that prevailed in pre-Islamic days. Islam prohibited interest and permitted profit-sharing to continue. As loan is indispensable need of mankind and profit-sharing cannot meet the needs of all sectors of society for loans Islam highly commended interest-free lending by way of a hadeeth qudsi declaring reward for qard is eighteen times implying that Islam wants widespread use of interest-free loans in society. Borrowing money by Muhammad saws and investing borrowed money in business by several sahaba karam ra and Imam Abu Haneefa ra prove that interest-free debt-based system is desirable in Islam. Regrettably contemporary Islamic economists ignore these facts and say profit-sharing is ideal Islamic alternative of interest and denounce debt-based system even if it is interest-free. It is like condemning nikah alongwith zina! Late Prof. Shaikh Mahmud Ahmad was perhaps the only participant who took seriously the deliberations of the First Conference on Islamic Economics held in 1976. Accordingly he strove for finding a substitute of interest-based banking and produced a commercially viable interest-free banking model based on his novel concept of Time Multiple Counter Loan – TMCL. This model can provide all modern banking services and interest-free loans on wide scale and as such it can easily replace conventional banking without any disruption. Information on working details of this model and its benefits for Muslim Ummah is available on my website: www.realislamicbanking.com It is the moral and professional duty of Islamic economists and bankers to either devise a better alternative or support and adopt TMCL model for replacing conventional banking."
Recipients of this discourse are requested to ponder on it and the attached 2 page Word document on 'Basic Principles and Methodology for True Islamic Banking' and comment on them. Wassalam,
11th May 2008