I am not clear about the concept of Islamic banking introduced in Pakistan. From what I have studied, it looks to me that the new system is actually not Islamic. They are just using the Islamic/Arabic terminology to mislead people and have also introduced lengthy paper work to make all the interest bearing products as Islamic products. Our Muftis are helping them against payment of huge stipends. (I may be wrong and want to correct my perception). I am strictly against Riba and when I tell my friends, they ask about the alternatives or solutions. Here, I do not have anything to say to a person who is employed somewhere with limited salary and no spare time to do or participate in any Halal business beside the trust factor in investing as a silent partner. Please help/guide me in answering these three questions according to your understanding of Islam.
1)Is the current Islamic banking and their products Halal and How?
2)Can we recommend some alternative investment plans to small investors which are Riba free and secure?
3)Can you refer a good book / web source / article to learn in detail about this issue under current economic situation?
Answer
The answers to your questions are as under:
i. The contemporary Islamic Banking is, in our opinion, partly correct from Islamic point of view and partly not. They heavily rely on Murabaha and Leasing for their business. We think Murabaha is not Islamic whereas Leasing is. So at the moment Islamic banking is doing fifty percent correct business from Islamic point of view.
ii. Islamic funds run by UBL, Atlas Fund, Meezan Bank etc are an Islamically correct form of investment. However, since it is based on stock exchange, there is no guarantee that people would always get positive returns on a regular basis.
iii. I have written a few articles and answered a few questions on the subject on my site www.khalidzaheer.com
Dr Khalid Zaheer is an Islamic scholar and academic. He has a Ph.D. from the University of Wales. His Ph.D. thesis was a critique on Islamic Banking. Dr Kahlid also had an intensive formal religious education in Islam. He studied Quran from Dr. Israr Ahmed, Mawlana Amin Ahsan Islahi, and Javed Ahmed Ghamdi. He also went through a formal two years course on Arabic and Islamic learning from Al-Mawrid, in 1983-84.
Dr. Khalid Zaheer has a deep and incisive understanding of the very relevant issue of Islam and modernity and has taught courses on Islamic ethics, traditions and economics etc. at various top national institutions, including the Aga Khan University, Lahore University of Management Sciences (LUMS), University of Central Punjab, Hailey College of Commerce, information Technology University, and Institute of Art and Culture.
Dr Khalid Zaheer has also delivered various lectures on Islam in UK, Canada, Australia, Malaysia, Japan and many prestigious institutions of Pakistan. Including Civil Services Academy, Administrative Staff College and PAF War College.
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