A Saudi billionaire who heads a key Arab Islamic bank has proposed that Shariah-compliant banks worldwide change their name to “Ibrahimi banks” as an indication that other key religions also prohibit usury.
Saleh Kamel, one of the richest businessmen in the Arab world with an estimated wealth of more than $five billion, said the name of Islamic banking shows that Islam bans only usury but its economic principles are much wider.
The owner of Dallah al Baraka Islamic banking group was speaking on Monday at a seminar at the Saudi Jeddah Chamber of Commerce and Industry, which he heads, according to the London-based Saudi daily Alsharqalawsat.
“It is unfair that Islamic economy is squeezed in Islamic banking to prohibition of usury because it is much wider and more comprehensive,” he said.
“Usury is prohibited by Islam as well as Christianity and Judaism…hence these banks should be named Ibrahimi banks since these three religions are affiliated to Ibrahim, the father of prophets (peace be upon him)….we have no right to deny Christians and Jews their right in prohibiting usury,” he added, referring to the ancient prophet, known in Islam as Ibrahim and in Judaism as Abraham.
Shariah-compliant banks are based on profit-sharing principles and activity that is consistent with the principles of Islamic law http://en.wikipedia.org/wiki/Sharia and its practical application through the development of Islamic economics http://en.wikipedia.org/wiki/Islamic_economics.
Islam prohibits the fixed or floating payment or acceptance of specific interest or fees (known as riba http://en.wikipedia.org/wiki/Riba, or usury http://en.wikipedia.org/wiki/Usury) for loans of money.
Investing in businesses that provide goods or services considered contrary to Islamic principles is also forbidden. Although these principles http://en.wikipedia.org/wiki/Principles have been applied in varying degrees by historical Islamic economies due to lack of Islamic practice, only in the late 20th century were a number of Islamic banks were formed to apply these principles to private<http://en.wikipedia.org/wiki/Private_bank> or semi-private commercial http://en.wikipedia.org/wiki/Commercial_bank institutions.
Islamic banking has the same purpose as conventional banking: to make money for the banking institute by lending out capital. Because Islam forbids simply lending out money at interest, Islamic rules on transactions have been created to avoid this problem. The basic technique to avoid the prohibition is the sharing of profit and loss, via terms such as profit sharing http://en.wikipedia.org/wiki/Profit_sharing> (Mudharabah), safekeeping (Wadiah), joint venture http://en.wikipedia.org/wiki/Joint_venture (Musharakah), cost plus (Murabahah http://en.wikipedia.org/wiki/Murabaha), and leasing http://en.wikipedia.org/wiki/Leasing (Ijar).
“It is important that we all comprehend and understand the principles of Islamic economy and present it to the entire world as a gift…capitalism economy which is based on greediness has nothing to do with any religion,” Kamel said.
“All those three main religions advocate justice and an economy that is based on fairness…unfortunately, when we created Islamic banking 30 years ago and achieved some success, they called us crazy…no one had expected Islamic banking to reach this level of assets of more than $two trillion handled by at least 500 Shariah-compliant banks worldwide.”
Kamel said he had explained Islamic banking to German Chancellor Angela Merkel when he met her at the chamber just after the 2008 global fiscal crisis.
“I quoted to her the famous saying by our Prophet Mohammed (peace be upon him) that ‘do not sell what you do not have’….I believe she was convinced of this point, prompting us to present her with a paper detailing the principles and rules of Islamic banking….after her return to Germany, she issued a law banning short-selling activities,” he said.