Karachi: I have watched on TV few protestors at Wall Street carrying banners and placards inscribing adoption of Islamic banking and financial system and end of Capitalism and free marketing economy. And this made me realizes how Islamic banking is flourishing and attracting people from conventional and interest based banking not only in the countries having Muslims majority but also in different countries.
These views were expressed by Syed Rashid Rahman, CEO of MCB Islamic Banking in an interview with TheNewsTribe.
Bankers, economists and investors are looking on Islamic economic system as an alternative because they have realised that the emerging system can be an alternative after capitalism system has disappointed masses.
Auditing and Accounting for Islamic Financial Institutions (AAOIFI) is the global platform for economists, bankers and business tycoons where they develop products as per Shariah standards for promoting Islamic banking system in the country.
Islamic banking has been emerging overwhelmingly on the surface of earth because of its nature, modes of services and products offered by different banks.
The industry is in the emerging face with a significant potential to be explored with the passage of time as Islamic banks are designing new products and services for different requirements of different segments of customers.
Islamic banking has been expanding all over the world with its emerging products and concept without interest. It is purely interest-free banking system and based on the concept of Shariah laws of Islam.
Islamic banking is ‘Halal’ whereas conventional banking is ‘Haram’. The Islamic banks are regulated by separate banks of State Bank of Pakistan, which not only audit banks’ accounts but also conduct Shariah audits in accordance with teaching of Islam.
We have nothing to do with conventional banks in operational and commercial aspects whether Islamic banks are named with different banks as if MCB Islamic Bank.
There is no such coordination between MCB Bank and MCB Islamic Bank in anyway.
Islamic banks don’t do business with interest-based banks and financial institutions. They don’t invest in T-bills and PIBs and they don’t work with companies’ trade or manufacturer products, which are declared ‘Haram’ by the religion.
Islamic banks deal and trade with each other. They make their investment in sectors, which have nothing to do with interest-based business or ‘Haram’ products.
Islamic bank products are also different because they offer investments through different certificates and mutual funds. Similarly, there are different modes of loans for exporters, house and car financing. The banks do not deal in credit cards and prize bonds.
Whereas services such as cash transactions, draft order and cheque clearance are the same as conventional banks’.
The potential of Islamic banking is immense in future with tremendous expansion and success of the industry will continue to serve customers and business in Pakistan.
There are a number of investors and account holders shifting speedily towards Islamic banks from conventional banks, which is an encouraging sign for the industry.
Islamic banking is playing a vital role in the economy as it is attracting a number of unbanked population towards the banking system. The financial inclusion has multiple advantages for any economy as the saving habits will improve in the country whereas businessmen will expand their work through interest free loans.
The widening base of customers and investors will surely expand the industry that will ultimately give impetus to business and banking system of the country along with employment and revenues
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