Debunking Islamic Finance #2

Posted: August 6, 2013 in Islamic Finance, Paper money
Tags: , , , , ,

A couple of further articles showing the fallacy that is Islamic Banking & Finance;

How Sharia-compliant is Islamic banking?

“We create the same type of products that we do for the conventional markets. We then phone up a Sharia scholar for a Fatwa [seal of approval, confirming the product is Shari’ah compliant].

“If he doesn’t give it to us, we phone up another scholar, offer him a sum of money for his services and ask him for a Fatwa. We do this until we get Sharia compliance. Then we are free to distribute the product as Islamic.”

How Islamic finance missed heavenly chance

“Scholars and bankers have become more and more sophisticated in finding ways to get around the prohibition of interest and of uncertainty – and create a shadow of the conventional finance system”

Comments
  1. Field Muslim says:

    Salaamun aleikum. None of this is surprising. After all, we are dealing with “Free Markets of Islamic Jurisprudence” – the title of a journal article by Liaquat Ali Khan which appeared in Michigan State Law Review (2006), pp. 1487-1560. (The article is available here: http://msulawreview.org/PDFS/2006/6/Khan.pdf)

  2. rhannah99 says:

    I do not see a need for Islamic finance. Modernists do not equate riba with interest in modern financial markets, so that all of the cumbersome, obscure and expensive Islamic copies of conventional deposits, loans and securities are unnecessary. As for gharar, it has never been well defined by scholars and the concept is not found in the Koran. Scholars often equate it with gambling and myopically view insurance contracts as risky, failing to see that their purpose is to reduce risk! Takaful is the same as conventional insurance – if you do not make the contribution (pay the premium) to the coverage pool, you do not get the insurance coverage. Gamblers exhibit risk preference, while insurance purchasers exhibit risk aversion.

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