In some jurisdictions, notably Saudi Arabia, banks are not permitted to use the word Islamic in their title, as firstly it might imply that the other banks are not Islamic, and secondly it might be perceived as making money through a kind of exploitation of religious belief. There are also some countries, notably Nigeria, where the division of the population on religious lines means that using the terms Muslim and Islamic might be seen as divisive, and this is therefore prohibited for bank titles. The majority of Shariah scholars however see no problem with using the word Islamic to designate a bank, as this provides a signal concerning its methods of operation. As non-Muslims can use Islamic banks everywhere, the term Islamic does not imply religious exclusion. In the United Kingdom the Financial Services Authority require banks designating themselves as Islamic to have a Shariah advisory board. This seems sensible in the interests of consumer protection and product credibility. The problem is where an institution designates itself as Islamic without a board of named and qualified Shariah scholars, as has happened in the past, even in the United Kingdom. With this proviso, I personally see no problem in the Islamic designation. PROFESSOR RODNEY WILSON: I’ve gone on record in stating that, after 40 plus years, Islamic banking no longer needs the ‘crutch of Islamic’ for growth and development, hence, the substance of ‘ethical banking’ will take over the form of the religious defining label. I’ve not come across Hindu Banking, Christian Banking, Buddhist Banking, etc… For those who seek to call a ‘spade, a spade,’ and use examples of their home Muslim country, with encouragement from the top-down of Malaysia, where the minority non-Muslims are participating in Islamic banking, may I suggest to look at the situation in the larger OECD countries, where Muslims are a small minority, and trying to get a meeting/lobby politicians/regulators on ‘Islamic banking’ becomes a difficult exercise, especially during ‘events’ in the Middle East. If we are to look at some of the most successful banks in Islamic banking, like Kuwait Finance House (KFH), Gulf Finance House (GFH), Al Rajhi, National Commercial Bank (retail), we do not see the word ‘Islamic’ in the title. One of the most successful international Islamic Banks, Bahrain’s First Islamic Investment Bank (FIIB), changed its name to Arcapita. Additionally, one of the most successful western banks with an Islamic subsidiary is HSBC Amanah, no Islamic label here. Finally, some of the new banks, Bank Albilad, Boubyan Bank, etc…, or do not have Islamic in title. What about the entity created to address secondary market trading for Sukuk, Liquidity Management Centre (LMC) no Islamic label here? In Turkey, political issues aside, Islamic banking is referred to as Participatory Banking, and the essence of the word ‘participation,’ conveys the inclusionary nature and universality of ethics in Islamic finance for all those interested. I view it as the following: (1) those entities satisfied with home [Muslim] country, then ‘Islamic’ banking works; (2) for those interested in offering Islamic banking in, say, India (with 150M Muslims), China (40+M) or Russia (20+M), Participatory Banking may be the ‘way to the watering hole’; and (3) for those with global aspirations, Arcapita or KFH, one can make money for shareholders and investment account holders and undertake ‘financial dawah’ without calling it Islamic. Thus, I view Islamic banking as requiring a branding exercise, where, the label will let Muslims know its Islamic banking and non-Muslims will not have an immediate emotional/gut reaction, and not bother to learn about the substantive ethical nature of Islamic finance, which is consistent with their faith’s teaching, except not yet codified ‘faith and finance.’ RUSHDI SIDDIQUI: While Islam’s message is one of unification, I find the use of the terminology “Islamic” finance somewhat, albeit unintentionally, disunifying in that it can be misread as something exclusive for Muslims. Good business and finance practices are for everyone, and we are fortunate to have the foundation and basis of the same in the guidance of the Quran and the teachings of the Prophet. SALIM MANZAR: My only concern that in replacing Islamic with some other terminology i.e. Riba, Shariah etc…, it may not accurately represent the Islamic finance which has been sanctioned under Islamic jurisprudence. This is because riba free, shariah only forms some of the components of Islamic finance. MOHAMED RIDZA: |