Is this the death of sharia finance?

Gulf News

Qatar’s central bank has ordered commercial banks to close Islamic banking operations by the end of 2011.

Australian Assistant Treasurer Senator Nick Sherry must be heartbroken…..

Qatar’s central bank has ordered commercial banks to close Islamic banking operations by the end of 2011. The central bank reportedly issued a circular on February 1, saying “it has been decided to terminate the activities of the Islamic finance services” offered by conventional banks. The order is effective immediately but provided lenders with a grace period until December 31 to shut Islamic banking operations.

Banks affected by the directive include Qatar National Bank, HSBC, Doha Bank, Commercial Bank of Qatar, Al Ahli Commercial Bank and International Bank of Qatar.

Related:


Ban on conventional banks offering Islamic banking services sets wrong precedent, they say

Dubai: Qatar’s decision to ban conventional banks from offering Islamic banking services has shocked banks in the UAE.

Although many bankers said they do not expect a similar action in the UAE, many said it is setting a wrong precedent and the decision has created uncertainty in banking business in the region.

Qatar’s central bank has ordered commercial banks to close Islamic banking operations by the end of 2011. The central bank reportedly issued a circular on February 1, saying “it has been decided to terminate the activities of the Islamic finance services” offered by conventional banks. The order is effective immediately but provided lenders with a grace period until December 31 to shut Islamic banking operations.

Banks affected by the directive include Qatar National Bank, HSBC, Doha Bank, Commercial Bank of Qatar, Al Ahli Commercial Bank and International Bank of Qatar.

Clarification

“We are communicating with the Qatar Central Bank to seek clarification on this issue,” HSBC said in a statement.

Many bankers said they are intrigued by the development as barely seven months ago the QCB Governor, Shaikh Abdullah Bin Saud Al Thani, inaugurated HSBC’s Islamic bank branch in Doha.

Conventional banks such as Standard Chartered and Mashreq that have Islamic banking divisions in the UAE did not comment on the development in Qatar. However, many bankers said such decisions will have far reaching consequences on international participation in Islamic banking business in the region. “It will have an adverse impact on the confidence level in the banking industry and restrain asset growth and innovation in the sector,” said a senior banker.

The decision would mean all conventional banks in Qatar that have Islamic assets on their balance sheets will have to wind them down by December 31, 2011. It is unclear if there is any plan to compensate banks that have been affected by the decision.

Analysts said the decision has huge cost implications for affected banks, many of them have built physical infrastructure and human resources over the past few years which will now be made redundant.

Currently there are 16 Islamic banking branches of commercial banks in the country.

By Babu Das Augustine, Deputy Business Editor

6 thoughts on “Is this the death of sharia finance?”

  1. SAY NO TO SHARIA!http://islammonitor.org/index.php?option=com_content&task=view&id=1128&Itemid=64

    A recent article “Islamic Finance or Financing Islamism? helps to shine a light on this conundrum.

    A recent construct from the 1970s, “Sharia finance has skyrocketed and is now the fastest growing segment of international finance with some 400 banks participating in it and close to a billion dollars under management…. Western financial institutions and even governments have eagerly jumped in the fray and most large Western banks today offer some Islamic financial products.”

    So what is Sharia finance? Alexiev says the main details are kept hidden, as “ a deliberate policy” as “ revealing the philosophy and detailed prescriptions of the obscurantist medieval doctrine called Sharia to potential investors.. would almost certainly cause a backlash against the whole concept of Islamic finance and put its very legitimacy in question…. Sharia is reactionary to the core and completely at odds with modern norms of human rights, political freedoms and international relations. It mandates, for instance, the killing of homosexuals, apostates from Islam and those guilty of adultery …. It openly discriminates against women and infidels, considers slavery legitimate, and posits offensive military Jihad against the non-Muslims as a religious obligation…. Sharia tenets permit Muslims to lie to the infidels and to bribe them to convert to Islam. It is because of its extremist nature that Sharia has become the rallying cry and core ideology of radical Islam today…. Islamic finance has very little to do with finance and everything to do with Islam. And not just any kind of Islam, but the most radical, fascist-like interpretation of the Islamic religion that has increasingly become the dominant idiom in the Muslim world. ….it is a hateful, millenarian ideology much like Nazism and communism that ultimately hopes to destroy Western civilization by whatever means necessary.”

    Well, that doesn’t sound too promising – maybe I’ll just stick to RAMS!

    Apparently Islamic finance was “invented in the middle of the 20th century by the two patron saints of radical political Islam, Abul Ala Mawdudi of Pakistan and Sayyid Qutb of Egypt” and.”was essentially a bogus concept from its inception, since it is virtually impossible to transact financial operations in the absence of interest and at least some speculation and uncertainty.. There is nothing bogus about the objectives of Sharia finance, however. It has steadfastly pursued two main goals: aiding and abetting Islamic extremism and terrorism and legitimizing Sharia as an instrument of promoting radical Islamist ideology. From the first Islamic bank founded in 1975, the Islamic Development Bank (IDB), which transferred hundreds of millions of dollars to HAMAS to support suicide bombing, to the notorious terror financier Al-Taqwa Bank and the Islamic banks and charities run by the Golden Chain group of Saudi billionaires funding al Qaeda and the like, Islamic finance has served as the life-support system for radical Islam worldwide.”

    Hmm, it’s beginning to sound quite sinister. But wait, there’s more!

    “Sharia finance has two additional highly troubling aspects. All institutions offering Islamic products are required to hire Sharia advisors to certify that they are Sharia-compliant… these experts, like the Muslim Brotherhood¹s Sheikh Yusuf Qaradawi, are radical Islamists trained and indoctrinated in the Wahhabi or Deobandi-controlled Sharia faculties in Saudi Arabia, Pakistan and elsewhere. They are the intellectual driving force behind the hateful Wahhabi/Salafi ideology of Islamism and the leading theological enablers of extremism and terrorism. By hiring such people… Western banks become unwitting sponsors of radical Islam. Second (and no less troubling) is the matter of zakat, or almsgiving, in Sharia finance…. According to the Koran, there are eight categories of deserving zakat beneficiaries and four of them… fall under the category of financial jihad, which essentially permits and legitimizes zakat distribution to extremist and terrorist organizations.. Whether they know it or not, these eager converts to Sharia finance end up becoming, at best, unwitting dupes, and at worst, willing fellow-travelers of the Islamists promoting it.”

    So before you rush to join the Sharia bandwagon, just stop to think that you might be financing your own descent into slavery! Giving up freedom and all the principles of a liberal democracy for the subjugation of Islam is just too high a price to pay.

  2. Where’s Henny Penny, when you need her?

    Maybe she is in a safe place because she KNOWS that the sky IS going to fall down soon.

  3. Anyone who did not see this comming is a fool who refuses to look. Muslims are under no obligation to follow through on any deal made with non muslims, or in mohumads words. If i make a deal and find a better one, I am not under any obligation to the first deal.

    And hey, the worlds finacial system is simply another battle field to the islamists, lets cost the kafir some money, thatll be fun. Well done appeasers, the crocadile has now bitten off your hands that were feeding it. Winston Churchill was correct 60 years ago and you didn’t listen, enjoy your comeupansance.

  4. You have all been warned. Greed will bight you on the bum everytime.

    We were screaming at Simple Simon Crean for the past two years. But, O no, what would we know? We are just the voters, you know, the ones that pay for all the politicians blunders. Why do we pay such a high price for incompetence and stupidity?

    “Make your bed, you will have to lay in it”.

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