I have been reading on the rise in Islamic banking since the World Islamic Banking Conference was set up and started meeting 14 years ago. It seems that banks like Citigroup, HSBC, Deutsche Bank, Morgan Stanley and Goldman Sachs are all incorporating Islamic banking in their institutions. All I know about sukuk is that it is only permitted to invest in halal products, prohibits riba (usury) and hoarding of wealth and makes makes zakat compulsory (2.5% of all profit to be donated to social charity or welfare schemes). How does this affect present day banking practice? What would be the impact?
Correct it if I am wrong, Islam forbids charging interest on lending money, perhaps because at the time of Mohammed (peace be upon him) money lender were charging loan shark rates and causing lot of misery among poor people. So, in order to charge that interest, the financial institutions have come upon with all sorts avenues with the blessings of a lot of mullahs since the old days. That does not change too much in international banking practice - otherwise a lot of poor countries with large Muslim population would have benefited by now. Greed never ends...
It would be impossible to say without knowing just how much money is involved. Otherwise, it would just a wild unsubstantiated guess.
Okay. Here is what I obtained from the news http://www.bankingtimes.co.uk/13122007-islamic-banks-aim-to-expand-into-europe/ http://www.iht.com/articles/2007/11/22/business/islamic.php
NOW we've got something to start working with! Please Register or Log in to view the hidden image! To answer the original question, though, we'd have to also know what their assets are without that money. No doubt that it's helpful to the economy - but the question of how much still remains.
They are banking in sovereign funds. http://business.timesonline.co.uk/t...ectors/banking_and_finance/article2752048.ece
The Christians were forbidden to charge interest on money for many years, and relied on the despised Jews to handle the moneylending. That started to become awkward, as the Church became a wealthy landowner, and the Bible found new interpretation. It is beginning to become awkward for the Muslims to continue to rely on the Christians to handle their moneylending, as they become wealthy landowners. My guess is that interpretations of the Koran will be found, and workarounds established. If so, the amount of money involved will be about the amount of money used to buy oil between 1950 and 2050. Arrangements will be made.
Islamic banking is going bye bye as central banks take over the Axis of Evil countries America deposes.
