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The Island-Features

THAT ORGY OF JUNK LOANS
introduce ethical Islamic Banking
By K. Godage

The current spate of financial scandals reminded me of the orgy of junk loans that had been given by the Peoples Bank in the period (if my recollection is right) 1992-93. I wonder as to whether any of that public money was recovered. Subsequently we had the Pramuka Bank scandal and three other scams including perhaps one of the biggest in the world have surfaced. As a concerned citizen, I am certain that I speak for thousands, we would like the Central Bank to inform us as to the action taken against those who obtained ‘junk loans’ and defaulted and also what action has been taken against those involved in the Pramuka affair?

In many respects the Central Bank has failed us as has the banking system as an instrument to assist in the development of the country. Should we not consider changing the banking laws, perhaps adopting some of the extremely good features of the Islamic Banking system which has an ethical orientation.

Islamic banking refers to a system of banking or banking activity that is consistent with the principles of Islamic law (Sharia). Sharia prohibits the payment of fees for the loaning of money (Riba, usury) for specific terms, as well as investing in businesses that provide goods or services considered contrary to its principles (Haraam, forbidden). While these principles were used as the basis for a flourishing economy in earlier times, it is only in the late 20th century that a number of Islamic banks were formed to apply these principles to private or semi-private commercial institutions within the Muslim community.

There are some features such as the non charging of interest (but only the imposition of administrative charges) which are not only commendable but should be emulated by people of all religions. There are also other features which could be adopted with advantage. What was most important of all, to mind, is that the bank which lends money for a project becomes a partner in the project; all project lending is therefore for joint ventures and the bank not only shares in the profits but has a stake in the project and would be on the board of directors and would seek to ensure its success. An Islamic tenet worthy of mention is that those with excess wealth are required to share with those less fortunate. The money deposited with a bank is placed as a trust to allow the bank to lend to those who have no resources to use such monies.

Considering the fact that the global financial crisis has been the result of reckless lending it does appear that the world has a thing or two to learn from Islamic banking. If the rules of Islamic financing had been in place, the mortgage crisis in the USA, which triggered the current financial crisis, could never have happened. If the details had been closely inspected, it would have been evident in many cases that the people taking out the mortgage would never been in a position to repay it.

Islamic law stipulates that all financing activities must be linked to a real economic transaction. “It is essential to know exactly what the transaction is based on. If someone wants to buy a house, can it be sold to him in installments? At first glance, it might look like a loan, but ultimately, it ensures that those involved know exactly what is happening,”

Similarly, instances – whereby money is earned not by selling goods or providing services, but by cleverly using capital to generate major profits would have been prevented.

The same can be said for earning interest: Islam forbids the faithful to “let money work”. There are other strict rules in the system: businesses that are not compatible with the “Sharia”, i.e. with the Islamic code of religious law, may not be financed. Naturally, it is forbidden to trade in pork, pornography, or gambling. Most unfortunately trade in hard drugs was not prohibited because such drugs or even hashish or cocaine was unknown. Those who indulge in the trade of drugs know that it is not in the spirit of Islamic law but they pocket their conscience because of the money involved. They stand cursed for they are in actual fact in violation of the law of Allah.

The ban on gambling applies not only to doing business with casinos, but certainly also to gambling-like behaviour on the international finance markets, where conventional rules of economics were abandoned and where “financial instruments” that were not even understood by many of those who were dealing in them suddenly appeared.

Sri Lanka has a few banks that indulge in Islamic banking but it is certainly time that the government appointed a new Banking Commission (the last such Commission was appointed in1934 during the days of the State Council—- the Commission was headed by Justice Pokinwala and the late N. U. Jayawardena was the Assistant Secretary of the Commission and functioned as the virtual Secretary of the Commission (as Prof. Das Gupta was unable to make himself available) to examine the state of our banking industry and to suggest ways of modernizing it. A new Banking Act which would ensure that no junk loans are given and that our banking system would play a positive role in the development of our country is an imperative.

The market value of the Islamic banking sector in Sri Lanka is estimated at LKR 70 billion to LKR 100 billion. Islamic financial services providers currently active include Amana Investments Limited, Ceylinco Islamic Investment in a Shariah compliant Corporation (CIIC), Muslim Commercial Bank (MCB), National Asset Management Limited (NAMAL), First Global Investments Group and ABC Investments

I am certain that there are experts in Islamic banking in this country; the government should include such specialists in the work of a new Banking Commission, they would be able to make an invaluable contribution to modernizing our banking system and bring it in line with our own requirements. Adopting some Islamic banking practises could also help this country to strengthen our relations with Saudi Arabia, Iran and Libya and the rest of the Islamic world in particular and of course ensure that no junk loans are granted at the instance of politicians.

A Woman in the Muslim Brotherhood | Jacksonville.com

A Woman in the Muslim Brotherhood

Submitted by t.nicole.hernandez on Mon, 05/11/2009 – 21:03.

The Muslim Brotherhood in Egypt would give more freedom for all aspects of Egyptian society, including women, if the movement achieved power in the country, a female member of the group said.

Hiba, whose name has been changed to protect her identity, is a member of the Muslim Brotherhood. The 28-year-old said she joined the party nine years ago because the party’s plans include social as well as religious and political concerns. Although the Muslim Brotherhood was founded in 1928, it remains banned in Egypt. Because of its illegal status in Egypt, the Muslim Brotherhood is not recognized by the U.S. government, although it is not listed as a terrorist organization.
While the Brotherhood is Egypt’s largest opposition party, the current government makes it difficult to join parties other than the ruling National Democratic Party, led by current president Hosni Mubarak, according to Hiba and other Egyptians. Hiba said the Mubarak regime has not allowed the Muslim Brotherhood to take the parliamentary seats it won in the 2005 elections. She added that some government branches, such as the Minister of Information, create problems for women who adhere to the Islamic dress code, even though the constitution of Egypt lists the state religion as Islam. This discrimination against veiled women, Hiba said, exists regardless of whether they are affiliated with the Muslim Brotherhood. For example, the Minister of Information controls the state-owned broadcast stations and does not allow female presenters to wear a headscarf on-air, even though adherence to the rules of hijab has recently increased among Egyptian women.

“You should judge me as a woman from my experience [and] my knowledge,” Hiba said through a translator. “Not the shape of my body.”

For Hiba, the Muslim Brotherhood’s goals of instituting Islamic law would provide benefits for women similar to those of American women, such as equality between the genders, job opportunities, free elections, more seats in ministries and Parliament, and the ability to choose what to wear without discrimination.

“American women have all these rights; I wish I had these rights,” Hiba said.

The Muslim Brotherhood has a female candidate every parliamentary election, according to Hiba. She added that the party does not restrict her from an active role just because she is a woman, and she said she would like to be a parliamentary candidate one year. However, she doubts she could abide by the Mubarak regime’s treatment of prominent Muslim Brotherhood members.

And her fear is real. Egypt’s government has detained more than 500 members of the Brotherhood without issuing any kind of charge, and the regime arrested two lawmakers from the party in August 2007 after removing their immunity, according to an Agence France-Presse article.

Even though she faces such danger, Hiba said she is honest about her membership with the Muslim Brotherhood.

“If anyone asks,” she said, “I’ll tell them [I’m a member].”

»

Muslims have right to establish Shariah Courts: Govt. to Supreme Court | TwoCircles.net

Muslims have right to establish Shariah Courts: Govt. to Supreme Court
Submitted by mumtaz on 11 May 2009 – 11:07pm.

* Indian Muslim

By RINA,

New Delhi: Responding to public interest litigation (PIL), additional solicitor general Gopal Subramaniyam submitted before Supreme Court bench comprising Justice A. R. Laxamanan and Justice Altumash Kabir, “Muslims have the right to establish Shari’ah Panchayats under their personal law.” Next hearing has been postponed for 12 weeks.

Earlier, advocate Vishwa Lochan Madan had filed a PIL requesting the court to instruct people to refrain from establishing ‘parallel’ judicial system, namely Qazi system. Government attorney today rejected the plea and said, “Neither the Fatwas issued by Shari’ah courts clash with Indian judicial system nor these courts are deemed a parallel system of justice.”

In support of his PIL, advocate Madan had cited Imrana case in which her father-in-law had allegedly raped her but village Panchayat asked the lady to take him as her husband. Later, Darul Uloom Deoband ruled that presently she cannot live with her former husband and this was confirmed by All India Muslim Personal Law Board.

Advocate Madan requested the court to declare that Fatwas issued by various authorities cannot be put in practice and direct union and state governments to take immediate steps to dissolve all Darul Quzat (Sharia Court).

Referring to article 26 of Indian Constitution, the union government pleaded in it reply to the court that religious freedom has been guaranteed for all religions and all communities, under which they can establish and run their charitable institutions including Darul Quzat or Shariah system and manage their religious affairs on their own.

The union government submitted, ‘these institutions are not a parallel system. Moreover, Darul Quzat do not stop Muslims from going to civil courts. So, the people not satisfied with Darul Quzat verdict or do not want to solve their tangle through them are totally free to a court of law.’

Converting Islamic ideals to a hip-hop flow

Converting Islamic ideals to a hip-hop flow

Caille Millner

Monday, May 11, 2009

To convert to Islam, a man or woman must pronounce the shahada, or testimony of faith, either in private or in public. The convert states that there is no God but Allah and that Muhammad is his prophet; the reason, according to the Quran, is that followers need to understand that they may not worship anything but God. Many converts opt to shower either before or after their declaration, to symbolize the repenting of sins from their previous life. Nothing more is required.

Becoming a rapper is a bit more complicated. The sheer technical skill (learning rhythm and meter, building a vocabulary, adjusting one’s voice) often requires years of practice, and then there is the not-so-small matter of developing beats and musical production. The convert to rap must also prepare to adjust his lifestyle. The most successful rappers on the market focus their subject matter and their public appearances around a small list of topics: one’s previous experiences of poverty, drugs – especially the dealing thereof – guns and/or criminal records, fast money and loose women.

The twain shall meet, however, as I learned while watching “New Muslim Cool,” a new documentary about a Puerto Rican convert, Hamza Perez, who gave up drug-dealing in exchange for Islam, but couldn’t quit hip-hop. Perez’s new life is certainly rich with subject matter – the FBI raids his mosque without giving a reason; he teaches prisoners in the county jail until his security clearance is mysteriously revoked – but it’s a different kind of subject matter, and he’s operating under different constraints. His ideal audience isn’t the head of a major label – it’s the young men hanging out on the corner, to whom Perez offers his albums and a new way of life. He doesn’t consider there to be anything odd about this. He considers his music to be a form of da’wa, or religious outreach.

“New Muslim Cool” will be showing on PBS on June 23, but I couldn’t wait that long to find out more. Perez’s record label was originally based in the Bay Area – where there is, apparently, a thriving Islamic hip-hop scene.

“Oh, I love being a citizen of the Bay,” Tyson Amir-Mustafa told me. Amir-Mustafa is a 29-year-old San Jose native who’s released four Islamic-influenced rap albums. “Islam is still young here. The Muslim community is still shaping its identity here. And it’s very much a Muslim-American identity, with no question that the two things can go hand in hand.”

And the “American” portion of that identity would include hip-hop. Many local Islamic rappers have been rapping longer than they’ve been Muslim.

“I started writing poetry, winning poetry awards when I was 10 years old,” said Amir Abdul-Shakur, who’s 26 and originally from Oakland. “Then I started honing my rap skills in middle school.” Abdul-Shakur, who raps under the name Five Eighty, converted to Islam in 2000. There are no contradictions, he said, “but there are a lot of things I can’t talk about. There are a lot of things I just don’t do.”

Those things would include: drinking alcohol, using drugs, any kind of criminal behavior, casual sex. Both men are married. Neither wants to use his music to evangelize.

It would seem to be hard to create lyrics around these limitations until I realized that they both had a bigger topic than most mainstream rappers: their own personal journeys. After all, the rap marketplace is saturated with the same old, same old – who better to offer a different take on risk and reward than a converted Muslim rapper?

“You’re already different,” Amir-Mustafa told me. “People are already looking at you with all these associations, all these misperceptions. So why not take the opportunity to talk about things they’re not used to hearing in the music, things like integrity? Why not talk about why you decided to go a different way?”

Caille Millner is an editorial writer. E-mail: cmillner@sfchronicle.com.

This article appeared on page A – 10 of the San Francisco Chronicle

Rola Awwad
Town: Wayne
Children: Adam, 10; Amana, 7; Miriam, 3
Occupation: Stay-at-home mom; Arabic teacher

Rola
Awwad wasn’t angry at first. Her son Adam’s elementary school in Wayne
had denied requests for the Muslim fifth-grader to pray in a private
room during school, citing safety concerns.

But
then Awwad learned from chatting with a woman at her mosque that the
Constitution protected the right to practice religion and that children
in nearby public schools had been praying in school for decades without
incident.

“I
never knew he had the right to pray, as long as it’s not interfering
with education and others,” said Awwad, a Palestinian raised in Jordan.

Awwad
sprung into action, pressing the school district to allow her son to
perform the obligatory afternoon prayer in a quiet, private space, such
as the library or the principal’s office. The Council on American
Islamic Relations, a Muslim civil rights group, intervened on Awwad’s
behalf and a compromise was reached in February. Adam was growing weary
of the public attention surrounding the case. Adam agreed to pray
during recess, while other children played nearby, either outdoors or
in the back of the classroom.

“This
was a lesson for my son not to give up on your rights. Be proud you are
a Muslim and to be proud you’re an American and born here,” she said on
a recent afternoon in her Wayne living room. Relenting on the issue for
now, she still worries about her son praying outside during recess when
it’s cold or rainy or when he enters middle school next year, when his
peers may be more apt to bully him.

Awwad
says she’s more outspoken than her husband, an engineering professor.
Her first foray into community activism was as a graduate student in
Jordan. She and a group of women built a social services center that
was controversial in the community. On a trip home, she brought her
kids to the site. “I wanted them to see it,” she said.

As
the clock struck 4, a recording of the afternoon call to prayer floated
from her kitchen while the children played in their rooms upstairs.
Awwad explained that she is intent on raising her kids with strong
Muslim values.

“I
want my kids to have a relationship with God,” said Awwad. “That will
protect them, and they will grow up to be good citizens,” she said.

ISLAM & FINANCE FROM MY PERSPECTIVE: ETHICAL INVESTMENT = SHARIAH COMPLIANCE

Friday, May 8, 2009
ETHICAL INVESTMENT = SHARIAH COMPLIANCE

The notion of ethical investing goes back at least to 1758, when the Quakers banned profiting from the slave trade. But the market for ethical investments has always remained a niche. The goals of maximizing profit and fulfilling a moral agenda conflict more often than they complement one another, and investors who want to put ethics first have turned out to be relatively few.

Finance that complies with Shariah, is still a niche within the ethical investing niche. In all, there are at least $500bn worth of Islamic finance assets worldwide and Islamic banking has expanded by more than 10% annually over the past decade, according to Standard & Poor’s. It’s grabbing the attention of some of the biggest banks in the world and changing how they do business.

So just what does Shariah-compliant banking entail? Some of it is simply prohibiting things seen as immoral. Investing in casinos, pornography and weapons of mass destruction is out.

The animating religious goal behind other restrictions is to achieve greater social justice by sharing risk and reward. Islamic finance bans people from selling what they don’t own, which rules out short selling, and from engaging in contracts deemed to have excessive uncertainty on either side. That rules out traditional insurance, so Islamic banks have instead developed takaful, in which a group of people pool risk.

The Shariah stipulation banning interest, though, is the one that poses the most problems for modern finance.

To be sure, from the Bible to Buddhism, most of the world’s faiths have issued warnings against usury, and theologians through the ages have debated the line between permissible and excessive interest rates. But ultimately, in the West, governments and religious authorities deemed some amount of interest permissible.

Not so in Islam, in which most scholars deem fixed-interest payments forbidden. So, for example, the sukuk issuer does not sell a debt, as a traditional bond issuer would, but rather sells a portion of an asset, on which the buyer is then entitled to receive rent. Likewise, rather than take out an interest-bearing loan, a business in need of financing might enter a musharaka, a partnership with profit-and-loss sharing.

Why the growth in Islamic finance now? After all, Islam’s rules have been around since the seventh century, and some Muslim countries have been rich since the discovery of oil.

One important factor has been the recent rise in religiosity in Muslim countries especially, after the terrorist attacks of September 11, 2001. With the US-led invasions of Afghanistan and Iraq, there was a feeling in many countries that Islam was a religion under siege.

Some observers date the rise in religious observance back even further, to the 1980s, when guest workers in Saudi Arabia from across the Muslim world began returning to their own countries, re-importing with them the strict Wahhabi subsect of Islam for which the desert kingdom is known.

Whenever this burgeoning religious observance began there is now an increasing appetite for Shariah finance. In some cases, Middle Eastern governments have embraced Islamic banking to advertise their religious chops.

Some of the growth in Islamic finance has also been due to clever positioning by Malaysia. After September 11, US authorities froze the bank accounts of several prominent Saudis, which triggered other wealthy Arabs to withdraw their funds from the United States.

Ultimately, some $200bn left the US. Many of the investors were from tiny Gulf states whose economies were too small to absorb their funds, and so they looked to Malaysia, a Muslim country with a relatively sophisticated financial system. It issued the first sovereign sukuk in 2002, and made a point of appointing Shariah scholars from the Gulf to monitor compliance.

Today, Kuala Lumpur rivals traditional hubs like Dubai and Bahrain as a global centre of Islamic finance.

In the end, the maths behind the growth of Islamic banking may be pretty simple: There are 1.3 billion Muslims in the world – roughly a fifth of the world’s population. Some live in quickly developing economies, some sit on vast oil wealth and some are newly middle-class Americans and Europeans.

No one can say for sure how many will seek out banking that complies with Shariah, but even a small fraction of 1.3 billion is a market no one wants to ignore.

Posted by SWEET CHILD at 11:52 AM

Poll: Brit Muslims more ‘loyal’ to Britain – UPI.com

Poll: Brit Muslims more ‘loyal’ to Britain
Published: May 8, 2009 at 7:57 PM

LONDON, May 8 (UPI) — A survey suggests 77 percent of British Muslims describe themselves as loyal to the country, compared to only 36 percent of the general public.

The survey, conducted by Gallup and the Coexist Foundation, suggests British Muslims are more likely than the general public to have high opinions of British elections, courts, media and financial bodies, The Times of London reported Friday.

“Since 9/11 and the terrorist attacks in Madrid and London, mistrust towards European Muslims has become palpable. Significant segments of European societies openly express doubt that Muslim fellow nationals are loyal citizens,” the report’s authors wrote. “The general construct of this premise rests on an oversimplified and erroneous understanding of Islam and terrorism.”

The poll involved 1,000 telephone interviews and 500 face-to-face interviews with Muslims living in areas with high Islamic populations.

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