General Manager and board member of the Arab Finance House Dr. Fouad Nadim Matraji explained that Islamic banks have not been affected by the mortgage crisis that afflicted the international financial markets and that they are largely immune against such crisis thanks to inherent factors within Islamic banking. The most important of these factors is the prohibition of debt trading, taking precautions against money laundering, as well as the official and professional restraints upon which banks are based such as caution against embarking upon projects that entail financial difficulties and risks.
Dr. Matraji explained that Islamic banks have several alternatives [to conventional banking products] such as Ijarah Bitamlik [a renting contract that ends in ownership], Murabaha etc. which demonstrate that Islamic banking is a sound and systematic alternative banking system that others should take as an example. Islamic finance is expected to increase on the international level and its number of customers is also expected to rise as they search for an alternative [banking system].
Matraji added that Islamic banking is distinguished by a commitment to uphold integrity and its distancing from risky projects. He pointed out that this crisis has caused significant global inflation in world banks because they buy debts and enlarge accounts without tangible transactions taking place or without brokers being aware of them, highlighting that Islamic banks do not engage in such ventures.
Matraji added that only the profits of Islamic banks could be affected by the international financial crisis, but not the capital, which is protected by Islamic banking unlike conventional banks.
Full Article
Sallam Alaykum / Peace be unto you
Please share
No comments:
Post a Comment
Civility is recommended in all comments.