I welcome the introduction of Islamic Banking in the Timergara Branch of the Bank of Khyber.This is the fifth Islamic Banking Branch of the Bank of Khyber.I wish this branch every success.Banking has played a very important role during the last eight centuries to provide essential financial services to the people and act as a catalyst for economic development .
As conventional banking has grown and flourished in the context of capitalism it has become almost identified with that system. While in the initial phases venture capital did play an important role, later developments which have gone to define
the present character of banks as financial intermediaries have resulted in exclusive dependence on the instrument of interest. Centrality of interest is now a major characteristic of conventional banks.In this model of banking the demands of financial facilitation and of economic development and the imperatives of justice and equity do not converge.
Economics and finance have been delinked from ethics and moral values and social objectives.Conventional banking by and large has led to concentration of wealth and power in fewer hands with consequent gross inequalities of income and distortion
of opportunities in the economy and society. There is a genuine need for credit in every economy. But the emergence of a pre-dominantly debt-based economy has very serious social and moral consequences both for the economy and the humanity at large. Today the entire world is plagued by the curse of debt, domestic and international, and this has, for all practical purposes, promoted a new form of slavery — economic and financial servitude. This is a challenging situation. It is time to call a spade a spade. Those who stand for justice, equality and wellbeing of ALL human beings, and not merely of a few, must strive hard to find adequate alternatives to the interest based financial system.
Islamic model of Riba-free banking is one such alternatives. Islamic banking today is not simply a dream or a theory. It is now a reality. During the last 40 years, in particular, sustained efforts have been made in different countries to establish Islamic banks and finance institutions. The deposit base of these over three hundred institutions is now approaching half a trillion dollars. The rate of growth of Islamic banking during the last three decades has averaged between seven to thirteen per cent per year. While the movement is still in its early phase of development, its achievements are remarkable bearing great promise for the future. Pakistan should have established its entire banking and economic system on Islamic principles, eliminating interest in all its forms. This has not happened and the vested interests have frustrated all efforts made by the Islamic Parties, the Council of Islamic Ideology and the Federal Shariah Court. After decades of struggle some beginning has now been made in this direction. The credit goes to the present MMA Government in the NWFP that it has, through an amendment in the Bank of Khyber Act made it obligatory that this bank should gradually but completely eliminate interest and perform all banking functions in accordance with the Shariah. This is a very noble effort and I welcome the conversion of Timergara Branch to total Islamic Banking.
I pray Allah subhanahu wa ta’ala to bless these efforts and hope this branch will strive to become a model Islamic Bank, serving the people to establish a just economic order.
(Prof. Khurshid Ahmad) |
