Islamic Banks prove their viability

Dr. Najatullah Siddiqui, an eminent economist and winner of King Faisal prize for Islamic studies, emphasised the viability and success of Islamic banking while addressing the Islamic banking seminar at King Fahd Hospital organized by the cooperative office for call and guidance (COCG) recently.

Dr. Najatullah said: "The growing number of Islamic financial institutions and the opening of Islamic banking counters by major conventional banks proved that Islamic banking is successful."

He commended the services being offered by Islamic banks assist in achieving market stability and ensuring justice and security in financial dealings, adding that the Islamic banking system was the best alternative for most disadvantages of the conventional banking. "Islamic bank dealings, which are based on interest-free lending and mutual-sharing of profit and loss, are more efficient, stable and secure compared to conventional banks.

"When a conventional bank gives a fixed amount in loan to start a business, the borrower has to pay back the amount with interest irrespective of the situation of his business. Sometimes, the market may not be ready to accept his goods. But the bank will not be ready to bear with him until the products are sold out. "Such a situation ultimately results in creating instability and insecurity in the market," he added. At this juncture, Islamic banks come forward to save the entrepreneur by giving him a grace period and sharing his loss, thus ensuring security and stability of the market, Najatullah said.

Dr. Ausaf Ahmad, a researcher at the Islamic Development Bank's Islamic Research & Training Institute and author of several books, spoke on the history of Islamic banking and its future prospects, explaining the various Islamic banking products. The seminar was opened by Sheikh Mazin Batterjee, director general of COCG, and was presided over by Sheikh Khaled Al-Rumaih, director of IEF. K.K. Abdullah, V.K. Jaleel, Dr. Abdul Rahman and T.P. Ahmad also addressed the seminar. Earlier, P.K. Ibrahim welcomed the guests.