من: email@example.com بالنيابة عن Ikram Ur Rahman [irahman@ALHILALBANK.AE]
تاريخ الإرسال: 26 آب, 2008 12:39 ص
الموضوع: Calculation of profit and interest
السلام عليكم ورحمة الله وبركاته
A mail was circulated some days earlier with the attached Excel file. The document has been prepared by someone Mr. Abdullah al Shahrani who is a Financial Analyst. Mr. Shahrani tried in his document to demonstrate the difference between Islamic and Conventional banks showing how maliciously Islamic banks are exploiting their customers. I agree with him to the extent that the Islamic Banks should not take the advantage of sacred Islamic feelings of their customers rather they should practice in a very transparent manner. However, the way he proved his litigation is very funny and interesting particularly his hypothetical view describing the reason for converting the Western banks into Islamic ones.
..................... وهذا في رأيي سبب لان تتحول البنوك الغربية إلى دجاجة البنك الاسلامي التي تبيض ذهباً
I’m sure if Mr. Shahrani could have even the preliminary knowledge about general banking practice never would have come up with the result he shown in his document. His whole analysis is fictitious and far away from the reality. This is only because he couldn’t identify the difference between flat and reducing balance rates which are the principles for such kindly of calculations. If you lay down the first stone wrongly, the whole construction will go the same way.
تا ثريا مي رود ديوار كج
Generally, Islamic banks use the flat rate for the calculation of their profit on Murabaha and Tawarruq while the conventional banks adopt the reducing balance rate on the given loans. If any Islamic bank offers, say, its profit on Murabaha finance at 4% flat rate, the conventional bank will offer the loan at least at 8 or 9% interest rate on reducing balance that ultimately comes equal to the flat rate offered by the Islamic bank. I don’t know any conventional bank that offers its loan at 4% reducing balance as the calculation of Mr. Shahrani reveals. Really, it will be very interesting to know if such a bank exists in the market. In fact, for the customers, that bank will be the Hen of laying golden eggs (دجاجة التي تبيض ذهباً). Mr. Shahrani’s calculation is also a substantial proof of his lack of information about the market practice and competitive advantages. Can anybody imagine that working in the same industry, two different banks can have so huge variation in their pricing i.e 50% as Mr. Shahrani’s fake allegation states? Customers are not fools Mr. Shahrani! Nowadays they are more responsive and conscious than they could have been in the past. No Islamic bank can survive in the market even for single day dealing as unfairly as you wish to prove. All banks, be the Islamic or Conventional, are pricing the same with a little and negligible variation but the ways are different which result in almost the similar. Moreover, the Islamic banks abide by the moral values of Islam and committed to do exactly what they promise their customers and to the best of my knowledge they do what they say. I would like to request Mr. Shahrani to review his following statements:
القروض الاسلامية او مايسمى قروض "التورق" تحسب فائدتها بطريقة مجحفة وغير عادلة.
هذه ليست دعوة ضد اسلمة التمويل ،، وانما مطالبة عادلة تقول: اوقفوا جشع البنوك وشركات التقسيط
It was better if Mr. Shahrani could acquire proper knowledge about Islamic Financial products before to accuse the Islamic financial institutions for their mall practicing. Further, the terminologies he used in respect to Islamic finance like الاقراض والاقتراض والفائدة are totally irrelevant to the Islamic financial practice.
I again attach his document for the review of the group members and will appreciate if Dr. Sameer will put his personal comment on it. I also surprised not see any remarks on the document from any member of the group.
May Allah guide us to the right path and keep away from all the wrong doings.
والسلام عليكم ورحمة الله وبركاته
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