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globeandmail.com: Let’s not write off sharia banking September 27, 2007

Posted by islamicfinanceaffairs in Uncategorized.
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globeandmail.com: Let’s not write off sharia banking

When we learn that Muslim Canadians want to start a sharia bank (a financial institution governed by Islamic religious law), our immediate reaction does not have to be that it’s one more assault on the Canadian way of life. Nor must we write it off as unpractical because Islam’s social ethic forbids charging interest on loans.

Let’s remember that chartered banks are already not the only options we have for financing ourselves. There can be room for one more. As well, let’s note that a ban on interest was imposed for centuries in Europe by both church and state. That ban is even as old as the Old Testament, which forbids Israelites from charging other Israelites interest.

So, this alternative way of financing one another has a long and diverse pedigree.

Subtle philosophical arguments against interest were advanced long ago by some of the West’s most respected thinkers, such as Aristotle and St. Thomas Aquinas. Medieval popes and church councils inveighed against it for more than 1,000 years. Penalties were often imposed against usurers, as all financiers were labelled if they charged interest. The idea may come as a shock to us in an age when paying interest is as much part of everyday life as borrowing money is. But if it’s new to most of us, it’s not new to history… [Read on]

reportonbusiness.com: Sharia-bank bids trigger concerns September 25, 2007

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reportonbusiness.com: Sharia-bank bids trigger concerns

Ottawa has received its first applications to start up Canadian banks operating within the strictures of Islamic religious law – financial institutions that, if approved, would be among the first in the West.

Canada’s bank regulator, the Office of the Superintendent of Financial Institutions, is studying two proposals for banks that offer services in keeping with Islamic laws that forbid speculation and interest but are in favour of transactions where profit and loss is shared.

The applications came to light in government documents obtained by The Globe and Mail under access to information laws, files that show Ottawa believes there are four other possible applicants keen to start banks operating under Islamic religious law, or sharia.

While some banks in the West offer sharia-compliant products, few aside from the Islamic Bank of Britain are standalone institutions set up expressly for this purpose.

The applications have triggered a slew of concerns among regulators,
documents show, including whether these institutions could be reliably
audited, governed by directors or monitored. “Are the deposits
insurable?” one OSFI paper asks, suggesting the banks may have higher
liquidity risks and suffer from a “lack of knowledgeable external
auditors.”

The applications are taking Canadian regulators into largely
uncharted territory as they puzzle over what sort of regulatory
treatment would apply.

Regulators say the challenge is trying to discern exactly what types
of financial transactions are being proposed and whether they could
conceivably fit what’s allowed under the Bank Act.

Islamic banks apply to set up shop in Canada | Breaking City News | Reuters.co.uk September 25, 2007

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Islamic banks apply to set up shop in Canada | Breaking City News | Reuters.co.uk

Canada’s banking regulator said on Monday it has received two applications from groups wanting to set up the first Islamic banks in the country, a small but growing industry in Western nations.

“In terms of formal applications, this would be the first two,” said Normand Bergevin, managing director of approvals and precedents at the Office of the Superintendent of Financial Institutions (OSFI).

Islamic finance complies with the religion’s ban on charging interest — a key facet of traditional banking — and on investing in products associated with alcohol and gambling.

Mufti Taqi Usmani – Lecture and Q & A on Riba September 4, 2007

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Mufti Taqi Usmani – Lecture and Q & A on Riba

Riba Lecture Riba – Q & A Session

Mufti Taqi Usmani – Lecture and Q & A on Riba September 4, 2007

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Mufti Taqi Usmani – Lecture and Q & A on Riba

Riba Lecture Riba – Q & A Session