Islamic Banking is the same as Conventional Banking
Whereas to some people, Islamic or conventional banking makes not a dime of a difference – but people say the sin will be on MUFTI Sahab and not you so Islamic banking in Pakistan basically becomes sugar-coated banking. The difference is they call markup and stuff “RENT” by which you feel and consider it’s not Riba. Javed Ahmed Ghamdi also shares the same thoughts about renting for the capital cost borne by the bank in our Car Ijarah example. Some people opt for Islamic Banking products because the extra amount they pay on late repayment is Donated to Charity (Sadqa) whereas in the conventional bank it becomes the income of the bank. But the trouble is when you get advert statements like
Interest = insha’Allah munaffah.
The second thing, the impact is the same in your pocket. This is a manipulative control built to make sure you as a customer pay your rentals on time. After all, the bank is a Financial Institution and exists to earn either Conventional or Islamic. Although it is stated that profit and loss are always shared between the Islamic bank and the customer but eventually every business turns into profit, that’s the miracle of Islamic banks. No bank is out there to give you something with NO PROFIT. If you have to pay any extra amount other the decided amount that’s interesting and that’s Haram. Simple is that.
Argument 2: Also, back to the popular car lease case study.
Interest is one source of the bank’s profit. Using the term “Islamic” is just a marketing strategy to target unknowledgeable “holy people” who cover their eyes like an ostrich. How Islamic Banking works is purely Islamic until the procedure is followed as per the timeline. If not so, then why penalty or donation % is the same as the interest rate in case of a late fee. Interest on loose cash does not have anything liable object attached. In case you don’t pay back, the bank will ask you for money that you don’t have. In case you don’t pay for your car the bank takes your car away.
Not 100% Halal but Better is Islamic Banking Pakistan
Then is it just the change of name with more or less the same non-Islamic financial system? There is an ocean of differences between Islamic and conventional banking. But that difference is more on the soul and logic side of a transaction rather than the facade or front of it. Islamic banks receive bank deposits from all types of individuals and companies. The fact is that normal people don’t understand the basics of Islamic financing and/or the fundamental line of thinking which leads to illogical and ill-informed opinions in society. I would say you rather speak to a few people who are actually knowledgeable in this field and who can help and advise.