The designation ‘Islamic’ does not confer an Islamic status to Muslim-owned banks. The utilization of Islamic terminology to describe transactions does not render riba transactions halaal. Since the owners of these banks are basically westernized capitalists, interested in making only money, whether in halaal or haraam ways, they are not at all inclined to effect slight changes to their agreements and to move their feet a little, and to incur a little extra expense to ensure that their dealings are acceptable to the Shariah.
Muslims are dealing in riba with non-Muslim banks on a large scale. There is, therefore, a need for proper Islamic banking institutions from which both the capitalist, selfish Muslim bank owners and Muslims who need credit can benefit. Our criticism of the present banking arrangement is not to discourage the operation of Muslim banks. The motive for our criticism is an attempt to make them a bit alert and to make them understand that to earn halaal wealth, they have to depart somewhat from the norms of the non-Muslim riba banks.
They cannot hope to earn halaal money by simply sitting in their offices like the fat western capitalist cats, refusing to send even a man to accompany a client to a supplier to Islamically conclude a proper sale. They cannot hope to earn halaal by refusing to effect some simple changes in the wording of their Agreements. They cannot earn halaal by adopting 100% kuffaar attitudes and insist on haraam deals such as insurance and riba on late payments.
All valid business deals carry a certain amount of risk. While all efforts should be made to minimize the risk factor, total elimination is not possible. The Muslim capitalists who do not ‘believe’ in Allah’s Razzaaqiyyat, in the Aakhirah, in the predetermination of Rizq — in short in Taqdeer — labour fruitlessly to circumvent the proscriptions of the Shariah by manipulating the Shariah’s own terminology. They endeavour to totally eliminate the risk factor by even brazenly insisting on flagrant violations such as insurance and interest on payment defaults. In these areas they have even failed to procure Shar’i terminology to act as their subterfuge for their haraam dealings.
They can render their transactions halaal by being a bit more productive and showing more concern for Allah’s Law. If they are sincere in implementing Muraabahah, Shirkat and Ijaarah, then they must necessarily submit to the Shariah and accept these transactions as the Shariah gives them. They should not seek to subvert the Shariah and make it comply with the concepts of the western banks. Such ‘compliance’ is haraam since it is in total conflict with Allah’s Law. There is no bridge for the chasm between Imaan and Kufr.