Earning money legitimately is quite difficult in Pakistan. No doubt there is immense blessing in money earned halal way. Unfortunately in our country there is hardly any blessing left in time and money as almost every public and private institution practices corruption and the financial institutions are offering large interest rates that are is called riba (sood).
In Islamic Republic of Pakistan some major laws don’t comply with Islamic Shariah. Bank Interest rates in the West and most Non-Muslim countries are way below the interest rate that is being offered by Banks in Pakistan. In lay man terms the profit interest rates offered by Pakistani Banks are between 4-10% ( depending on duration of deposit ) as compared to western and developed countries where it is somewhere between 1-2%.
I am a moderate Muslim and for many readers I might sound like an extremist but our religion teach us complete way of living from birth till death and it has strictly denounced earning through bank interests and earning money from lending money. A Conventional bank’s 80% earnings are from loans and banks earn huge amount of money from these loans which are a huge burden on individuals, corporations and organizations. At time of giving loan they state an interest rate which sounds lesser but if we calculate the annual realistic interest rate, it comes out to be around 25% which is horrid.
Islamic banking is somewhat safer way of earning money but the problem remains, they state term ‘interest’ as ‘profit earned’ from trading as they state their profit before a deal has been matured and the buyer owns any particular product. Secondly Islamic banks don’t lend liquid cash to any individual or institution.
This could be a setback for State Bank of Pakistan but conventional banking should be discouraged to avoid riba and the Almighty’s curse, plus the employee culture within retail banking sector has worsened in last decade as it’s all about bringing money and who ever brings most money to the bank becomes the Branch Manager, leading to more promotions and I being an ex banker know that the liquor and feminism mode of obliging the big fish is in full swing that’s the reason I quit banking.
I request the Supreme Court and the Government to look into this proposal. We as a Muslim country should discourage conventional banking and allow Islamic banking to flourish and practice at reasonable profits earned through trading only and not profit earned through loans.
FAROOQ AZHAR KHWAJA
Lahore
An interesting read. Reminds us that people can still get published in Pakistan without spending a dime on proper research. The writer seems confused on many issues altogether and it is evident that he has never stepped out of Pakistan and researched how the west earns profit via banking. Let me clarify some of the facts to the best of my knowledge.
1. Rates are way below the inflation rate in the west. Agreed. So are they in Pakistan. Published research in terms of banking is usually biased as there are bodies that require certain parameters to be met. I do not know what your education level is, but I would advise you to take up a course in basic Economics. The price of basic commodities give you a fair amount of idea what the real inflation (aka mehengai) is in any country, not just the west.
2. Study how western banks rip off people via mortgages. As a US citizen actively participating in businesses in the West, I assure you whoever told you that Western Banks offer rates lower than inflation would have referred to basic profits offered on saving accounts only.
3. You do not sound like an extremist, just someone who is totally ignorant of the facts. Could I be told the name and branch of the bank you worked for? It would give me an insight as to what the policies of the banks were. Your working at a bank gives me the impression that you studied basic banking. I fail to understand, however, that you were ignorant of the fact that banks make money once they are invested in. If you have properly witnessed successful entrepreneurs, they may not state it, but they use the investors money to make profits. That is where success in business actually lies. Banking is also a business, not a charity.
4. Your last paragraph reminds us all that religion is mixed with each and everything in Pakistan. If you do not call that extremism, it is not moderation either.
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