A few nights ago I watched a television interview with the Sheikh of Al Azhar, Dr. Mohamed Sayed Tantawi. I listened to his views on the multiplicity of social and Islamic issues relating to day-to-day life in modern Muslim communities.
He limited his views to fields of Islamic learning, knowledge and experience. He emphasized that a mufti must not allow his fatwas to exceed the domain of his Islamic knowledge and must ensure that other related knowledge and expertise are provided by recognized experts in the different areas of knowledge.
In his view the role of the mufti is confined to religious issues and people’s social concerns. The objective is to provide people with Islamic rulings on issues that suddenly appear. The guidance it gives is intended both for the public good and to minimize hardship. Thus it must be based on strong Islamic belief and a broad awareness of the ramifications of modern knowledge and discoveries.
I was very much taken by the mufti’s views on Islamic banking. He expressed his dismay at an Islamic government licensing Islamic and Western banks. To him, this licensing of both types makes the government appear to accept Islamic banks and also to allow banking practices that are in conflict with the Shariah.
The mufti stated that Western banking may have been rejected because of interest rates for calculating their rewards for services rendered. However, he gave his acceptance to this approach of calculating the price for services rendered. Islamic banks reach the same conclusion to its administrative expenses.
He highlighted that such rates are changing, not fixed, continuous and not permanent. Their levels vary by time, region, economic conditions and a variety of circumstances outside the control of banks.
Furthermore banks do not lend to the poor and require guarantees from the rich and ask for feasibility studies. His views are rejected by a wide body of people who hold rigid reasonings. However, as it is a very broad segment of the population it may be better that they give a listening ear to the realities of these businesses. Western type banking in general is very expensive.
In Saudi Arabia it is more expensive than most countries, with very modest quality and monopolistic privileges. The hands-off approvals by the monetary authority on interest rates, charges, quality of services etc. lead to this state of affair. Islamic banking is believed to charge twice and deliver half.
There are a number of factors which hold back the Saudi economy and prevent it from growing. Billions of Saudi dollars are parked in the West and multinational companies ignore Saudi investment opportunities as they pass on the way to better-managed economies. Banking in Saudi Arabia cannot be credited with lifting a finger to make development a reality.
This can be expected to continue as long as the banking monopoly and the cultural animosity to it are features of Saudi banking. This way banks make a killing for themselves and make it very difficult for the economy to grow.
Arab News Features 2 December 2002