Perhaps the simple fact that Sharia finance is an inferior product -- quite apart from the fact that it's a hypocritical con, costly, and the potential source of funding for terrorist organisations -- will see the death knell of Islamic (aka Sharia) finance. At least that's what this article, from the Wall Street Journal would seem to suggest. [pasted below]
I've been writing for a while about this issue, and even been interviewed by Australia's ABC new 24-hour TV station, and engaged in some debate with none other than the chief imam of Hong Kong's mosque in the pages of the local newspaper.
Quite apart from all the problems touched on above, there's the "thin end of the wedge" argument -- that today it's Sharia finance, tomorrow Sharia courts -- as they have now in the UK and is being fought by One Law for All.
The photo above is from a September 2008 post in Living Journey, reporting that the Australian Attorney-General Robert McClelland, had said:
"The Rudd government is not considering and will not consider the introduction of any part of Sharia law into the Australian legal system". **In that case what are Crean and Sherry doing touting "Islamic financing", with the attendant requirement to modify the Australian legal system to accommodate Sharia-based finance?? Note to self: ask McClelland.
Related:
National Australia Bank introduces Sharia loans, Jun 09. Here.
Open Letter to Simon Crean, then Minister of Trade and promoting Sharia finance, via Austrade, Australia's trade promotion arm.
** Unfortunately I have not been able to trace a source for the McClelland quote, except for this Moriel Ministries site, which quotes an "attached article", but with no article attached....
Wall St Journal article, June 21, 2010
Sharia-compliant banking products a 'huge flop' in Britain
ISLAMIC bank accounts and other financial products have failed to take off in Britain, according to industry insiders.
This is despite hopes that the UK would become a pioneer in a new growth market.
New banks that were set up to appeal to the UK's nearly two million Muslims and Sharia-compliant products created by the existing high street lenders have failed to make much of an impact, critics say.
Junaid Bhatti, part of the team that set up Islamic Bank of Britain, the first Sharia-compliant bank approved by the Financial Services Authority, says that the sector has been a big disappointment.
"As we now approach the sixth anniversary of IBB's launch, I'm sad to finally have to admit that Islamic finance in the UK has been a huge flop," he said. "IBB may still be limping on as probably the last bastion of the cause, but it's difficult to imagine it holding out for much longer."
Competitors have fared even worse and many had closed or scaled back their operations significantly, Mr Bhatti said.
Established banks that launched Islamic banking products are also believed to have fared poorly. HSBC and Lloyds were seen as having made the biggest efforts to make inroads, but without much success, Mr Bhatti said.
"Lloyds, which made a half-hearted stab at Sharia-compliant products in 2004, doesn't seem to have promoted its offering for years," he said in an article for MuslimPolitics.com.
"Even HSBC Amanah, probably the most credible and efficient provider of halal banking in the UK, has dramatically reduced its dedicated Islamic banking staff in Britain, and its marketing volume has been turned way down."
Neither Lloyds nor HSBC would give customer figures, but HSBC said that its accounts were growing at 10 per cent to 15 per cent a year. Lloyds did market its Islamic products but is no longer doing so.
An official said that they were detailed on its website.
Anyone visiting a branch could ask about its Islamic personal and business current accounts but would not see an adviser with specialist knowledge.
HSBC has launched several Islamic products since it got into the market in the UK in 2003 and has a dedicated salesforce in branches in areas with large Muslim communities.
The main aims of Islamic finance include the avoidance of riba, or usury, and making sure that money is not used to support industries considered to be unethical, such as alcoholic beverages, pornography and gambling.
Mohammad Qayyum, the director-general of the Institute of Islamic Banking and Insurance in the UK, said that there had not been "a concerted campaign by banks to make people aware" of available products. Another hurdle is that banks often price their Islamic products more expensively than alternatives, he said.
However, there could be some improvement with legislative changes designed to make it easier for banks to offer Islamic products, which should reduce their price.
The Treasury has made changes in the tax law to accommodate Sharia products, Mr Qayyum said, and the FSA is consulting on a new framework for the issuance and regulation of sukuk, or Islamic bonds.
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