February 7, 2007
Al Rajhi Bank was officially launched in Malaysia yesterday. It has 15 branches open now and is planning a whole lot more this year. Yes, already we see its trademark deep peacock blue knocking at our doorsteps through big banners claiming “Just Values” all around LRT pillars, and the branches themselves popping up like nobody’s business in the Klang Valley.
Islamic Banking. That’s something I haven’t actually thought through very thoroughly indeed. If you think about it, its values and principles are based on those that have built up the monotheistic religions of today. Some questions to think about, before I give my approval rating for the GREAT emphasis Malaysia has been placing upon Islamic banking recently. Just check out newspapers today and you’ll realise that this is the “next big thing” for Malaysia. Tan Sri Zeti certainly has her hands full trying to implement it all: A Malaysia that is a central Islamic hub.
Can citizens in Malaysia, who are not Muslim, affirm Islamic banking? Can they subscribe to it in principle, not just because it makes good economic sense and brings in the dough? I suppose this warrants the larger question of whether non-Muslim Malaysians can adhere to general Islamic values? My personal answer is yes, if it sticks to what it preaches. However we are not fooled into thinking this is the reality.
But one thing at a time. Islamic Banking. Think about it. If non-Muslims can subscribe to these values, because they are… as Al Rajhi puts it so succinctly, “Just Values”, then perhaps this is the stepping stone we’ve all been waiting for to bring people together. Just a tiny weeny step closer.
The majority of these principles are based on simple morality and common sense, which form the bases of many religions, including Islam. The Islamic financial system employs the concept of participation in the enterprise, utilizing the funds at risk on a profit-and- loss-sharing basis. This by no means implies that investments with financial institutions are necessarily speculative. This can be excluded by careful investment policy, diversification of risk and prudent management by Islamic financial institutions.