Some commentators accuse Islamic Banks of being shrouded in a cloak of piety.
They accuse them of using the word Shariah as nothing more than a marketing gimmick.
These critics assert that Islamic Banks offer conventional banking products wrapped in hollow fatwas written by dishonest or unknowledgeable scholars.
They say that Islamic Banks simply use classical Arabic words for commercial transactions to give their products an Islamic flavor.
Some even claim that there can be no Islamic Banks since there were no Banks in the first centuries of Islam.
Here are a few examples of the criticism that I have seen:
“Interest-based loans with Islamic labels…”
“The products that modern-day Islamic bankers have created are very similar to conventional products.”
“the products promoted by the Islamic finance industry are sometimes indistinguishable from those of interest-based institutions.”
“The foundation of Islamic banking…is…based on execution of…documents. On the basis of which…a haram…gets…to be…halal.”
“…the Islamic banking system is only considered to be a change of name.”
“normal banking sprinkled with holy water.”
I absolutely reject these unfounded accusations. It’s one thing to criticize a specific product or a specific institution; it’s another to disparage a whole industry.
These criticisms usually have a lot in common. They have no knowledge of historical commercial transactions. They make serious mistakes in the understanding of Shariah. For example confusing between acceptable debt and forbidden interest, or assuming Shariah must be only equity financing. Many have mysterious sources either “an Islamic banker I know” or a “western banker with knowledge of Islamic banking”, which are always nameless. These sources seem to know everything but say nothing accurate and have concluded it’s a scam but without providing a shred of evidence. What one never sees in these articles is any detailed analysis of an Islamic product and how it breaks any Shariah rules. They are mainly based on anecdotes and innuendos.
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