Islamic Banking an Anathema to
 Pakistani Democracy

A Rejoinder from Pakistan

by Mohammad Farooq

It is alarming that under the guise of ‘Islamic banking’, large sections of the Muslim populace, especially those hailing from the lower strata of society, are not only being denied a justifiable increase in their hard-earned money, but in the process are being kept away from the mainstream, with a wedge sought to be created between them and the well-off Hindus and other minorities in the context of India. All this, on the specious pretext of the banking system and its processes amounting to haram. In the context of India, this has been ably highlighted in your publication, ‘Islamic Banking in India at the service of Pan Islamists’ by Ather Farouqui. (Mainstream, March 3, 2012)

This is the first write-up in the last 30-odd years which exposes the designs of self-styled ‘Islamists’. Mainstream needs to be congratulated on its initiative, as also the author, who has brought new light to bear on the subject, exposing the indifferent attitude of mainstream economists towards the economics relating to a large segment of the Muslim population. This indifference has paved the way for the ‘Islamists’ to issue their diktats on issues relating to Muslim finances.
Pakistan, perhaps, is the worst victim of this system, which was introduced at the time of the Soviet-Afghan conflict and exploited to the maximum by the then usurper-cum-ruler General Zia-ul-Haq. Zia’s crusade was for Islamisation not only in Pakistan but the world over. His most vocal supporter was the Jamat-e Islami (Pakistan) and its counterpart in India. Overnight, the eco-nomy of the country was set back to medieval times, with the central bank and Ministry of Finance being told point-blank to convert all nationalised banks into Islamic banks and to introduce the concept of loss and profit sharing. This venture was a total failure from the start and it is a wonder how the economy survived this onslaught. The only people to benefit from Zia’s new monetary dispensation were the sharia scholars, who were taken on as advisors, lawyers close to the establishment and Jamat-e Islami, who drafted the so-called ‘new investment and loan documents’, and printers.
The country literally went back to the Dark Ages and witnessed events like the organisation of a National Science Conference, the purpose of which was to change the orientation of research and rewrite science books in the light of the Qur’an. One of the sessions of such conference was dedicated to the theme: how the electric power can be produced by Gins.

Mr Farouqui’s focus, of course, is on India but it has same bearings on Pakistan. Mr Farouqui rightly asserts that this sort of a dispensation will lead to the exclusion of Muslims from the Indian economic system and will only serve to pauperise them. In every period of history, the issue of interest has been confused with riba by the ulema for their vested interests, even though they have been in a minority. After the Islamisation projects in the 1980s, this concept has gained currency, and in the last 30 years, it has been the main tool against the West of some monsters who claim that the present global economy represents a collective conspiracy against Muslims by Christians and Jews.

To say that the word riba used in the Qur’an is a synonym of ‘bank interest’ is just rubbish, a matter of vested interpretation, used only by the scholars of a certain school of thought, mainly Deoband, whose by-products are organisations and madrasas of the Wahabi school of thought, including the Jamat-e Islami. Interestingly, the banking system in all Muslims countries, including the main funds provider of the Wahabi ulema the world over, Saudi Arabia, is based on taking and giving interest. It is hard to believe how a non-interest banking system can be advocated by certain Muslims and survive in India when it is not in force in any Muslim country.

The political leadership in India as well as civil society, which mostly comprises non-Muslims wedded superficially to the cause of ‘secularism’, is to blame if such a movement not only survives in India but is on the upsurge.

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Interestingly, the issue of non-interest banking has long been settled legally in Pakistan as well as other Muslim countries where this utopian demand was made. In Pakistan, the issue was first decided by the Supreme Court of the land in the 1990s (with a number of such cases relating to the issue reported in PLD 200 SC 225). Even before this ruling, however, the banking system of Pakistan was mainstream, except for a short period during the tenure of Zia-ul-Haq. Even after the formation of Pakistan, its founding father, Mohammad Ali Jinnah, advocated open banking. Jinnah, of course, was of the view that Pakistan should be a modern and secular democracy. This was asserted by him with vigour on the historic occasion of the first meeting of the Constituent Assembly of Pakistan. His last wish was that Pakistan should have a regulator like the Central Bank of Pakistan and his last public appearance was for the inauguration of the State Bank of Pakistan.
After the advent of the British, a majority of the Indian ulema was of the view that bank interest had nothing to do with the definition of riba. This section never raised the issue of bank interest by terming it as haaram and never advocated the establishment of a separate Muslim banking system, cut off from mainstream banking. It is appropriate that when Muslim personal law was being enacted in British India, it was Jinnah who vehemently opposed the proposal that cases related to Muslim personal law should be heard by Muslim judges only, and his view ultimately prevailed, though the British were amenable to the demand of the ulema.

For the ulema, until the 1980s, a fatwa by one of the most respected scholars of Muslim history, Shah Abdul Aziz, was still the last word—except for the followers of Maulana Maudoodi—and his word was religion for all Muslims in the sub-continent. Interestingly Maudoodi, too, never disputed Shah Abdul Aziz’s fatwa, which maintained that bank interest in the changing times was quite legitimate.
The second half of the nineteenth century and first half of the twentieth century witnessed a renaissance in Muslim India, with a galaxy of enlightened leaders, including Sir Syed Ahmad Khan, of course a casteist but that is a different issue altogether, who was also a reputed scholar of Islamic studies. He translated and interpreted the Qura’n and the spirit of the Qur’an in such a way that the followers of Islam (read upper-caste and landed aristocracy of Muslims) had no quarrel with the Hindus of the same class and, more importantly, accepted the need for a scientific approach and for being in tune with modern times—again for the upper crust of society-Hindus and Muslims alike. Unfortunately, the partition of India put a full stop to the intellectual life of Muslims, with enlightened religious, political and intellectual leadership withering away. From north India, almost every educated Muslim migrated to Pakistan, leaving Indian Muslims rudderless, without any enlightened leadership. To add to their woes their educational backwardness and the hostility faced by them from certain sections and in certain enclaves contributed to their backwardness, both economic and intellectual. Their extremely exploitative religious leadership, thus, had a field day taking advantage of the situation to set themselves up as the spokesmen of Indian Muslims. Hindu-Muslim hostility, frequent communal riots and negative media projection of Muslims has brought about a situation where most Hindus believe that a Muslim, in general, cannot be enlightened. Even the Muslim political leadership is credited with little intellectual capabilities.

Sir Syed’s thrust in his translation of the Qur’an was that apart from the basic tends of Islam relating to faith, every other thing called for a change in views and attitudes, in tune with the changing times. In this, Sir Syed had the support of the educated Muslim society and the ulema as well.

The great Islamic philosopher-poet, of course a pan Islamist, Sir Mohammad Iqbal (1877-1938), was one of Sir Syed’s greatest admirers and also an advocate of rewriting fiqh, blaming the 1400-year old Islamic jurisprudence for every ill affecting the Muslims. His book on the need to revisit Islamic jurisprudence, ‘Reconstruction of Religious Thought in Islam’, is anathema for the present-day ulema, surviving as they are on the old fiqh by making fools of Muslims.
To remove the taboo associated with bank interest because of the orthodox school of thought, a follower of Sir Syed, the famous novelist-reformer, Deputy Nazir Ahmad, also a translator of the Qur’an, conducted business in taking interest, to demonstrate that interest per se was not haraam. Another colleague of Sir Syed Ahmad Khan, Allama Shibli Nomani, who is one of the most respected aalims (religious scholars) of his time and the best biographer of Prophet Mohammad ‘Seeratunnabi’, also supports bank interest and did not consider it as the synonym of riba.

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The whole point is that the issue of bank interest among the ulema was settled after the fatwa of Shah Abdul Aziz and Sir Syed and his colleagues could muster the courage to advocate the cause of bank interest in tandem with the reforms intro-duced by the British, particularly those relating to modern education in English. The Aligarh Muslim University, which was established to advance this goal of modern education in English, has over the years, unfortunately declined in terms of academic output and achievement because of the general decline in Muslim economic conditions and their collective intellectual life in India.

I have no idea about the prevailing situation in India, but in Pakistan, only the Jama’t-e- Islami is now opposing bank interest, but without much success, as it has only a handful of followers. Pakistani banking is conducted, as elsewhere in the world, on the principle of bank interest.

In striking contrast to India, Pakistan has made remarkable progress in laws relating to Muslims through the legal process. Of course, shameful laws, like that relating to blasphemy, still persist, but the higher Pakistan judiciary has for the most part, ignored and survived the pressures and blandishments of the mullahs and some body blows to the institution of the judiciary itself by successive military regimes. A number of liberal interpretations of the Qur’an have been provided, keeping in view the day-to-day needs and requirements of the populace. For example, the right to khula (divorce for Muslim women at their initiative) has been granted, in tandem with talaq for men seeking divorce. This, while Indian Muslims still subscribe to the completely un-Islamic practice of triple talaq in one sitting. Muslim personal law in India is not averse to this illegitimate child, which was born as result of a judgment of the Privy Council. Incidentally, there is no mention of triple talaq in the Qur’an. The Holy Prophet and the four khalifas—his successors—never practiced this greatest sin, but it is followed in India because it suits the ulema.

In our changing world, no community can survive by excluding itself from the economic and social mainstream. Indian Muslims, who remain extremely backward in every field due to their excessive dependence on so-called ‘Islamic laws’, which serve only the vested interests of mullahs, need to be released from the clutches of those that keep them backward and impoverished. Their survival as equal citizens in a democratic process will to a great extent depend on their approach towards mainstream ways of life, which is not possible without economic prosperity. And, of course, this economic prosperity will not come if Indian Muslims are cut off from mainstream banking and commerce.

Mr Farouqui’s write-up, thus, comes as a breath of fresh air, explaining cogently the issue of bank interest and the attitude of Indian Muslims towards it. It is time non-Muslims in India, too, took up the issue by opposing the so-called ‘Islamic banking’ and forcing the government to deal with an iron hand with those who are trying to misguide Muslims and keep them perpetually backward and impoverished. One should not forget that Indian Muslims are politically marginalised, having little or no intellectual leadership, and on issues of concern to them, such as the demolition of the Babri Masjid, only some enlightened Hindus and Left parties have been fighting to strengthen the cause of secularism, which only ultimately can guarantee peace, harmony and a shared civic space for all. If we look to other countries in the region, we can note that many ills plaque their political systems. The Indian model of democracy—despite all its shortcomings—is still the only feasible model for Third World nations having a sizeable Muslim population.