Moinuddin Malim, chief executive for Mashreq al Islami Bank, said that financial products that adhere to Islamic teachings will only appeal to the wider western world if they adopt the phrase ‘ethical banking’ instead.
He said that too many people in the UK do not equate ‘ethical’ finance with ‘Sharia’-based products.
Mr Malim said: “What is Islamic banking? It is ethical banking. A lot of people just think that it is only for Muslim, and it is not - it is for everyone.
“But the problem is that it doesn’t appeal to non-Muslim investors in Europe, primarily because they do not understand the various Arabic phrases.
“It really needs to be de-jargoned. So perhaps the term ‘ethical’ maybe an alternative term to help theses Islamic principles gain wider appeal and grow in UK and Europe.”
The three-day event, which began on Monday, 22 November is now in its 17th year, and aims to highlight the strengths and challenges of Islamic finance.
During the conference, the UK Islamic Finance Secretariat, together with UK Trade & Investment, also hosted a roundtable discussion, looking at new opportunities within Islamic banking in the light of the global economic recovery, and examining future growth prospects for the industry.
Source : http://www.ftadviser.com/FinancialAdviser/Investments/Sector/EthicalAndSRI/News/article/20101125/a390e556-f649-11df-a28b-00144f2af8e8/Islamic-banking-terms-need-a-western-label.jsp - Nov 25, 2010
Discussion- Islamic banking needs a "Western label"- Here is the weekly teaser.
ReplyDeleteArabic terminology might be confusing for the outsider, but they cover the substance better than the "close to - but not the same" English translations. Using the English words creates confusion (just as "interest" did for "riba")- An Islamic bank does not necessarily invest in environment / eco friendly technology (one of the cornerstones of "ethical" finance Western style), but then again not every ethical bank is an Islamic bank. The two terms are not at all interchangeable.
Does Moinuddin Malim want to create even more confusion by mixing up things even more, or is he on the other hand clearing things out for us ?
Comments, likes, remarks ... welcome
I agree that Islamic terms are not familiar to many, and understand the need to make them more user friendly. Yet "Islamic" itself is broader than "ethical". Similarly, Islamic financial transactions involve activities beyond conventional scope, to involve social responsibility, equitability, profit sharing, risk sharing, wealth improvements,etc. Best probably stick to the Islamic terminologies, as it makes it easier to refer back to Al-Quran and Hadith where these practices should refer from. This would ensure clarity, which has sustained in many centuries to maintain the resilience of Islamic economy. Introducing new terminologies will add complications to the industry that we need to drive to grow more rapidly.
ReplyDeleteOur attentions, perhaps, should be directed more towards inviting people to understand better what Islamic economic terminologies are, and the principles they have been practiced upon.
Indeed, RIBA and INTEREST are different concepts, and translating always means loss in meaning - it is best to stick to the Arabic words (maybe with a glossary). Jargon is an inherent part of all professions.
ReplyDeleteClients usually want to be "convinced" and not really "educated".
The first goal for the Islamic financial institutions IFI therefor should be to structure responsible products and then to market them well. Maybe by triggering questions. To really educate clients is not really the goal of the IFI. They should focus on the first 2 and be ready to answer the 3rd one. My opinion.