Malaysia’s Bank Islam Ready for Takeover
Malaysia’s first Sharia lender, a bank that does not charge interests over loans, Bank Islam is ready for a takeover. It is the second Islamic bank of the country in term of assets, and it is preparing to become even bigger; it will focus on other Islamic countries in the coming years, especially on Indonesia.
Islamic banks are quite popular in Malaysia, a Moslem country. The government encourages Islamic banking; it has the dream of turning Malaysia into the world’s foremost Islamic banking country.
This kind of banking grows by some 20% each year in Malaysia. ‘Islamic banking accounts for about 13 percent of total banking assets in Malaysia, and is tipped to be one of the economy’s leading growth drivers, thanks to’ the beforementioned goal of the government.
Managing Director Zukri Samat told reporters that the bank is “looking for partners. Anybody who has a proposal, who wants to talk to Bank Islam, we are open to that.”
About the future direction of the bank Zukri said: “We have targeted Indonesia as our prime target. It’s an obvious choice — it’s very near to us, we are very familiar with the country. Also it’s a country with a 250 million population and the majority are Muslim.”
Indonesia is the world’s most populous Moslem country. As such, it is a logical target for any Islam-based enterprise.
At this moment, Islamic or Sharia banks ‘have less than 5 percent of Indonesia’s domestic banks’ total assets. The Indonesian central bank,’ however, ‘has said the sharia banking industry will have a 10-15 percent share of national banking assets by 2015.’
What is most fascinating about the so-called Sharia banks is that they are based on religion, yet capitalist. They are called “Sharia banks” for a variety of reasons, but a possible opposition to competition, a free market and capitalism is not one of them.
It will be interesting to see how Sharia banks will fare in the coming years. Will they continue to grow and be able to compete, or will they lose the battle against non-Sharia banks (that may have more money to spend).
I’d say "technically doesn’t charge interest for loans". Interest is both against sharia, and absolutely necessary for modern banking. So people have found what amounts to a loophole in the religious law.
How it works is that the bank sell you something, like gold, and you agree to buy it slowly over time, then they immediately buy back the gold with a (smaller) lump sum. So, basically, you get a wad of cash today, and have to pay in back in small increments whose total would be larger than the lump sum you got.
I guess Allah doesn’t follow substance over form accounting practices with your soul.