Al-Azhar blesses interest
- From: "Muslim News" <editor_@xxxxxxxxxxxxxxx>
- To: <submit@xxxxxxxxxxxxxxx>
- Date: Wed, 20 Nov 2002 07:42:26 -0000
Islamic institute blesses interest
Conservative Islam's opposition to paying interest on savings could be
in line for a shake-up after the most august institution in Sunni Islam
gave its blessing to the practice.
Traditionally, Islamic banks have only been able to pay interest that
was tied to the bank's profits.
A fixed interest rate, conservative scholars hold, is equivalent to
usury or "riba" - the earning of money without doing any work for it.
But Agence France-Presse reports that the Islamic theological research
committee of Egypt's Al-Azhar institute - seen by many as the
philosophical centre of the dominant Sunni strand of the faith - has
voted 21-1 to approve fixed interest rates.
Moving on?
In practice, Egyptian banks may not notice any immediate difference.
Despite the problems traditionalists have with interest, nine out of 10
banking institutions in Egypt pay a fixed rate of interest.
And from the Al-Azhar institute's point of view the decision was
necessary.
"Religious jurisprudence means change, and it is illogical to remain
frozen while the world changes around us," Sheikh Saber Talaab, head of
the research committee secretariat, told AFP.
"So long as we do not go against what is written (in the Koran) or the
Sunna (Islamic tradition), we have a clear conscience."
Different readings
But despite Al-Azhar's importance and influence, the decision risks
stirring up controversy.
The prohibition of riba is at the heart of Islamic financial practices,
and the arguments are all the more vocal for being rooted in differences
in the interpretation of the Prophet Muhammad's writings and deeds.
For the reformers, there is a parallel between Muhammad's acceptance of
money from members of his tribe in order to finance trading caravans.
The sharing of the profits between the contributors, they say, is
broadly similar to a bank paying interest using the profits it makes on
commercial deals using the money deposited with it.
But the conservatives say that can apply only if the interest is
proportional to the profit - in other words, if depositors are taking a
risk with their money.
Otherwise, the rule of riba applies, they say.
Source: BBC online (http://news.bbc.co.uk/1/hi/business/2488525.stm)
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