By Joseph Varghese/Staff Reporter
Islamic banking is a highly viable option for non-Muslims as well, said Dr Volker Nienhaus, professor of economics and former president of the University of Marburg, Germany, at a recent lecture
He also observed that while Islamic banking comprises only around 10% of global banking, it is growing steadily. Dr Nienhaus made the statements while delivering a lecture on the topic, “ Islamic Finance for Non-Muslim Clients: Are There Great Potentials?” at Qatar Faculty of Islamic Studies (QFIS), Education City.
Speaking on the benefits of Islamic financing for non-Muslims, Dr Nienhaus said: “Islamic banking has come a long way and become a viable option for everybody, including non-Muslims. A Shariah-compliant banking scheme is a better financial option as it has no excessive risks and does not engage in questionable businesses.”
Islamic banking, he added, is fundamentally not too different from conventional banking except for the fact that it does not deal with any “haram” product.
Dr Nienhaus said socially-responsible investment was gaining momentum around the world and Islamic banking could benefit from this.
“In 2010-2011, socially-responsible investment was worth $3tn in the US, while it was around $8tn in Europe. The total amount of Islamic banking for the same period was $1.6tn. The value of global financial assets through conventional banking was about $180tn,” he said, adding that socially-responsible investment was also in keeping with the ethical aspects of Islamic banking.
Dr Nienhaus stressed that Islamic banking had to go through various filters to ensure that it fully complied with all Islamic principles of financing. “Firstly, it goes through industrial screening to make sure that it does not involve any of the products that are ‘haram’ to Islamic beliefs. Then, it undergoes financial screening to ensure that the companies have a very tolerable ratio of commercial interests.”
He highlighted that in the Kuala Lumpur Stock Exchange, 85% of the shares were Shariah-compliant.
QFIS dean Dr Hatem el-Karanshawy welcomed the gathering and moderated the question-and-answer session.