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Islamic banking flourishes in UK

Islamic banking flourishes in UK

by OnIslam & Newspapers
Source: Onislam.net

January 27, 2012

An already flourishing Islamic bank in the the United Kingdom is expanding its branches in the northern city of Yorkshire and other British cities to answer a strong demand for its Shari`ah-compliant services.
“We hope that this will give us a foothold in the Yorkshire region. We have plans to expand throughout the UK in 2012,” Imran Pasha, head of retail department at the Islamic Bank of Britain (IBB), told the Yorkshire Post on Tuesday, January 24.

“We expect a tenfold increase in business in the next three to four years. One of the key aspects of that is the agency model, where we partner with a complementary business and we use that as a springboard to go out into the target market and offer them Shari`ah-compliant products and services.”

The Islamic Bank of Britain, granted a license in August 2004, became the first Islamic bank in Britain and has continued to attract customers for mortgages.
It opened its eighth branch in the country in the office of Reeds Rains Estate agents in Dewsbury, West Yorkshire.

“The fact we’ve chosen Dewsbury to be the first agency shows the importance we attach to the West Yorkshire region,” Pasha said.
“It will allow us to access the target market in the surrounding towns and cities. We are the largest provider of Islamic retail products in the UK.
“We plan to open another five agencies across the UK this year. We will then review the performance, and if there’s demand, and the business case stacks up, we are open to suggestions of opening more outlets in the Yorkshire region,” he added.

Islam forbids Muslims from usury, receiving or paying interest on loans.
Islamic banks and finance institutions cannot receive or provide funds for anything involving alcohol, gambling, pornography, trafficking, sexual trading, tobacco, weapons or pork.
Shari`ah-compliant financing deals resemble lease-to-own arrangements, layaway plans, joint purchase and sale agreements, or partnerships.
Investors have a right to know how their funds are being used, and the sector is overseen by dedicated supervisory boards as well as the usual national regulatory authorities.

Islamic banking is one of the fastest growing financial sectors in the world.
The Shari`ah-compliant system is now being practiced in 50 countries worldwide, making it one of the fastest growing sectors in the global financial industry.
Currently, there are nearly 300 Islamic banks and financial institutions worldwide whose assets are predicted to grow to $1 trillion by 2013.

Islamic Banking

With London becoming a hub for the Islamic banking, the IBB eyes to take a share of the booming industry.
“We’re hopeful of capturing 30 to 40 per cent of the target market. Over the last seven years, we have grown from zero to 50,000 customers across the UK,” Pasha told the Yorkshire Post.
“This year we’ll be looking at re-launching our commercial property finance proposition, which will be looking at bespoke deals for the target market.”

A deepening debt crisis in the West gave Islamic banking an increasing credibility, becoming a safer and more stable alternative to conventional finance.
“The recent economic crisis has been a boon for us. We have people of different faiths, ringing us up and enquiring about how they can apply for it,” Pasha said.
“It’s about having an alternative to interest-based banking, which is fair and transparent and which also conforms to their ethical beliefs.”

The bank intends to educate its customers of all beliefs about the benefits of Islamic finance
“There’s a large group (of customers) who want to see people face to face. Traditional banks and traditional building societies have lost sight of that. We want to be a community bank,” said Simon Walker, the head of home purchase plan sales at the IBB.
“It’s about reaching out to the community through different distribution channels. One of the key pillars of our growth over the next four or five years is commercial property finance.

“The Muslim community in the UK is 2.5m people. That’s growing at a fairly rapid rate. We want to be a one-stop shop for a range of products,” Walker added.
Sohaib Bin Hamid, the bank’s Dewsbury-based business development manager, agrees.

“We have a lot of non-Muslim clients, purely because of the way that we bank. We have no toxic liabilities,” Hamid said.
“A lot of the banks are cutting thousands of jobs – we are recruiting people. We’ve seen a big downturn and we need to contribute to getting the economy back where it belongs.”

Related Stories:

1. How the rise of Islamic banking is changing Turkey
2. HSBC eyes Islamic Banking services for Australia
3. Western debt crisis spurs Islamic Finance growth

Germany /Islam-Finance: Deutsche Bank awarded for its Islamic Finance business

By IINA– January 24, 2012

Posted in: News

BERLIN, 1 Rabi 1/24 Jan (IINA)- Deutsche Bank has won Islamic Finance news “Best Islamic Trustee/Custodian 2011” Award. In addition, Deutsche Bank received the awards for “Project Finance Deal of the Year 2011″ and “Saudi Arabia Deal of the Year 2011″ recognizing Deutsche Securities Saudi Arabia’s successful execution of Saudi Aramco Total Refining and Petrochemical Company (SATORP) Sukuk Certificates.

The awarded SATORP Sukuk was the first public project Sukuk in the Kingdom of Saudi Arabia and in the region with an innovative Sharia structure of a combination of Istisna and Ijara with Musharaka contractual overlay interposed between the two.

“We are honored to have received these awards from Islamic Finance news, as this reaffirms our dedication and focus to servicing the needs of the growing Islamic Finance market. Our expansion in Asia and MENA has fuelled impressive growth in Sukuk transactions and through our trust and custody businesses we are committed to delivering world-class solutions to our clients”, said F. Jim Della Sala, Managing Director and Global Head of Trust and Agency Services Deutsche Bank.

This is the second consecutive year that Islamic Finance news has recognized Deutsche Bank’s excellence in providing Islamic Trustee and Custody Services in their annual Global Banking Awards.

“We are very pleased to receive these awards which underline our strong commitment to Islamic Finance. The awards demonstrate our ability to adapt all types of investment products and strategies to the Sharia compliant world. The Deal of the Year Award reflects Deutsche Securities’ dedication to the Kingdom of Saudi Arabia along with its capabilities to structure complex Islamic Finance transactions”, said Ashok Aram, CEO Deutsche Bank MENA.

Deutsche Bank is a leading global investment bank with a substantial private clients franchise. Its businesses are mutually reinforcing. A leader in Germany and Europe, the bank is continuously growing in North America, Asia and key emerging markets. With more than 100,000 employees in 73 countries, Deutsche Bank offers unparalleled financial services throughout the world. The bank competes to be the leading global provider of financial solutions, creating lasting value for its clients, shareholders, people and the communities in which it operates.

AH/IINA

Sharia banking records show impressive growth in Indonesia

Sharia banking records show impressive growth in Indonesia

The Jakarta Post, Jakarta | Sat, 05/01/2010 12:12 PM

A | A | A |

Islamic banking has recorded impressive growth in Indonesia since it was introduced 17 years ago and Bank Indonesia has set a goal to make the country an Islamic financial hub in Asia, even in the world.

Central bank data reveal that assets of the Indonesian sharia banking industry has risen more than 35 times from Rp 1.79 trillion in 2000 to Rp 66.089 trillion at the end of 2009, with an impressive average growth of 53.32 percent per year over the past eight years.

In the period of 2008-2009, the industry's assets grew by an average 33.4 percent per year, well above the growth recorded by the sharia banking industry of the Southeast Asian region in the same period, which stood at 15 to 20 percent per year.

Bank Indonesia is optimistic that the industry will grow more impressively in the future as a result of the enactment of Law No. 21/2008 on sharia banking, which regulates all matters related to sharia banking. This has been indicated by, among other things, the fact that financing provisions by Islamic banks grew by an average of 22.8 percent per year and fund collection from the public by 37.7 percent per year in 2008-2009.

Meanwhile, financing to deposit ratio (FDR) of the industry reached 90 percent over the past five years - an indication that Islamic banks have been actively supporting the growth of the real sector, the bank said.

The sharia banking network has also been widely expanded throughout the country. As of December 2009, the network included 1,140 offices and 1,805 sharia services in 32 provinces. The sharia service is also supported by a network of 6,000 Joint ATMs and 7,000 BCA ATMs. The sharia banks have also utilized mobile banking technologies, allowing customers to do transactions via mobile text, phone or the internet. This is part of their efforts to provide services that fit the modern and mobile lifestyle of their customers.

The industry has recorded a relatively high growth of profitability with return on equity (ROE) reaching 25.22 percent a year in the period of 2008-2009.

"All of the above descriptions indicate that sharia banking in Indonesia is a financial industry based on the real sector and is a promising business sector for investors, entrepreneurs and the public," the bank said.

The bank added that the development of the Islamic banking system in the framework of a dual-banking system within the Indonesian Banking Architecture presents a more complete banking service to Indonesian people. Together, the Islamic banking system and conventional banking system can synergically support a greater mobilization of public funds to increase financing capability to boost the country's economic development.

"With the human resources and the natural resources potential that we have, Indonesia has an opportunity to become the platform of an Islamic financial center or Islamic financial hub in Asia, even in the world.

"The realization of Indonesia as the world center of the Islamic economy is expected to open wider opportunities for financing sources from the international Islamic financial markets to make investments in many potential sectors in Indonesia.

"To materialize this vision, the President of the Republic of Indonesia has put Islamic banking and financial development on the national agenda," the bank added.

Citing the positive characteristics of Islamic banking, Bank Indonesia said Islamic banking put emphasis on fair transactions, ethical investments, togetherness and brotherhood in production and avoidance of speculative activities. All these benefits are "available not only to Muslims but to all Indonesian people without exception."

Islam in Europe

Profits in the Name of Allah 

Sharia Banking Comes to Germany

By Christoph Pauly

Germany's Muslims are finally getting a bank offering financial products that comply with Sharia law. It is a market worth billions, and one that many major banks around the world have long discovered.

There are four million Muslims living in Germany. They eat, drink and pray in accordance with the precepts of the Prophet Muhammad. But when it comes to monetary transactions, the principles of the Koran have played hardly any role in Germany. That is about to change.

Early next year, the first Islamic bank in Germany to offer products that are in compliance with Sharia law will open its doors. The bank, Kuveyt Türk Beteiligungsbank, will open a branch in the downtown area of Mannheim, a city in western Germany, and branches in other cities are also planned.

The regulators with Germany's Federal Financial Services Authority, known as BaFin, recently issued a limited license to the subsidiary of a Turkish-Kuwaiti bank. It is only permitted to collect funds that are transferred to accounts in Turkey that conform to Islamic rules.

PHOTO GALLERY

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Photo Gallery: A Sharia Banking Market Worth Billions

In other countries, the banking industry initially catered to Muslims on an equally small scale. But less than 10 years after first entering the market, all major banks in Great Britain now have Islamic divisions, and there are also five Islamic banks in the country.

The Prophet Muhammad's Prohibition of Interest

Worldwide, assets worth well over $700 billion (€470 billion) are now being managed in accordance with Islamic principles. In Germany, on the other hand, virtually no banks have so far even addressed this market.

The underlying concept of the Islamic banking business is the Prophet Muhammad's prohibition of interest. Like Jesus in the New Testament, Muhammad took action against the usurers of his time, who exploited their contemporaries by charging them exorbitant interest, sometimes well over 100 percent. Muhammad summarily prohibited charging interest unless something was provided in return. Since the 1970s, Islamic banks have sought to satisfy this requirement by offering their customers financial services on the basis of interest-free transactions.

Instead of interest, customers are promised a share in the profits of the bank. However, commercial activities can also be financed in which the Islamic saver collects a surcharge at a level similar to conventional interest.

Instead of taking out a loan to build a new factory, for example, a company would offer its investors a share of its profits. The important aspect of all of these transactions conducted in the name of Allah is that they are in fact based on a real exchange of goods or services. "The connection to reality must be clear," says Michael Saleh Gassner, a financial expert with the Central Council of Muslims in Germany.

Since the financial crisis, the principles of Islamic investors have also attracted the interest of conservative Christian investors. After all, the underlying concept seems so pleasantly removed from the speculative greed of Western financial executives.

Besides, the stock indexes that contain companies selected according to Islamic principles have sometimes outperformed comparable indexes without the religious association. Sharia-compliant banking transactions are "in a position to assume a global leadership role," says Susilo Bambang Yudhoyono, president of the world's most populous Islamic country, Indonesia.

No Investment in Gambling or Sex Trade

Investments that comply with the Koran still represent only 1 percent of the total market, but the market is growing is by 15 to 20 percent a year. Customers from the oil-rich Persian Gulf region, in particular, insist that their capital must be invested in accordance with religious criteria.

In addition to the prohibition of interest, it is also important to ensure that funds are not invested in gambling or the sex trade. Companies that are heavily in debt are excluded, because the large amount of interest they pay is seen as the work of the devil.

The Munich-based insurance giant Allianz and Deutsche Bank have set up funds and certificates to satisfy Sharia-based criteria, but these products are only actively marketed in Islamic countries. "It is a business requirement in the Gulf region to offer products that conform to Sharia," says Hussein Hassan of Deutsche Bank in Dubai. The bank's Gulf region division is already responsible for 20 to 25 percent of profits.

There is no absolute certainty over which transactions conform to the principles of the Koran. Banks address the problem by appointing well-known Islamic scholars to so-called Sharia supervisory boards, which examine all bank products. In the Gulf region, there are about 10 religious scholars who provide consulting to almost every major Western bank and now have their own large staffs.

This leads to the creation of quasi-religious rating agencies, whose pronouncements have many a London investment banker shaking in his boots. Because different religious leaders interpret the Koran in every country, Deutsche Bank has appointed different Sharia supervisory boards for its businesses in Malaysia, Saudi Arabia and the Gulf region.

Markets Paralyzed by a Fatwa

It is clear that clerics can paralyze entire markets with a fatwa, as Muhammad Taqi Usmani demonstrated in 2007. The renowned religious scholar from Pakistan decided that most modern versions of Islamic bonds, known as Sukuks, were not in compliance with Sharia. He imposed a ban, which affected a booming market in which governments, real estate developers and companies raised about $50 billion in capital in 2007 alone.

The business collapsed. The Dubai-based real estate developer Nakheel is currently fighting to survive. The company had borrowed $3.5 billion to build dozens of artificial islands off the Dubai coast for tenants like football star David Beckham. In December, it will become clear whether the largest Sukuk ever issued can be disbursed. Muslims worldwide hope that Dubai will intervene on behalf of the borrower.

This investment sector is at least showing initial signs of recovery. Deutsche Bank introduced two Sukuks, for the Kingdom of Bahrain and for the Islamic Development Bank, into the market this year. Within a few years, the German bank has become one of the major players in the Islamic banking business. Its investment bankers are considered to be particularly creative when it comes to complying with the interest prohibition, while nevertheless offering investors the greatest possible security.

"The products the investment bankers dream up are sometimes bizarre," says Volker Nienhaus, the president of the University of Marburg in western Germany, who has been studying the Islamic banking industry for 30 years. The circumvention of interest stimulates the fantasy of financial engineers, says Nienhaus. For example, an important part of the platinum trade on London's derivatives exchange is indirectly attributable to Sharia. Because platinum, unlike gold and silver, was not a means of payment in Muhammad's day, the precious metal is now used as collateral for short-term financial transactions.

With some creative finesse, a surprising number of Western financial products can be executed in accordance with Islamic law. "The key Sharia products could be offered in Germany," says Robert Elsen, an advisor in BaFin's international division. According to Elsen, there are "no insurmountable obstacles."

Inspired by the British Model

The German financial regulators plan to host a major international conference next week in Frankfurt am Main to address the issue in Germany. If only to attract more business to German markets, BaFin, inspired by the success of the British model, is now eager to approve more financial institutions that offer Islamic products.

Although the Islamic banks were originally established for wealthy Arabs from the Gulf region, British Muslims are now among their most devoted customers. There is also political support for the development of Islamic financial centers in Paris, Zurich and Geneva.

So far the boom has bypassed Germany, despite the results of new studies showing that no other country in Western Europe has such a large Muslim population. The official explanation is that the Turks living in Germany are not particularly interested. But German financial professionals also fear that they could lose more of their existing customers by introducing Sharia-compliant products than gain new customers.

That argument, says Zaid el-Mogadeddi of the Frankfurt-based Institute for Islamic Banking, is pretty arrogant. He cites surveys that conclude that 75 percent of all Muslims in Germany would like to avail of Islamic financial products. According to Mogadeddi, between 1995 and 2002 Turks lost many billions of euros with "Islamic" shares in companies that had been floated by swindlers, and they now have a strong interest in products from established banks.

Islam-compliant real estate financing arrangements are considered particularly promising. In these situations, banks and customers purchase real estate together, with the customer contributing a share corresponding to his equity. The bank pays rent for the rest, gradually acquiring the remaining shares. As a result, no interest accrues, but the property acquisition tax is charged twice.

Sharing the Risk

The same problem used to exist in the UK. Then Prime Minister Gordon Brown, who was finance minister at the time, insightfully abolished the double tax burden. The Central Council for Muslims is now calling for similar measures to be taken in Germany.

A second stumbling block can also be removed with a bit of good will. Under Sharia law, Muslims who deposit money with a bank must also participate in the bank's risk. But what happens to the deposit insurance, which is set by the government? It comes into effect when a bank becomes insolvent. In fact, consumer advocates across the board have welcomed a recent increase in the deposit insurance limit to €50,000.

In Great Britain, a Muslim customer can expressly waive the insurance of his deposits in an individual agreement. The fact that the British government, in the course of the financial crisis, has nationalized entire banks is probably something like an Act of God under Islamic law. At any rate, there are no signs so far that a significant number of Sharia supporters have legally challenged the government's bailout of their bank.

Translated from the German, Der Spiegel by Christopher Sultan

The Economic System of Islam : The Sources of Islamic Economics

Introduction

As a complete way of life,  Islam has provided guidelines and rules for every sphere of life and society.  Naturally, a functioning economic system is vital for a healthy society, as the consumption of goods and services, and the facilitation of this by a common medium of exchange, play a major role in allowing people to realize their material and other goals in life.

Islam has set some standards, based on justice and practicality, for such economic systems to be established.  These standards aim to prevent the enmity that often occurs between different socioeconomic sections.  Of course, it is true that the gathering of money concerns almost every human being who participates in transactions with others.  Yet, while these standards recognize money as being among the most important elements in society, they do not lose sight of the fact that its position is secondary to the real purpose of human existence, which is the worship of God.

An Islamic economic system is not necessarily concerned with the precise amount of financial income and expenditure, imports and exports, and other economic statistics.  While such matters are no doubt important, Islam is more concerned with the spirit of the economic system.

A society that implements Islamic laws and promotes Islamic manners will find that it bring together all the systems – social, economic, and so forth – that it deals with.  Islam teaches that God has created provision for every person who He has brought to life.  Therefore, the competition for natural resources that is presumed to exist among the nations of the world is an illusion.  While the earth has sufficient bounty to satisfy the needs of mankind, the challenge for humans lies in discovering, extracting, processing, and distributing these resources to those who need them.

Islam consists of a set of beliefs which organizes the relationship between the individual and his Creator; between the person and other human beings; between the person and universe; and even the relationship of the person to himself.  In that sense, Islam regulates human behavior, and one type of human behavior is economic behavior.  Economic behavior is dealt by Muslims as a means of production, distribution, and consumption of goods and services.  In Islam, human behavior -whether in the economic area or others - is not value free; nor is it value neutral.  It is connected with the ideological foundation of the faith.

The Sources of Islamic Economics

The fundamental sources of Islam - the Quran and the Sunnah of the Prophet[1]- provide guidelines for economic behavior and a blueprint of how the economic system of a society should be organized.  Therefore, the values and objectives of all “Islamic” economic systems must necessarily conform to, and comply with, the principles derived from these fundamental sources.  The purpose of these articles is to outline the most salient characteristics of an economic system based on the fundamental sources of Islam.  The focus here is on the principal features of the Islamic system.

The Islamic economic system is defined by a network of rules called the Shariah.  The rules which are contained in the Shariah are both constitutive and regulative, meaning that they either lay the rules for the creation of economic entities and systems, as well the rules which regulate existing one. As an integral part of the revelation, the Shariah is the guide for human action which encompasses every aspect of life – spiritual, individual, social, political, cultural, and economic.  It provides a scale by which all actions, whether on the part of the individual agents, society, and the state, are classified in regards to their legality.  Thus there are five types of actions recognized, namely: obligatory; recommended; permissible; discouraged; and forbidden.  This classification is also inclusive of economic behavior.

The basic source of the Shariah in Islam is the Quran and the Sunnah, which include all the necessary rules of the Shariah as guidance for mankind.  The Sunnah further explains these rules by the practical application of Prophet Muhammad, may the mercy and blessings of God be upon him.  The expansion of the regulative rules of the Shariah and their extensions to new situations in later times was accomplished with the aid of consensus of the scholars, analogical reasoning - which derived rules by discerning an analogy between new problems and those existing in the primary sources - and finally, through textual reasoning of scholars specialized in the Shariah.  These five sources - the Quran, the Sunnah, consensus of the scholars, analogical reasoning, and textual reasoning - constitute the components of the Shariah, and these components are also used as a basis for governing economic affairs.

Justice

In summary, we can say that the Islamic Economic system is based upon the notion of justice  It is through justice that the existence of the rules governing the economic behavior of the individual and economic institutions in Islam can be understood.  Justice in Islam is a multifaceted concept, and there several words exist to define it.  The most common word in usage which refers to the overall concept of justice is the Arabic word “adl”.  This word and its many synonyms imply the concepts of “right”, as equivalent to fairness, “putting things in their proper place”, “equality”, “equalizing”, “balance”, “temperance” and “moderation.” In practice, justice is defined as acting in accordance with the Shariah, which, in turn, contains both substantive and procedural justice[2]  covering economic issues.  Substantive justice consists of those elements of justice contained in the substance of the Shariah, while procedural justice consists of rules of procedure assuring the attainment of justice contained in the substance of the Law.  The notion of economic justice, and its attendant concept of distributive justice,[3]  is particularly important as an identifying characteristic of the Islamic economic system.  The rules governing permissible and forbidden economic behavior on the part of consumers, producers and government, as well as questions of property rights, and of the production and distribution of wealth, are all based on the Islamic view of justice.

The following topics will be discussed in the following articles:

(a)   individual obligations, rights, and self-interest;

(b)  property rights;

(c)   importance of contracts;

(d)  work and wealth;

(e)   the concept of barakah;

(f)   economic justice;

(g)   prohibition of interest (riba);

(h)  competition and cooperation; and

(i)   the role of the state.

The Ideological Basis of Economic Activity

The ideological basis in Islam may be summarized into six basic principles:

The cornerstone is that everything has to start from the belief in God as the Creator, Lord, and Sovereign of the universe.  This implies willingness to submit to God’s will, to accept His guidance, and to have complete and unqualified servitude to Him.  This means that Muslims - individually and collectively - should not imitate or emulate any other system if it differs from their particular principles, for example, the system of usury or interest.

The second basic principle is that Islam, as a religion, is a complete way of life; something that guides a person’s life in all its aspects: the moral, social, ethical, economic, political, etc.  All of these aspects are based on the guidance of God.  Therefore, it is not a question of the person’s acceptance of God’s teaching in one matter and the refusal of acceptance in another.  Everything has to be within that basic guidance.

“…And we have revealed to you  in stages this book, a clarification of all things, a guidance, a mercy, and glad tidings…” (Quran 16:89)

A third principle is that God created human beings on earth as His trustees, which means that everyone is created to fulfill a certain responsibility on this earth.  God has entrusted human beings with free will in order that they live their lives according to the moral and ethical values that He Himself provided.  In addition, Islam provides an opportunity in material progress, thereby combining moral, social, and material progress, all interlinked in harmony.

The fourth principle is that God, in order to help humankind to fulfill the responsibility of trusteeship, has made everything in this universe subservient to them.  There are many verses in the Quran that suggest this meaning, such as:

“God is He Who made subservient to you the sea that the ships may run therein by His command, and that you may seek of His grace, and that you may give thanks.” (Quran 45:12)

This does not mean, however, that humans are given free reign to use and abuse the resources God has provided us however we choose.  Rather, there are many verses that urge humankind to harness the various resources that God has made available to them on this earth responsibly.  Humans are encouraged to enjoy of the good things that God has created, but they are to do so within the boundaries that He has given.  Doing so is not regarded as sinful as long as it follows His path and does not transgress His limits.  God says:

“It is He Who produces gardens, with trellises and without, and dates, and tilth with produce of all kinds, and olives and pomegranates, similar (in kind) and different (in variety): eat of their fruit in their season, but render the dues that are proper on the day that the harvest is gathered.  But waste not by excess: for God loves not those who waste.” (Quran 6:141)

The fifth principle is the principle of accountability in the Hereafter.  God has given human beings trusteeship and resources.  This means that every single person will be questioned on the Day of Judgment as to how he or she behaved whilst enjoying his or her earthly life.  This, of course, includes our economic behavior.  God says:

“And then on that Day (the Day of Resurrection) you will be called to account for every comfort and delight [we bestowed upon you].” (Quran 102:8)

The sixth principle is that the variation in wealth among people in itself does not give a person either inferiority or superiority.  Rather, poverty and affluence are in the total control of God Who, out of His Infinite Justice and Wisdom, has specified these things for whom he chooses.

“Indeed God increases provision to whom He pleases and straitens it [in regards to others]…” (Quran 13:26)

Affluence, like poverty, is also seen as a trial from God, one through which it is seen what one will do with their wealth – indulge oneself or use constructively in ways legislated in the religion, God says:

“Your wealth and your children are only a trial, whereas God! With Him is a great reward (Paradise).”(Quran 64:15)

After being bestowed with numerous gifts and bounties and a kingdom incomparable to any other on the earth, God in the Quran narrates that Solomon said:

“…This is from the bounties of my Lord, to test me whether I will be thankful or ungrateful…” (Quran 27:40)

God is not concerned with the amount of wealth a person may have amassed, their beauty or color, but rather, His measure of honor is the piety of the hearts.  God says:

“On humankind! Indeed We created you from a male and female, and we made you different nations and tribes, that you may come to know one other.  Indeed the most honored amongst you are the most God-conscious.” (Quran 49:13)

The Prophet also said:

“Indeed God is not concerned with your appearances nor your wealth, but rather your hearts and deeds.” (Saheeh Muslim)

As one can immediately surmise from these principles that the Islamic economic system is radically different from others, due to the difference of the values upon which it is based.  In a capitalist society, one may see certain rules of economics which take precedence over moral and ethical values due to the intrinsic nature and values of that system.  The same may be seen in communist, socialist and other societies as well.  From the principles mentioned in these articles does the Islamic system of economics spring, striking balance between personal benefit and the benefit of society as a whole, as well as mundane profits and spiritual gains, all which ensure that one gain the Pleasure of the Lord of the Worlds.

____________________________

Footnotes:

[1] The Sunnah is general body of narrations of the speech, deeds, and tacit approvals of the Prophet.

[2] “Substantive justice means reaching the ‘right’ result. Procedural justice means getting the result in the ‘right’ way.”  (A speech entitled “Effective Arbitration Techniques in a Global Context” delivered by the Secretary for Justice of Hong Kong ,Ms Elsie Leung)

[3] “Normative principles designed to allocate goods in limited supply relative to demand.”  Stanford Encyclopedia of Philosophy: (http://plato.stanford.edu/entries/justice-distributive/)

Police pay Muslim student £20k over wrongful terror arrest

Issue 269, Friday 30 September 2011 - 25 Shawwal 1432

By Elham Asaad Buaras

 Nottinghamshire Police have agreed to pay Rizwaan Sabir has received £20,000 in an out of court settlement

A student who was arrested and held for seven days after downloading an edited version of terrorism manual from a US Government website as part of his research has received £20,000 in an out of court settlement with the police on September 15.

Rizwaan Sabir was arrested three years ago after downloading ‘The Al-Qaeda Training Manual’ available in book form from Amazon for his postgraduate research into terrorist tactics at the University of Nottingham.

Sabir was in the process of preparing his forthcoming PhD proposal and was being advised by his friend and university administrator, Hicham Yezza.

Sabir often sent Yezza copies of documents he was using for his research and the Al-Qa’ida manual was one of them. On May 14, 2008, the document was noticed on Yezza’s computer by a colleague and as a result the university authorities notified the police.

Yezza and Sabir were arrested under Section 41 of the Terrorism Act 2000 on suspicion of being involved in the “commission, preparation or instigation of an act of terrorism.”

Both men were eventually released on May 20, although Yezza was re-arrested on unrelated immigration issues.

Sabir now studying at the University of Strathclyde subsequently brought proceedings against Nottinghamshire Police for false imprisonment and breaches of the Race Relations Act 1976 and the Human Rights Act 1998.

In a statement to The Muslim News Sabir’s solicitor, Michael Oswald, said the case presented “one example of the way in which the War on Terror has been allowed to pervert the rule of law over recent years.

“Clearly, the police have a difficult and important job to do in their counter terrorism role, however, they must nonetheless act within the law and must be held to account when they do not. Through his remarkable effort and fierce determination over the last three years, Mr Sabir has been able to hold the police to account for their failings. This result is nothing more than the clear vindication to which he is entitled.”

But Nottinghamshire Police insisted that the settlements should not be seen as an admission of liability. Instead a spokesman for Nottinghamshire Police told The Muslim News that decision to make an out of court settlement was primarily an economic one.

“This was a matter that was going to go through court proceedings, which whatever the outcome, was would generate costs for both sides. So it was decided rather than go through the lengthy and costly process that a settlement would be agreed as a way of minimising any costs.”

Nottinghamshire’s Chief Constable, Julia Hodson, had issued an apology “for any embarrassment, frustration and distress caused” by a stop and search on Sabir in February 2010.

But Nottinghamshire Police say they “stand by the fact that the arrest, detention and obtaining of a warrant of further detention were all perfectly legal, proportionate and necessary in the circumstances as they were in 2008.”

However, Sabir has hit back at Nottinghamshire Police explanation accusing the force of “spinning” the outcome of the settlement for “political reasons”.

“What they are doing is spinning, because the police don’t pay £20,000 and all my legal fees, clear my intelligence file and apologise for a stop and search if they acted proportionally and reasonably,” he told The Muslim News.

“They can spin what they like. Anybody who knows what happened and has followed what happened will be able to understand quite clearly that this is an admission of guilt by the police,” he said.

Sabir is adamant that he was arrested purely because of his faith, “I don’t think there are any sort of misunderstanding that these terror laws are used for Muslims and in that process, laws, policies and strategies it is the thoughts and actions of Muslims that are criminal.

“So if a non-Muslim had downloaded the Al-Qa’ida training manual from a US Government website, which hundreds of them have for their research and academic purposes, they are not arrested but when a Muslim does it then it becomes a crime. So what we have is the laws being carried out by officers who are quite openly discriminating against Muslims.”

Sabir’s former personal tutor, Dr Bettina Renz, reiterated that view. Speaking to The Muslim News at the time of his arrest she said that Sabir’s Muslim faith “undoubtedly played a part” in him getting arrested.

Nottinghamshire Police also admit they had to amend “some records held on” Sabir, which Sabir says falsely claimed he was a terror convict and led to him “being subject to numerous stops and searches.”

Also under fire in the case is the conduct of officials at the University of Nottingham who Sabir accuses of “washing their hands of any responsibility” despite being “equally complicit” in his and Yezza’s ordeal.

“They reported us [to the police] without carrying out any kind of diligent investigation which they are advised to by Government guidelines, they totally rejected any such guidelines and called in the police and when they did they failed to admit they made a mistake and instead decided to start a campaign against me in trying to remove me from the university despite my innocence,” said Sabir.

He also described the Government’s Prevent strategy which applies pressure on universities to monitor and report extremisms in campuses as “very problematic…it is a Prevent mindset that caused those university managers to call the police because they didn’t want to take a risk. Is it acceptable that non-qualified members of the university who have no idea about security and counter-terrorism are being given such a serious responsibility to counter-terrorism? It’s not appropriate this is really dangerous territory. What you’ll have is more people being arrested, detained and put forward for monitoring programmes when they are entirely innocent,” argued Sabir.

A spokesman for the Home Office refused to comment on the case insisting it is “a matter for the police.”