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ZAKAT - The Need For Total Accountability [2011] There is a great deal of emphasis on why one should pay Zakat throughout the world but a total lack of transparency over how it is spent. There is also a great deal of manipulation over its distribution. Often huge amounts of Zakat is handed out to Islamic institutions and Islamic organisations serving specific interest, not public interest. Many recipient agencies and organisations (their officials) spend Zakat funds as if they earned it or own it. There is a need to get our priorities right over the spending of Zakat. We have to ask ourselves whether all the Zakat dished out to Islamic institutions and Islamic NGOs have resulted in the improvement of Muslim society? Is a television programs or a magazine resolving issues or is it enriching individuals? We have to ask ourselves whether such institutions are there to solve the employment rate in the community or to serve the community as a whole? This is important because a great of Zakat is spent in this manner throughout the world. We then have to compare it with this scenario. Would it not be better to establish commune centres to enable drug addicts, poor and needy families, to be housed and given work so that they may earn a living and protect their honour rather than go begging in the streets or indulging in theft and robbery, or going to some church? We all need to realise that Zakat collected needs to be spent not only in God’s name but with responsibility and accountability. It’s not ours to use as we like! I remember many years ago, the director of Baitulmal Selangor, on a visit to ‘Rumah Selangor’, he addressed the students there, calling upon them to complete their studies on time (3 years). They should not do so in 7 or 10 years because they are using Zakat funds, and that it was not a right that they were entitled to. Topics / Main Page of Islamic Preview Are Islamic Banking Institutions Really Islamic? - 24th September 2002 How Islamic are Islamic Banking Institutions? This is a case study which should be taken up legally. I withdrew my Employees Provident Fund on retirement. The sum was RM32,000.00. I then placed this sum at CitiBank in a Time Deposit Account for about maybe two years. During that period I received "interest" as some would term it, however, I am of the view that one-point plus percent is actually my share as the bank would have utilised my money while it was with them. This is a debatable issue that has to be looked in at some other time. I was advised by an officer that it would be more viable for me to place my money in an Islamic Trust Fund as it would earn me more money plus make my increases halal. It sounded like a good idea. So I closed my Time Deposit Account and had RM32,000.00 put into AM TABUNG ITTIKAL FUND. As time passed by I became aware of the following:
Something is terribly wrong here with this system, thus my question: Are Islamic Banking Institutions Really Islamic? Or are they mere conversions from Conventional Banking practices?
The following was received from Sahib Mustaqim Bleher in response to my query: I also of the view that so-called Islamic banks are about as Islamic as the halal pork chop. They have indeed devised technicalities by which interest appears in a different guise. However, the whole issue is more complex than you suggest. To start with the definitions of "riba" (usury/interest), there is the hadith stating "every loan which accrues a benefit is usury". So a loan, the purpose of which is after all to help somebody in hardship, must not result in a profit for the lender. Islamic banks often apply an administration charge to cover the devaluation of money over time, but this gets us in even deeper waters. Islamically, the various functions of money must be kept separate: it can be a store of wealth, a measure of wealth, or a means of exchange, but it should never be a multiple of these functions at one and the same time. This is why it was forbidden to exchange dry dates for fresh dates directly, and the prophet - peace be with him - instructed to instead sell one kind of dates for some other commodity, and then purchase the other kind of dates with this. The reason is that dates were a commodity on the one hand, but also used as money, and the two functions should not be mixed up or we would end up with a situation where an old pound note is only worth half a new pound note: the whole security build into a system of exchange would disappear and we would no longer have a firm standard, a bit like a meter changing in length depending on what fabric you are going to buy. Islamically, if money is to be invested (rather than given in charity or lend without charge for humanitarian reasons), this can be done through participation in a profitable business enterprise as a sleeping partner. However, there is a risk involved in that the investor would share both profits and losses. He must, therefore, be cautious in what kind of enterprise he invests. You are right that banks (including Islamic ones) don't carry any risks, and this one-sidedness makes the contracts described as Islamic anything but. Because they don't carry any risk themselves, they don't mind whom they lend to, they always get their return. Again, there is more to it than meets the eye, because in addition they lend what they don't actually have. For every pound in their tills, banks lend a multiple of fiat money created through mere book entry, but secure those loans against real assets. This is nothing short of fraud and more usurious even than the exorbitant interest rates of notorious loan sharks. The word Islamic in a bank's name does not make this practice any more halal, and the so-called Islamic banks get rich by the same fractional reserve method as the other banks. Again, because the money costs them nothing, they don't mind supporting the most useless and frivolous projects. The real economy of trade and enterprise has to a large degree been replaced by a false economy of book entry finance, insurance and reinsurance. This is why the money markets and stock exchanges are so fragile. The proper Islamic alternative lies in mutuals, where a limited number of individuals support each other in their borrowing needs and invest collectively in projects beneficial to the common good. Topics / Main Page of Islamic Preview |
