Bahtatboy

Right, let's try to keep this focussed on loan interest for Muslims.

I cannot understand the debate in the UK about interest on student loans--that is, I cannot reconcile certain groups disagreeing with the principle of doing this, when I, in my capacity as a private individual, have received the following text today from Abu Dhabi Commercial Bank:

Special offer on ADCB Car Loans with interest rates starting as low as 2.99% p.a. Limited period offer till 30th Sept, 2011! To apply SMS CAR to 2626. T&C apply.

Mogs

Similarly, one of the banks on SZR (National Arab Bank) has promotional displays on their windows for Car Loans; one window say, "x% Profit Rate," and the other window has, "x% Interest Rate." One and the same thing I know but seemed strange to see them state "Interest" in public display....

Norm_uk

Good luck with that!

All I know is that the UK is supposed to be a secular country and the government has no business pandering to any religious groups demands. If they want Sharia compliant loans they can go to a Sharia compliant private bank.

If it's simply intolerable that the British government will not give concessions to the beliefs of around 2% of it's population (not that we know how many are actually calling for this, only some spokesman for one group) then perhaps the UK isn't the right place for them? With British passports most countries of the world can be visited and finding work is easier if you are skilled or educated. The minority anywhere cannot expect special treatment - everyone should follow the same rules.

Then again asking everyone to follow the same rules in Britain 60 years ago got you labeled a radical. 30 years ago you would be labeled a liberal and today if you advocate that you're called a racist.

N.

UKCityGent

Back from a vacation - ended up freezing my a.ss in lovely Iceland


I believe your question is how can a conventional bank, which is primarily interest-based like ADCB, offer Islamic banking services? Islamic law (Shariah) does not require that the seller of a product be Muslim, or that its other services also be Islamic. Shariah does not restrict commercial or financial transaction providers to be Muslims. It does require, however, that the particular product or transaction be in compliance with Shariah guidelines and that it promotes halal activities.

Going back to the original article, the repayment structure of the loans are being changed (from inflation to inflation+interest). When you have potentially 90,000 customers (not all Muslims follow Sharia strictly) any entity has to consider their needs - hence they are discussing a potential wakala type agreement (you "rent" the education for a payment (which would include a profit/interest)).

This debate is the tip of the iceberg - i believe it offers poor value to all students especially when interest rates start to become "normalised" (not for the next few years admitedly).

Norm_uk

A good response.

Going back to the article I wonder who the group were calling for Sharia compliant student loans in the UK in response to the new loans were...do they represent many Muslims and why are they asking the Government to get involved (who would trust any government to follow anything correctly, religious or secular)?

Obviously it's a sensitive issue as well because a lot of people hear the word Sharia and start thinking of inhumane animal slaughter or hands being chopped off for stealing...some think of Sharia as a sign of increasing influence of Islamic law and culture in the UK. Whether they are right or wrong is of course another debate but there's no denying the increasing sensitivity to all things Sharia among the native working classes particularly. No doubt the media fans flames (as always) and certain groups take one inch and make a yard.

I still wonder why the Government needs to be involved at all in this issue. Then again I wonder why it has to loan money to citizens just so they can study but seems to have enough money to send hundreds of millions in foreign aid and what is essentially bribes to other governments, many of whom don't need it. I also wonder why the government doesn't just turn around and give completely free vocational education for those professions crying out for skilled workers and stop funding study of things we only have a limited amount of jobs for (like fashion, media, sociology). The government also seems to have enough money to keep masses of people on benefits, many of whom are capable of working.

N.

UKCityGent

Sharia is a more than a legal course of action it is a code of conduct - that is the key difference. It is not a replacement of the legistation in the country which the Muslim resides. Muslim communities have established Sharia courts to deal with family or business disputes - they are usually of a arbitration or mediation services.

The misrepresentation of Sharia by focusing on beheadings in Saudi Arabia is of an equivalent as America's electric chair, or China hanging policy. Whilst Sharia does includes provisions for capital and corporal punishment, getting to that stage is in fact quite difficult and very cumbersome.

The OECD for 2010 states that the UK gave GBP13.5b which is 0.56% of GDP as aid (which had been pledged) - rather than look for the pennies it is the pounds which worry me (e.g. GBP80b to prop a bank which as a business should have been thrown to the wolves or sold to me for 99 cents!!!) -

As a sideline: whos gets the keep the dividend payments from the nationalisation of the banks ???

Norm_uk

It's easy to explain to a person (even someone who is anti-Islam) that Sharia is a bit more complex and diverse than Saudi Arabia/Iran and beheadings), that there are different schools of thought, different interpretations and different implementations. Trying to explain that to the media or to groups of people who already have gripe/concerns (legitimate or not) and may not be well educated or informed is another matter. It’s still a sensitive issue as it’s seen as a different law/code of conduct in many western eyes – and like most groups of people that which is different/foreign can be hard to accept or tolerate, especially in the climate of wider perceived/real immigration issues and the apparent limits on how much people can even say on these issues without being put into the extremist/racist category.

On the subject of the banks – I think some should have been allowed to fail. If were actually capitalists we wouldn’t be propping up poorly run organisations with the tax payers money (that opens up a can of worms regarding the massive civil service in the UK!). That said some banks are truly too big to fail without serious consequence so perhaps a cap on how big banks can get is the best way forward. I honestly think the only way forward and out of this mess for the UK is to seriously tackle the trade deficit. Politicians have fed the baby for too long, giving us far more than we make to keep voters sweet and happy. Bread and circuses is unsustainable in the long run.

You know I have no idea who gets to keep the dividends from banks that have been nationalised. I would imagine the Government as they are now shareholders…I'll have to look this up.

N.

seven seas

Come on BB. ADCB is not a sharia-compliant bank, so it pays interest on deposits as well as 'earning' it for loans. There are 'islamic' banks, like ADIB.

Anyway, just because one muslim does something that does not comply with islam , you can't expect all the others to do so.

In fact the people who disagree with the principle of paying interest on student loans also do not approve of banks like ADCB, NBAD etc.

There are banks that cater to this type of customer ( I think by using some semantic trickery to salve their customers' consciences ) and they will be rushing to offer their services to those in need of them. End of problem.

A little investigation will reveal that the vast majority keep their money in regular banks and that a tiny number of insignificant bigmouths got a lot more attention than they ever deserved.