Sunday, August 2, 2009

Profit Margin From Islamic Finance Too High - Hadi

Datuk Seri Abdul Hadi Awang (PAS-Marang) had recently called for a review on the implementation of the Islamic financial system in the country, saying the profit margin from loans provided under the system was too high.
He said the margin did not differ much with the conventional financial system, thus defeating the purpose of having a separate system.
Although the system was free of "riba" or interest, it was too profit-oriented, he added.
"This is not how the Islamic financial system should be operated because the basis for its implementation is to help those in need.
"In this context, the borrowers are the ones in need of help as they had to resort to borrowing. They should be assisted and not be taken advantage of," he said when debating the Bank Negara Malaysia Bill 2009 in the Dewan Rakyat, according to a Bernama report on July 1.
Abdul Hadi said the government should do something to make the country's Islamic financial system a truly people-oriented arrangement and to counter the negative perception that it was similar to the conventional system.
Datuk Ismail Abd Mutalib (BN-Maran) echoed Abdul Hadi's sentiment and invited the PAS president to sit down with the government to put the Islamic financial system on its right track.
Datuk Mohamad Aziz (BN-Sri Gading), who interjected, said he agreed with Ismail and asked Abdul Hadi to discuss with Umno for the benefit of the ummah.
"I agree with the Marang MP, whose views are sensible. So let's sit together and discuss," he said. - Bernama

(This story appeared in The Malaysian Reserve on July 27, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)

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