I was honoured when The Malaysian Reserve asked me to write for them on the Islamic banking and finance industry.
Perhaps they like my straight talking, no holds barred approach to tackling industry issues and would like me to share my knowledge and experience with others.
So I said yes, and here I am writing my very first column. For my first, I thought I should lay down how I will write about the industry to give everyone a feel of what to expect. My viewpoints will be frank and straightforward and my writing will balance between fact-based information and my opinion.
I am no agony aunt, and I will probably be throwing my two sen-worth on anything and everything whether people want it or not. I will express my opinion on any topic of great interest to the industry or on something I feel strongly about. I may even gossip on the latest happenings in the market!
I will from time to time illuminate the various misperceptions people have on the industry such as “Islamic banks must be different from conventional banks”, “Mudharabah is the truest Islamic banking products”, “doing Islamic banking is a commandment”, “Islamic financial products are sacrosanct”, “Islamic banking products are disguised conventional riba based banking products” and more.
It boggles the mind how after 50 years of operations in over 100 countries around the world, these misperceptions STILL exist and persist to thwart the development of a robust and sustainable industry globally.
Today, as a result of these misperceptions, many jurisdictions refuse to have a comprehensive enabling legislation and regulation for the industry, with the exception of Malaysia and a few other countries. To illustrate, let me share with you what transpired a few days ago.
I was told that in a particular foreign jurisdiction not so far away, a bank could not set up a marketing booth outside its branch to sell Islamic banking products. This was because the regulator — despite having allowed the bank to offer such products — considers them to be religious products, and therefore, limits the bank from selling them in public.
Naturally I was dumbfounded.
Islamic banking products cannot be equated to religious products such as prayer mats, symbols and spiritual charms.
Islamic banking is a pure commercial transaction involving contractual relationships between two or more legal persons just like any other commercial transaction.
Get real people!!! It is a wonder how the industry became the fastest growing component of the global financial market.
There are many other irrational behaviours towards the industry caused not just by misperceptions but outright prejudice and paranoia.
I hope by highlighting them the industry will eventually outlive them. I intend to continuously provoke and challenge what is considered the truth and the norm and have some, if not all, of the misconstrued understanding on the industry thrown out the window.
[Badlisyah is CIMB Islamic executive director and chief executive officer. This is his first column for The Malaysian Reserve, 19 Nov 2012. His column, entitled STRAIGHT TALKING, will appear monthly in the Islamic Finance section]
