BADLISYAH: Islamic finance has heritage from all over the world

Xin Nian Kuai Le!

I believe it’s not too late for me to wish all my Chinese family members and friends a wonderful and prosperous new year of the horse. Being part Chinese on my mother’s side (though one can never tell from my looks), I always look forward to the advent of Chinese New Year every time the cycle comes.



I feel truly blessed to have many great heritage that have influenced and continue to influence my outlook in life and how I live it.



Many would be surprised to know that my immediate ancestry includes Malay, Chinese, Indian, Arab, Portugese, English and Iban up to my grandparents. It becomes even more diverse the moment I delve deeper into each heritage with genealogy that could be traced to more exotic ancestral background that have made me who I am today.



Islamic finance is just like me.



It may not necessarily be so apparent from its look and present day reincarnation but Islamic finance has in its DNA many great heritages from all over the world. It can never be identified by a single heritage like the Arabs. Unfortunately many people in the world relate to Islamic finance as something that is very synonymous with the Arabs.



Factually, Islamic finance did start in the Arab Peninsular over 1,400 years ago. It is true that it was initially managed and practiced by the Arab and Jewish communities for their commercial interactions in and around Medinah and Mekah. The Arabs and the Jewish, being the first people of the Book had the first go in putting their influence on what, why and how Islamic finance was conducted. They effectively had an exclusive run of it during the early days of the Al-Rashydun caliphates.

The influences of many other people and cultures only started later when the Iranian Plateu, the South Caucuses, North Africa and the Levant came under the Al Rashydun rule.



When the Abbasid Empire came to the fore and took on the caliphate mantle, Islamic finance expanded into Europe and the Horn of Africa with many of its practices further influenced by the cultures, customs and laws there.

The Umayyad Empires that succeeded the Abbassid and considered one of the largest global empires ever known in human history brought in a much broader influence of different culture and civilisation from different groups of people that included every part of the world except for the Americas, Australia and South East Asia.

The cultures, customs and laws of the people in South Europe, East Europe, Russia, part of modern China, Central Asia, West Africa, part of Central Africa, etc made significant contribution to shape Islamic finance and its practices, during their rein.



Islamic finance continued to be influenced and shaped by different people in various parts of the world even as the Umayyad was replaced with other great Islamic Empires of varying sizes such as the Mongol, the Fatimid, the Andalusian, the Ottoman, the Bulgar, the Kazans and many more.



As international trade grew between the Islamic Empires with other parts of the world, people with different cultures, customs and laws embraced Islam, spearheaded by great civilisations such as the Malays under the Sultanates of Acheh, Demak, Malacca, Sulu, Riau-Lingga, and so on, as well as the Indians under the Mughal Empire and the Muzaffarid Dynasty. All these great Islamic Empires in their own right had made a mark on what, why and how Islamic finance was practiced.



Even the Ming Dynasty, one of China’s greatest empires had many Muslim technocrats and aristocrats who had stamped their influence on Islamic finance. So did people in other parts of the world that was never part of the Islamic Empires. They had their influence on Islamic finance as they dealt with the Islamic Empires in trade and commerce. They are still part of the Ummah, for which Islamic finance is made for.



So, why this focus on the heritage of Islamic finance in today’s column? Isn’t Islamic finance all about Shariah and its conformity to Shariah? Shouldn’t Shariah be all and end all of Islamic finance? Why bother with the diverse cultures, customs and laws? Wouldn’t Shariah automatically override all the different heritages since Shariah should be supreme?

Just like me, Islamic finance came into being in this world as part of the Islamic world. Both our lives from birth are governed automatically by Shariah as found under the Quran (the words of God) and the Hadith (the words, deeds and affirmations of Prophet Muhammad, peace be upon him). However, both of us grew up in the different heritages that we have in our lives.

 None of the cultures, customs and laws that we have in our lives overrides Shariah but it influenced how we conform to Shariah.



Islamic finance does not conform to Shariah holistically like the Arab, Malay, Chinese, Indian, English, Spanish, Turkish ways or any other ways, but it conforms to Shariah, taking into account all the different ways that exist. The different heritages influenced how Islamic finance is done under Shariah.



At the end of the day, Islamic finance must be allowed to embrace its different heritages just like I am able to enjoy the different heritages that I have. Only then can Islamic finance truly find itself as a mainstay in the modern global financial market.



I end with a prayer for all of us to have a prosperous life in this new year of the Wood Horse.

Gong Xi Fa Cai!



[Badlisyah Abdul Ghani is ED and CEO of CIMB Islamic Bank Bhd. This column appeared in THE MALAYSIAN RESERVE, 10 Feb 2014]