RAMADAAN, THE HAJJ AND ISLAMIC BANKING
By Amman Muhammad, Managing Director Absa Islamic Banking
With Muslims around the world having recently observed the holy month of Ramadaan, and with the Hajj – the holy pilgrimage to Makkah – having drawn to a close, it is perhaps instructive to consider the concept of discipline and how it relates to Islamic banking.
Let us begin with the noun “discipline”. Taken from the Latin disciplina, meaning “instruction”, it refers in its commonest sense to the training of people to obey a certain set of rules or a code of behaviour, and by extension it refers also to controlled behaviour which results from such training.
It also gives us the word “disciple”, which in English has strong religious connotations but is actually more broadly defined as a person who follows a teacher, leader or philosophy.
One of the five pillars of Islam is fasting, or sawm. During Ramadaan, Muslims fast from dawn until sunset, abstaining from food, drink and sexual relations with their spouses. It is a time of self-purification and self-restraint; by eschewing worldly comforts, believers are able to focus on their purpose in life by being constantly aware of the presence of The Almighty.
Another of the pillars of Islam is the Hajj, the obligation on all Muslims who are physically and financially able to do so, to make the pilgrimage to Makkah at least once in their lives. This year’s Hajj, which will draw millions of pilgrims, takes place on 14 – 18 November. Shahada (the declaration of faith), Salah (prayer) and zakah (the financial obligation on Muslims to set aside a portion of their possession for those in need) make up the remainder of the pillars.
The key to the fast, as well as saving for the Hajj, is discipline. And not surprisingly, discipline is one of the hallmarks of Islamic finance. It is because of this discipline that Islamic finance is fast becoming an attractive mainstream alternative to conventional forms of finance, for Muslims and non-Muslims alike. Islamic banking affords Muslims the opportunity to conduct their financial affairs in accordance with their faith. Previously, Muslims had little option but to fall in with conventional banking for personal or business banking purposes, in the process having to compromise on fundamental issues such as interest (riba), which is forbidden in terms of Shari’ah law.
Islamic banking provides a platform for all to invest their money in an ethical way. For example, Islamic banking does not permit investment in the tobacco, gambling, pornographic or alcohol industries, amongst others. For any banking client, this represents an active choice not to support the so-called “sin” industries – and for many, that holds great appeal. You do not have to be a Muslim to achieve your banking goals through Islamic banking; you need only follow the discipline through which Islamic Banks are governed.
This discipline is so strong that even Pope Benedict XVI has remarked on its relevance to society and the banking industry as a whole. The Vatican’s official newspaper, Osservatore Romano, observed in March 2009: “The ethical principles on which Islamic finance is based may bring banks closer to their clients and to the true spirit which should mark every financial service.”
Trading in derivatives and speculative investment is forbidden in Islamic banking; Shari’ah law requires that all transactions must be backed by tangible assets. By not associating themselves with forbidden transactions such as these, Islamic banks are not necessarily exposed to the same risks as their conventional counterparts as seen to be the major cause of the recent global economic meltdown.
This is where discipline comes in: by inculcating and strictly following a set of rules, we are able to much more easily prevail over the challenges of life. In this case, adhering to the dictates of Shari’ah law was instrumental in allowing Islamic financial institutions to fare better during the recession.
During Ramadaan, fasting is the discipline that brings us closer to our Creator.
Discipline also features strongly in the lives of the Hajji, the pilgrims to Makkah. They are expected to perform several specific rituals while there as part of the pilgrimage and in accordance with the tenets of their faith, but they are also expected to spend a significant amount of time in prayer and in reflection about their lives. There is of course plenty of other, non-religious precedent for the argument in favour of discipline: for example, discipline is what helps us to raise our children to be decent, upstanding, productive members of society.
While Islamic Banking may still be in its infancy in South Africa and the mainstream world of finance, people from many different backgrounds are beginning to appreciate that the discipline that it encompasses, is a key ingredient towards financial stability and growth.
*For further information about Islamic Banking please contact Zubeir Shah on 011 022 9711 or 072 439 2035
ABSA ISLAMIC BANKING TEACHES SOUTH AFRICA’S CHILDREN TO SAVE
Absa Islamic Banking today joins hands with the national Teach a Child to Save South Africa (TCTS SA) campaign, the initiative to equip South Africa’s children with basic financial literacy skills.
The Islamic chapter of TCTS SA will be launched today at the Central Islamic School in Laudium, west of Pretoria. Absa Islamic Banking will also visit two schools in Lenasia , the Al Aqsa Primary School in Sirkon Avenue and the Al Aqsa Primary School in Duck Avenue.
TCTS SA is an initiative of the Banking Association of South Africa, as well as the South African Savings Institute, and it is supported by the Department of Basic Education. Since 2008, it has coincided with Savings Month in July.
Absa Islamic Banking is involved with the Islamic chapter of TCTS SA, which rolls out nationwide between today and 10 August, shortly before the Holy month of Ramadaan, a month of contemplation, self-sacrifice and fasting for Muslims the world over. The Islamic chapter lesson plan has been structured specifically to reflect the concept of money in Islam, and incorporates the following teachings:
• Money (or resources) is the bounty of Allah
• Money has no intrinsic value, and is merely a means of trade
• Ownership of money ultimately belongs to Allah, and its use has been entrusted to us
• Hoarding and wasting of money is prohibited
• It must be lawfully earned and spent
• Paying of Zakah (obligatory religious levy if one is eligible), in which a portion of one’s wealth is given to the poor, which represents the third pillar of Islam. Zakah purifies one’s money and uplifts the community
• Sadaqah and Lillah donations (voluntary charity) safeguard one from calamities and misfortunes
“We expect to reach at least 10 000 children with our Islamic chapter lesson plan this year, which is aimed at learners in Grades 4-7. By teaching our children to save money, we are investing in the future by equipping the next generation to prudently handle their finances and not fall into debt,” says Absa Islamic Banking managing director, Amman Muhammad.
“The lesson will teach children to learn the difference between needs and wants – and to identify which is more important, what it means to save money, where and how to open a bank account, how to draw up a budget and how to start a savings plan. Learning all of these aspects of saving will provide them with a solid foundation for their future financial wellbeing.”
Absa Islamic Banking’s participation in the TCTS SA campaign is one of the ways that it can serve the communities in which it operates, says Muhammad.
“Our faith advocates charity, and this initiative is a valuable contribution that we can make to the communities that have helped to make our bank a success. In addition, Muslim employees of Absa will also be approaching schools in communities all over South Africa as part of the TCTS SA campaign. We are proud to be associated with TCTS SA, and to play a role in securing the financial future of our children.”
ENDS
Issued by Marcus Brewster Publicity on behalf of Absa Islamic Banking.
Contact:
Zubeir Shah
Tel No: 011 022 9711
