«introduction of Islamic Banking in Nigeria. The topography of the disapprobative voices was first elucidated upon. Following this, a general and ...»
Also, usury which occupies a central place in the Christian doctrine was one of the reasons why Christians had a conflictual relation with the Jews. Accordingly, John Protevi (n.d) observes, “three things inflamed medieval Christians about the neighbour Jews: that they lent money at interest (usury); that they were responsible for the death of Christ; that they sacrificed Christian children.” One is least surprised that both in the fourth and the sixth century AD, interest, was as observed Viser and Mcintosh (1998), respectively prohibited to be taken by the clergy and laity. In what appears to be actions taken in line with the spirit of the above noted Christian doctrinal provisions and Excogitative Deconstruction of the Discourse Dynamics of the Controverted Non-Interest.... 27 theological fundamentals, interest-based transactions were, respectively in the 8 th and 12th Century AD, declared a criminal offense by Charlemagne and its secular legislation voided by Pope Clement V (Viser and Mclntosh, ; Birnie, 1952).
Usury (ribba), as indicated in various Qur’anic verses, is prohibited in the Muslim doctrine as well. While the Islamic creed permits trading, it is further stated in the Muslim primary frame of reference, the Qur’an, that, usury is not only unlike trade, but also, an act which that amounts to injustice against man and disobedience to God.
Accordingly, it is said, “those who swallow usury will not stand except as stands one whom Satan by his touch as driven to madness. That is because they say: Trade is just like usury; whereas Allah permitted trade and forbidden usury. He unto whom an admonition from his Lord cometh, and (he) refrained (in obedience thereto), he shall keep (the profits of) that which is past, and his affair (henceforth) is with Allah. As for him who returned (to usury) - Such are rightful owners of the Fire. They will abide therein (Quran 2:275); “By dealing in usury, you are at war with Allah and His Apostle. If you turn back from usury you shall have your capital sums. Deal not unjustly and you will not be dealt with unjustly (Quran 2:279). In what qualifies for how extensively the Islamic creed addresses the issue of usury, all parties involved in usurious transaction...are all alike [in guilt]." (Muslim, Kitab al-Musaqat, Bab la'ni akili al-riba wa mu'kilihi; also in Tirmidhi and Musnad Ahmad).
Based on Islamic doctrinal injunctions, it evolved over time, Islamic Economic Thought (IET) and what is now referred to as IB- a nomenclature which meets with my objection.
As periodized Azim Islahi (2005), a Professor of Islamic Economics, the evolution of IET started from 11AH/632AD, a period, during IET was purely based on “Islam’s internal sources.” As further observes Islahi, from 100AH/718AD onward, through various forms of contributions, the IET underwent a series of philosophical and intellectually enriching developments, before it experienced stagnation between 10AH/16- 17AD. As further documented by Islahi, it was in 14 AD/20AH that the IET modern phase begun, hence, providing alternative economic model in a world community that is largely influenced by capitalist economic and political philosophy. It is within this milieu that one may partly explain why NIB/IB is an alternative banking that is being embraced in different parts of the world, Europe and America inclusive. There is no such 28 Journal of Islamic Economics, Banking and Finance, Vol. 9 No. 1, Jan - Mar 2013 evidence, at least to the best of my knowledge, that there exists any well-developed NIB model or economic thought as it is with the IET and IB. Why the embrace? a discerning mind might want to know.
The Rationale for the Embrace of NIB versus Disapprobatory Voices A number of reasons seem to be responsible for this embrace. In order for the intended points to be lucidly understood, an illustration that is based on some of the modes of financing under the IB will be used in showcasing the reason for the embrace. There is under the IB, a package known as murabaha which is based on the sales contract. It is a sales transaction in which an IB is approached by someone who wants a commodity procured on his behalf. Here, there are two buyers, one of which is also a seller. Upon procuring the commodity, the bank would inform the prospective purchaser and provide him/her with the actual amount that the commodity was obtained. Given that the transaction in IB is trade-based, the bank and the prospective purchaser would negotiate the selling price and the payment pattern. Since the money used in financing this transaction by the bank would be obtained through mudaraba, (another Islamic finance mode that will be explained subsequently) the bank would share the profit made on such transaction with the depositors/investors based on a ratio that had been mutually agreed upon by the bank and the investor/depositor. Throughout the payment period, no increment in the selling price will take place as there is no room for charging interest.
The refusal of the buyer to procure the commodity from the bank (selling entity) might though lead to the former being blacklisted; the risk is borne by the bank alone. This is a sort of capital/ trade financing. Unexplainable delay associated with the payment arrangement would require the defaulting purchaser to make charitable donations and not to pay any amount to the bank’s covers, hence, the enormous contribution to societal development. This is not the case with its equivalent in CB financing model in which regardless of the circumstances warranting the delay in payment, not only does interest (which is known to fluctuate) accrues and accumulates, the interest which is also capitalized would be to the benefit of the bank and not the society. Again, unlike the case of CB whereby a defaulter’s collateral would be sold regardless of its value and the proceed pocketed by the lending bank alone, in a mudaraba, if the situation warrants recovering the bank’s due through the sales of the collateral, excess made from it would be returned to the purchaser. Note also be taken that what the Islamic bank would deduct Excogitative Deconstruction of the Discourse Dynamics of the Controverted Non-Interest.... 29 from the sold collateral would be the outstanding amount yet to be paid by the defaulter (Ayub 2007).
By contrasting the advantages which mudaraba offers a client with the earlier cited Okogie’s statement which reads, “we are against the operation of Islamic banking in Nigeria because we see it as another deliberate move to subjugate Christians in Nigeria” it is obvious that rather than subjugate, the IB bails out clients who could be Muslims or non-Muslims by bearing risk alone, such which is not the case with CB which is being promoted by Okogie. Granted that profit and liabilities are shared in a murabahamudaraba arrangement as explained above, such, which is not the case with the CB, the IB qualifies as a potent tool of equitable economic empowerment for a client, hence, invalidating Okogie’s claim that it is a tool of subjugation. Also, by alluding that IB is another deliberate move to subjugate Christians in Nigeria, it is only appropriate to interpret this as implying that, while the IB packages would empower Muslims, it would subdue Christians economically and politically. Another contextual reading of this statement is that it suggests that only Muslims will be allowed investment or admitted as a client in an IB operation. The statement also qualifies as an acceptance of the capacity of IB to empower, since, the effect of what subjugates someone is that, it will lead to the empowerment/benefits of the other. However, a look at the operational policy of the Islamic Bank of Britain (IBB) suggests otherwise. While responding to the question, “from which sections of the Muslim community in the UK do you expect to get your customers,” it was stated by the IBB that, “Our proposition is one that should appeal to all branches of the Muslim community, but we do not believe our customers will be exclusively drawn from the Muslim community. Our policy of ethical investment means that we hope and expect to attract a wider range of customers, based on the values within our business and attractiveness of the proposition” (Islamic Bank of Britain, n.d.).
Evident from this is that no religious restriction is placed on who can patronize Islamic Banks or can access packages offered by the IB, subject to its operational philosophy.
The response also suggests that a Muslim as well as a non-Muslim might, based on any reason whatsoever, opts to bank with a conventional bank that charge interest, yet, no offense would be considered committed.
30 Journal of Islamic Economics, Banking and Finance, Vol. 9 No. 1, Jan - Mar 2013 Also, while also responding to the question, “can non-Muslims bank with OCBC alAmin?” This Islamic Bank responded, “most certainly! A common misconception is that Islamic banking is meant only for Muslims. This is far from the truth. While Islamic banking is based on Shariah principles it remains open to all, and has been widely accepted by people from various walks of life” (OCBC Al-Amin n.d). Syed Abdull Aziz Syed Kechik, the Chief Executive of OCBC al-Amin went further to state that, “Islamic banking is getting a firmer foothold in the market right now and it has attracted not just Muslims but also non-Muslims not just in Malaysia but in the other parts of the world as well.” He was reported to have also said, “non-Muslims now make up half of the bank’s Islamic banking customers” (Reuters 2008).
Therefore, in the Nigerian context, the operations of IB cannot be restricted to the benefits of Muslim alone, more so that JAIZ Bank, one of the two banks licensed by the CBN to operate IB has non-Muslim investors. On the strength of the argument and evidence advanced thus far, rather than being a logically grounded and well-intended criticism, Okogie’s objecting statement - we are against the operation of Islamic banking in Nigeria because we see it as another deliberate move to subjugate Christians in Nigeria- may be considered a sensationalist vituperation aimed at pitching Nigerian Christians against Nigerian Muslims. Since there is no such evidence or complains that IB has been subjugating or subjugated non-Muslims, and, further that, under the NIB/IB, it is forbidden to deal unjustly with Muslims and Non-Muslims and also that, there is no evidence which contends otherwise, Okogie’s melodramatic outburst should be dismissed as a mere propaganda of ignorance and ‘othernizingly’ inspired libelous sentiment.
Given that usury is in Islamic and Christian doctrinal decrees condemned as an act of grave immorality which is not only adversative to human dignity, but also as an ignoble act that earns man the wrath of God, then, Archbishop Avwomakpa’s remark which reads, “the church is aware of the dangers that this issue is going to cause and we are not going to compromise our faith as Christians. Nigeria belongs to all of us and we are saying 'No' to Islamization of Nigeria" (Arubi and Binniyat 2011) may be considered a doctrinal perfidy and an injustice to ine truism of what NIB/IB is to the creed of Muslims and Christians. Also, since IB which is in operation in secular states like the United State, United Kingdom, Singapore, Malaysia, and other places where IB is being Excogitative Deconstruction of the Discourse Dynamics of the Controverted Non-Interest.... 31 practiced, has never been an instrument of conversation, it amounts to saying the obvious that the Nigerian context cannot be an exception. Therefore, CAN’s assertion that the establishment of IB in Nigeria is an Islamizing religious plot by Muslims falls of any rational and scientific justification. While it may be easier to use education as a tool of conversion as it was the case with Christian missionary schools in Nigeria, same cannot be said of IB/NIB operated by Muslims or Non-Muslims. While commenting on this in one his books, A.D Ajilola (1975) rightly narrated that admission into missionary schools in the early part of pre and post-colonial Nigeria history was, “conditioned on accepting Christianity.” Part of the conditions for enrolment was then the change of one’s Muslim name to a Christian one and as submitted the late educationist, Babs Fafunwa, “their main objective was to use school as a tool of conversion” (Fafunwa 1974). It may be that CAN was afraid that how Christianity had used education as instrument of conversation in Nigeria, same might be done through the window of IB. In this instance, such apprehension, one might contend, is based, not on what the IB is, rather, on the unjust contextualization and rendition of IB in the light of how the colonialist collaborated with the missionaries in using education as a tool of conversation.
Since trading in usury, gambling, speculation, unjust enrichment, or exploitation/unfair trade practices are decried in Christianity, IB, whose inherent operational policy is premised on this, would assist non-Muslims and Muslims to live in consonance with the dictates of their religion. Therefore, as opposed to Most Rev. Nicholas Okoh’s (Primate of the Anglican Communion’s (Nigeria) contention that, “In 10 years from now,” IB “will have grown and matured to what it is intended to be - a religious oppressive instrument and tool for social coercion of the poor to convert to Islam” (Ahon 2011), the IB would have enabled Muslims and Christians discover alternative channels through which they can live to the true teachings of their faith without amazing wealth through the prevalent suppressive usurious conventional model.
This said, it seems that one of the unseen factors that might be responsible for the lurid explosion of CAN leaders could be as a result of the removal of some banks Managing Directors (MDs) on the grounds of alleged fraudulent abuse of public trust, one of which had been established in a competent court in the land. In what appears to validate this contention, Archbishop God-do-well Avwomakpa declared in the name of CAN that, “it 32 Journal of Islamic Economics, Banking and Finance, Vol. 9 No. 1, Jan - Mar 2013 is so disheartening that the removal of competitive and influential banks’ managing directors has culminated in the establishment of Islamic banking in Nigeria.” Avwomakpa furthers, "this is a huge surprise to Nigerians who thought that the CBN governor was overhauling the banking system for effective and efficient banking” (Akpokona 2011).