This is the view of Shaheen Suliman, the chief operating officer of FNB Islamic Banking, who spoke at a media presentation in Cape Town this week ahead of the Global Islamic Finance Awards (Gifa), held on Monday at the Cape Town International Convention Centre.
Suliman said critics of Islamic banking often argue that it is nothing more than a “cut-and-paste” form of conventional banking, with the word “interest” being replaced by “profit sharing”.
Superficially, Islamic banking products resemble conventional products: on the retail side there are savings accounts, investment accounts and home and vehicle finance. But these products are underpinned by a strict ethical code (Shariah) that forbids the charging of interest, instead relying on a more equitable distribution of risk between lender and borrower in the form of profit sharing. Products must be approved by a Shariah board, consisting of independent Muslim scholars, and customer funds in those products may be used only in Shariah-compliant investments, which exclude industries such as alcohol, gaming, arms and interest-based finance.
Suliman says FNB offers the infrastructure for Islamic banking to exist alongside its conventional banking offering, so that people walking into any branch have the choice between banking the conventional way and banking the Islamic way. There is also pricing parity across the two options. However, the funds going into Islamic accounts are attributed a specific code, which assigns them to a ring-fenced treasury subject to Shariah compliance.