Ahmed >> Venkatesh, Money in Islamic Banking doesn't lose value
This should be considered the MOST ABSURD STATEMENT MADE BY ANYONE IN 2011.
Money is Money. Money has no religion. If you are in India, you use Rupee. I use Rupee. Religion does not matter. Just because your money is invested in a Islamic Bank, it wont lose value. Money loses value because, money supply is continuously expanded by governments which always spend more than what they earn.
So the concept of interest in bank FDs is nothing but compensation for inflation. Also there is something called time value of money. You have Rs 100, you can spend it now. YOu instead put in a PPF for 15 years and after 15 years you take it back. You have thus deferred your spending by 15 years and interest is part compensation for your sacrifice in delaying your urge to spend.
In a secular country like ours, there is absolutely no way RBI can permit religion based banking. However, as a secular country, Muslims can definitely consider investment avenues that do not involve payment of interest . How? The good thing is India has other ways to invest money. Muslims can invest in equity markets , in mutual funds, in gold, real estate, all of which are not involving payment of interest . So why is this useless debate on islamic banking?
Anwaar >> Islam only requires that usurious or exorbitant interest should not be charged,
Nothing stops muslims from investing in stock market or real estate or gold, atleast in India. So whole debate is plain waste of time and only aimed at vote bank politics.
>> "Islamic banking prohibits charging interest from idle deposits, but allows investment in productive projects/ business and the resultant profit-sharing."
There is no such thing as an idle deposit. The bank is going to use the money one way or another. The choice is upto the investor. He may choose low risk/low interest investment, or higher risk/profit-sharing investment. Using labels such as "Islamic Banking" will only further segregate Muslims. A bank can offer additional products if it sees a demand for such new products. A greater range of products would increase the business of the bank.
Islam only requires that usurious or exorbitant interest should not be charged, but if some Muslims believe that any interst is illegal they can deposit their money in one of the newer products.
Venkatesh, Money in Islamic Banking doesn't lose value. It grows with the investments, the only downside is if you are a bank, you share a percentage of profit or loss with the investor instead of a fixed amount.
IT IS SILLY. Money loses value with time and if no interest is given then it has less value than what it was previously. a simple example is - if Rs 100 bought 1 kilo of oranges last year and it cost Rs 110 this year than if no interest was given you buy less for the same amount/.
it works if people have hoardes of money and dont mind the devaluation of currency. to apply it to all circumstances is just foolish.
If a creative solution can be found to overcome the religious injunction against usury, we should be equally flexible in finding ways to accept it.