Monday, February 19, 2007

(19) Statement on Shariah Compliancy of Albaraka Bank

Note: Daarul Iftaa Camperdown, the organisation that issued the recent fatwa against Albaraka and Oasis, is said to certify Islamic Finance, a division of Wesbank, which in turn is a division of First National Bank- one of the four major conventional banks operating in Southern Africa.


Statement on Shariah Compliancy of Albaraka Bank Limited

Respected Client,

The Muslim Community in South Africa is constantly faced with the challenge of ensuring that their dealings comply with Shariah. With the Interest Based Banking system having gripped nations all over the world, providing an acceptable alternative to the Riba based banking system has become a burning issue of the time.

Albaraka Bank Limited’s mission is to reflect Islamic Economics Principles in all its operations and products and is therefore dedicated to providing this alternative and fulfilling the need of providing a Banking solution consistent with the principles of Shariah.

The Bank strives to achieve this by providing financial products that conform to the principles of Shariah. Furthermore, any queries received from clients or staff members and the public, on products, procedures or even general issues pertaining to Shariah Compliance are tabled at monthly Internal Shariah Committee meetings. The Bank has an Independent Shariah Supervisory Board which meets on a regular basis to resolve issues tabled at the Internal Shariah Committee.

Together with the guidance of the Shariah Board, the Bank uses the Islamic Banking Standards set by AAOIFI - The Accounting and Auditing Organisation for Islamic Financial Institutions, as a basis in its operations. The Bank has chosen to adopt these standards in order to ensure consistency and compatibility of its applications with the International Islamic financing arena.

AAOIFI (The Accounting and Auditing Organization for Islamic Financial Institutions) was established in Algiers on 1 Safar 1410AH corresponding to 27 March 1991 and is based Bahrain.

One of the primary objectives of AAOIFI is to prepare, promulgate and interpret Shariah standards for Islamic Financial Institutions in order to achieve harmonization in the application of Islamic Financial concepts among the Shariah supervisory Boards of Islamic Financial Institutions and to avoid contradiction or inconsistency between the Fatwas issues by different Islamic Scholars around the world. The Shariah Standards are prepared by a group of highly qualified Ulama selected from all over the world. The Shariah Board of AAOIFI is currently chaired by Mufti Taqi Usmani.

Over the years, AAOIFI has taken significant steps to encourage the application and enforcement of its standards throughout the world. The standards issued by AAOIFI are used as guidelines by many government regulators in jurisdictions such as Bahrain, Sudan, Jordan, Malaysia, Qatar, Saudi Arabia, Dubai and Lebanon. Most recently, Syria has signed an agreement to mandate and adopt AAOIFI's standards.

AAOIFI has received acceptance from Islamic Financial Institutions internationally. Membership of AAOIFI continues to expand and now stands at 115 members from 27 countries. This steady progress is a reflection of the confidence placed on AAOIFI internationally as the leading representative of the industry.

Whilst the Bank primarily adopts the rulings of the AAOIFI Standards and Albaraka’s Independent Shariah Supervisory Board in its procedures and products, we recognize the leadership role that the Ulama play in the community. In this context, any inputs and suggestions received are treated with utmost priority and importance.

We pray that Allah give us the ability to work in unity to strengthen the Ummah in general and specifically the Islamic Economic System.

We welcome any suggestions or advice that may be helpful to us in ensuring adherence to Shariah and thereby attainment of our ultimate objective, to please our Creator. We will always continue to play a leading role in a transparent and proactive manner in our effort to strengthen the Islamic Economic System.


Anonymous kv said...

Subhaanallah! They certify a division of Wesbank but not an organisation that is certified by an international body, who are chaired by Mufti Usmani, who is one of the top people in the field today...and he's Hanafi!

February 20, 2007 1:18 AM  
Blogger defender said...

Assalaamualaikum Wa Rahmatullahi Wa Barakaatuh,

Over the last few days I have had the bad fortune of reading a lot of correspondence between Camperdown Darul Ifta and various people asking many questions regarding Al Baraka Bank.

It was indeed very sad reading through many of the e mails sent by Camperdown. Sometimes I wonder why there is so much enmity amongst the Muslims and when I see the way some of our Ulama write I just cannot understand whether these are the values that Ulama should portray.
This manner of writing would not acceptable from even a lay man, let alone an Aalim.
The correspondence posted on the internet indicates to us all to what levels we have stooped. Consider the following quotations from the letters penned by the Darul Ifta:

1. One really wonders why it would have taken you six months to prepare the six lines, and why you even bothered to do so.

2. If you are unaware of this simple but vital reality, then I suggest you resign as CEO of a so called Islamic bank.

3. After six months of pondering and deliberation, the only miserable response you could afford us was…

4. Your reply is obnoxious to say the least

5. Your nauseating repetition of the same old reply that you have passed on the letter is of no avail.

6. We are doubly sure that your office does not deal with the Registrar of Banks or SARS, for example, in the like manner.

7. Truly, one wonders whether you are running a professional financial institute or a barber-shop.
8. The SSB of the fund may consist of highly paid individuals who are expected to defend their decisions.
9. What would happen if month after month you regurgitate the same reply to them?
10. The Ulama are the custodians of Shari'ah, and not suit-and-tie fly-by-nights.( referring to Shariah Board members)

Nevertheless, as an objective person, after seeing these e-mails I decided to do some research regarding this online attack and Cyber warfare, as it were, that Camperdown appears to have launched against Al Baraka Bank.

My findings were intriguing to say the least! Okay here goes !

Finding: Number 1

You would be surprised to learn that it was the very same Camperdown Madrassah and the same Aalim who gave a ruling stating that all transactions of Al Baraka Bank are permissible and legitimate. This Fatwa was issued a couple years ago (Dec 2002). I could upload it if anyone would like to have a look.

I also heard a lecture given by Mufti Desai in the USA in a Shariah Compliant Business lecture that was posted on the internet( in which he clearly states that he has checked all Al Baraka banks products ( listen around 18minutes into the lecture) and has approved of them being totally Sharia Compliant.

Thereafter I noticed that Mufti Desai seems to be repeatedly referring to the Mushaaraka contract and recently the other contracts of the Bank like Muraabaha.

I have enquired from the Bank whether the contracts that have existed have changed since2002 when the Fatwa was issues and whether it was the exact same contract that existed to this date. The response was in the positive! When the contracts have not changed since these approvals why then, the sudden uproar? Can we have some answers ????
In fact, when we speak to people at the Bank, if anything, it appears that the Bank has increased their controls and checks in as far as Sharia compliance is concerned. ...ok let me go for be continued !!!!

February 21, 2007 2:03 AM  
Blogger Bilal said...

could the confusion and inconsistencies have anything to do with Camperdown now certifying Wesbank?

February 21, 2007 11:33 PM  

Post a Comment

<< Home