Islam in Africa 
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| Title: | Islamic banking in South Africa: between the accumulation of wealth and the promotion of social prosperity |
| Author: | Qasaymeh, Khaled |
| Year: | 2011 |
| Periodical: | The Comparative and International Law Journal of Southern Africa (ISSN 0010-4051) |
| Volume: | 44 |
| Issue: | 2 |
| Pages: | 275-292 |
| Language: | English |
| Geographic term: | South Africa |
| Subjects: | banking Islam bill drafting |
| Abstract: | The banking sector is the cornerstone of a modern economy. Muslims in South Africa have been utilizing Islamic banking through Albarakah Bank since 1989. In 2004 First National Bank and in 2006 Absa Bank started offering Islamic banking services through their Islamic windows. In 2010 the South African legislature introduced the Draft Taxation Laws Amendment Bill incorporating legal definitions of Islamic financial instruments which are predominantly based upon contract, including 'musharaka' (partnership financing), 'mudaraba' (trust financing) and 'murabaha' (cost-plus financing). The Bill does not, however, create a comprehensive legal landscape for Islamic banking. The question arises as to whether the elimination of 'riba' (interest from financial operations) and the utilization of Islamic contracts are sufficient for financial institutions to be regarded as compliant with shari'ah law. Investigation of the application of shari'ah-compliant banking in South Africa reveals that the mechanical application of Islamic rules does not necessarily achieve the goals of shari'ah. This is due to the major role of Islamic banking in promoting social prosperity. The matter requires Islamic banks to revisit their current practices in order to restore the origin of norms intended to justify profit by promoting social development. Notes, ref., sum. [Journal abstract, edited] |
