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| Idea not on banking but bankcruptcy | | | Nirbhay Jammual
There is no dearth of ideas among the Kashmiri separatists.Ideas breed in their mind as fast as lightning in a cloudy sky.Some ideas create commotion,others make people and the Government perturbed.Yet others are usually discarded as nonsence.In the last category comes the latest idea from Kashmir Mirwaiz and Chairman APHC,Molvi Umar Farooq,who has called for introduction of Islamic system of banking in the Jammu and Kashmir Bank.In support of his call he has described the traditional usury system as unIslamic.He has explained that giving and taking interest on deposits and loans was against the tenets of Islam.Thank God he has suggested the introduction of the Islamic system only in the state controlled Jammu and Kashmir Bank,which over the years has expanded faster than any other nationalised banks.Its profit level has shown an upward curver with the result its employees are drawing the monthly salary and perks which other top banks in the country offer.
Yes there are some banks in Pakistan and a few Islamic countries where the traditional usury system has been discarded under the shelter of a changed interest terminology.In such banks the term interest has been replaced by commission.If you seek bank loan the bank will demand commision for the loan it has sanctioned.The bank gives you commission on the deposits you make in the shape of FDRS etc.One would like to ask the Mirwaiz if commission is Islamic when he has stated that interest was unIslamic?
Assuming that the Jammu and Kashmir Bank introduces the Islamic system of banking by discarding the traditional usury system on the lines suggested by the APHC Chairman is it possible for the state controlled Bank to survive ?Since the State Government has been depending on the loans,it has been seeking from the JK Bank from time to time,the Government is not in a position to compensate the losses that the JK Bank will suffer from introducing the Islamic system of banking.The Kashmir Mirwaiz needs to be told that no bank,not to speak of the JK Bank,can survive in isolation.Like any other bank the JK Bank follows the guidelines laid down by the Reserve Bank of India as for as fixing the limit for interest on loans and advances is concerned.For introduction of the Islamic system of banking the JK Bank has to announce independence,freedom from the control of the Reserve Bank of India.Once it happened the JK Bank is bound to become bankrupt within a week's time.Why ?
Without giving interest on the deposits the JK Bank will find a line of loan seekers and no client for depositing the money.In such a case people will deposit their money in other banks and apply for advances from the JK Bank as on such advances the Bank cannot charge any interest when the traditional usury is discarded.If it happened how long the JK Bank can survive on mere advancing crores of rupees without charging any interest.It will have no freedom in investing money deposited by the customers on various projects which enables it to earn bigger profits.No deposits mean no advances which together mean end to the banking transactions leading to the death of a bank.The JK Bank will become as good as the proverbial grandfather's wooden box,carrying money for household requirements..If the Mirwaiz allows the word interest to be replaced by commission, provided it is allowed under the Islamic system,it would be another face of the same coin.If the JK Bank become bankrupt frownehere the state Government will seek hefty loans.Hitherto the annual loan sought by the state Government from the JK Bank runs into several hundred crores.Once it is stopped it will affect over all functioning of the Government.Banks canot survive if told to introduce Nizaam-e-Mustafa. |
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