Active TopicsActive Topics  Display List of Forum MembersMemberlist  CalendarCalendar  Search The ForumSearch  HelpHelp
  RegisterRegister  LoginLogin  Old ForumOld Forum  Twitter  Facebook
Advertisement:
         

Islamic Finance
 IslamiCity Forum - Islamic Discussion Forum : Religion - Islam : Islamic Finance
Message Icon Topic: Islamic Banking In Australia Post Reply Post New Topic
Author Message
hshah
Male Islam
Starter.
Starter.


Joined: 17 March 2014
Online Status: Offline
Posts: 1
Quote hshah Replybullet Topic: Islamic Banking In Australia
    Posted: 17 March 2014 at 4:17am
Assalamualikum all,

There has been a recent buzz in Australia and around the world about the growth, potential, and prospects of the Islamic Banking and Finance Industry. Although this industry is growing rapidly Dubai, Malaysia and the UK, it is just beginning to catch-on in Australia. One of the oldest 'Islamic banking' institutions in Australia is MCCA.

There has been much debate on whether or not MCCA is actually a Halal, Sharia compliant, Financial Institution. most scholars have commented on whether or not their investment contracts are in accordance with Sharia principles. However, i would like to look at their operations from a different angle. Before i go any further, I'd like to clarify that i am not a scholar stating whether or not you should finance your house through MCCA. I have a background in accounting which i will use in the following analysis.

I believe that the key question that is often overlooked when assessing MCCA's Sharia compliance is: Where do they fund their loans and mortgages from? (Where do they get the money that they lend out to you). Some naive people believe that they raise these funds from the money that clients invest with them under their cash management scheme. This is only partially true. By referring to their financial statements provided in their official annual report, we find that their cash management scheme only has $20-30M in it. In the same financial reports, MCCA state that the amount that they have loaned out to clients is $750M. The obvious question is? where did they get the money to finance all these loans. The answer: From a conventional, Un-Islamic bank (Commonwealth Bank). An example of how this works: MCCA borrow the funds from the bank at 4% interest and then lend those same funds to their Muslim clients at a fixed interest rate of 6%. When the client pays back their loan to MCCA, MCCA pocket 2% and pay back the remaining 4% to the bank from which they borrowed the original funds.

From the way i see it, this is not "Islamic Finance". All MCCA is doing is acting as a large mortgage broker and marketing themselves to simple Muslims, selling them the 'Aussie Dream' of owning their own home in a so-called Islamic manner.

The reason for me writing this post is not to insight hate towards MCCA but to clarify for the average Muslim the truth about such fraudulent schemes. Schemes that stain Islam, its values, ethics and practices.    

Please comment and share with others.
IP IP Logged
Post Reply Post New Topic
Printable version Printable version

Forum Jump
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum

Disclaimer:
The opinions expressed herein contain positions and viewpoints that are not necessarily those of IslamiCity. This forum is offered to stimulate dialogue and discussion in our continuing mission of being an educational organization.
If there is any issue with any of the postings please email to icforum at islamicity.com or if you are a forum's member you can use the report button.

Note: The 99 names of Allah avatars are courtesy of www.arthafez.com

Advertisement:



Sponsored by:
Islamicity Membership Program:
IslamiCity Donation Program  http://www.islamicity.com/Donate
IslamiCity Arabic eLearning http://www.islamiCity.com/ArabAcademy
Complete Domain & Hosting Solutions www.icDomain.com
Home for Muslim Tunes www.icTunes.com
Islamic Video Collections www.islamiTV.com
IslamiCity Marriage Site www.icMarriage.com