Middle-east Arab News Opinion | Asharq Al-awsat

The Pioneers of Islamic Banking | ASHARQ AL-AWSAT English Archive 2005 -2017
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Riyadh, Asharq Al-Awsat – The people who brought Islamic banking back to life at a time when it was on the verge of collapse when conventional economies dominated finance in the Islamic world will go down in the history books forever. They shouldered the risks of a new venture in a hostile and alien environment. Everybody waited for it to fail to be part of forgotten history.

These individuals strongly believed in the potential success of the Islamic finance experiment and spared no effort to achieve their goal in faith of their religion and its validity for every time and place.

At the forefront of this project was a pearl trader from Dubai. At that time, boats used to sail to the Gulf waters and divers would swim in search of pearls. However, the boat that sailed from the shores of Dubai in 1975 under the leadership of that pearl trader was different from other boats lining the shores of that charming state.

It was the Islamic Banking boat that sailed in that year to establish the first private Islamic bank in history. It was named Dubai Islamic Bank, established by Sheikh Saeed Al Loutah. Like other Muslims, Sheikh Saeed believed in Islamic Shariaa, in its validity for every time and place. But it was his spirit and ability to turn faith into reality, regardless of any expenses that distinguished him from others.

Sheikh Saeed’s dream came true with Dubai Islamic Bank and the numerous successes he achieved because of it. By establishing the bank, Sheikh Saeed helped the dreams of another man come true. In 1971, that man, Sheikh Ahmed Bazeea al Yaseen, “In the 1970s, I tried to establish an Islamic-compliant company or bank, and my motive was to respond to God’s command to avid Riba (usury) in commercial deals. In 1956, I urged one of the national banks to offer special services to those who wanted to carry out legitimate transactions, but this fell on deaf ears. When I was on the board of directors of the Central Bank of Kuwait, I suggested establishing Islamic banks and this was approved following intense discussions. However, the issue was postponed till the next session and was not mentioned in the minutes of the meeting. However, the participation of some Kuwaitis, the Kuwaiti Ministry of Finance in establishing the Dubai Islamic Bank in cooperation with Sheikh Saeed al Loota, encouraged the Kuwaiti Ministry of Finance to accept the proposal to establish an Islamic Bank when it was suggested once again.”

The Kuwait Finance House was founded by the Kuwaiti Ministry of Finance in 1977, and Sheikh Ahmed Bazeea al-Yaseen was appointed Chairman of the Board in 1977 by the Kuwaiti Ministry of Finance. He occupied this post until 1993.

Today, the Kuwait Finance House is considered one of the few Islamic-compliant corporations in that it meets the criteria of Islamic Shariaa in its transactions. Through its success, the bank is also considered the second biggest in the Gulf region in terms of assets and has the largest deposit share in the Kuwaiti financial market.

Also in 1977, thanks to efforts exerted by [Saudi] Prince Mohamed al Faisal, the Egyptian government agreed to his proposal to establish Faisal Islamic Bank of Egypt. The Egyptian parliament endorsed a decree to this effect before it was officially inaugurated in 1979.

Prince Mohamed sought to expand by establishing Faisal Islamic Bank of Sudan and Faisal Islamic Bank of Bahrain, and turned it into a comprehensive bank in Pakistan and Switzerland under the name of Faisal, the name of his father (May his soul rest in peace). He will go down in the history of Islamic banking as the founder of the first international Islamic-compliant bank called the Islamic Development Bank.

One cannot discuss the pioneers of Islamic banking without mentioning the master of the ship, who spared no effort or money to ensure that the operation advanced as it adhered to the principle of progressing societies; he is Sheikh Saleh Abdullah Kamel, Chief of the Dallah al Baraka Group established in 1982.

With 184 branches today, Dallah is operating in at least ten countries. There is no doubt that Sheikh Saleh’s efforts to maintain Islamic banking have remained pure and continue to meet the requirements of Islamic Shariaa. May God support his efforts.