Islamic finance in society
When His Highness Sheikh Mohammed Bin Rashid Al Maktoum launched a new Ramadan initiative called Noor Dubai on August 31st, he demonstrated once again that the spiritual month in Islam is not only about fasting.
It is also about generosity, charity and compassion and taking action in favour of those who are most in need.
Noor (the Arabic term means ‘light’) aims to raise money for five million people with impaired eyesight.
Charity as an integral part of Islam
Islam and charity go hand in hand. Giving donations, or Zakat, is the fourth of the five pillars in Islam.
The other four most important duties are to testify one’s faith (Shahada), to pray in a ritual way five times a day (Salat), following the holy month of Ramadan and the pilgrimage to Mecca (Haj).
The Holy Quran emphasizes not only the duty of charity, but also the benefits in several chapters. Surat Al Baqara, says: ‘Those who (in charity) spend of their goods by night and by day, in secret and in public, have their reward with their Lord: On them shall be no fear, nor shall they grieve.’ Charity has also become an integral part of Islamic financial institutions.
In 2007 the Ramadan initiative ‘Dubai Cares’ collected Dhs1.7bn in order to finance schools for children in poor countries. Sheikh Mohammed eventually doubled this amount by adding the same sum out of his own pocket.
Few people know that the ruler of Sharjah, Dr. Sheikh Sultan Al-Quasimi is also a poet and donates the entire income he receives for his children books to a school for disabilities in Sharjah.
Purification of profits
This process is called purification. In order to purify a profit, people must donate 2.5% towards good works.
This applies to anybody in the Islamic society, whether they are a business executive, a banker who received a bonus or an Islamic fund manager who achieves returns that are superior to market results.
Every balance sheet of an Islamic Bank discloses which amount was donated and for which purposes by the bank.
Islamic banks also encourage people to donate and to promote social projects such establishing facilities in order to integrate people with disabilities.
Because Islam already means to act in an ethical manner, whether in private, in public or in business life, it must be in the nature of any Islamic bank to give something back to society.