Sultan Choudhury | Building the 1st UK Islamic Bank, Islamic Mortgages DISSECTED, Al-Rayan Analysed
Oct 2, 2023
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Sultan Choudhury, a leader in Islamic Finance, spills the tea on Islamic banking, halal mortgages and more. They discuss building the first UK Islamic bank, implementing diminishing Musharaka, challenges in UK Islamic banking, building a home finance company, exploring the HPP product, the importance of product innovation in Islamic finance, and the nature and creation of money.
Islamic banking needs to prioritize values and connection with consumers over profit to create a genuine connection with the Muslim community.
Obstacles to wider acceptance of Islamic banking include consumer inertia, lack of education, and misperceptions about Islamic mortgages, but a focus on values and continuous improvement can help overcome these challenges.
Islamic banking should constantly strive for the ideal and align Islamic values first, with the finance aspect secondary, in order to work towards a more ethical and inclusive financial system.
Deep dives
The Need for a Shift in Approach
There is a need for a shift in approach in Islamic banking to prioritize values and connection with consumers over pure profit. Current models focus on being a bank first and Islamic second, leading to a disconnect with the target audience. A long-term vision and a focus on the needs of the Muslim community are necessary to create a genuine connection. Shareholders should prioritize values and protect the principles that Islamic banking stands for, rather than compromising for short-term profit. A more authentic and empathetic approach is needed to truly engage the Muslim population and provide them with products that align with their values.
Overcoming Obstacles
There are obstacles to achieving wider acceptance and penetration of Islamic banking in the Muslim community. These include consumer inertia, lack of education, and misperceptions about Islamic mortgages. However, a focus on values and continuous improvement can help address these issues. The choice between an absolutist approach and a progressive approach is crucial. It is important to understand that Islamic banking operates within a larger system that may hinder the idealistic goals. By working progressively within the system and continuously aiming for improvement, Islamic banking can make a meaningful impact and gain wider acceptance.
Striving for the Ideal
Islamic banking should be based on a philosophy of constantly striving for the ideal and improving the existing products and services. Rather than settling for compromises, the industry should have a focus on moving closer to the ideal Islamic concept of finance. This requires a mindset where Islamic values come first, with the banking or finance aspect secondary. By aligning the goals of genuine progress and customer values, Islamic banking can overcome criticisms and work towards a more ethical and inclusive financial system.
Etiquette of pushing one's philosophy or criticizing others
The speaker discusses the importance of avoiding criticism and instead focusing on promoting one's own product or philosophy. They emphasize that throwing stones and criticizing others in a small market can erode confidence and cause division. The speaker calls for maturity in the community, learning how to respectfully disagree and respect differences.
Understanding the nature of money and risk sharing
The discussion touches on the nature of money and the creation of credit through private banks. The speaker acknowledges that money is constantly evolving and acknowledges the dominance of electronic money. They explore the concept of credit, its role in economic growth, and the need for responsible financial education. The speaker also addresses the issue of risk sharing in Islamic banking, highlighting the differing perspectives on equitable risk sharing. They stress the importance of understanding the nuances of risk and reward in financial systems.
Join us in this exciting episode as we literally hear it from the horse's mouth, Sultan Choudhury - a leader in Islamic Finance in the UK and an exec level insider who spills the tea on Islamic banking, halal mortgages and more...
Don't miss this one.
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