Bismillahirohmaneerohim (In the name of Allah, the Most Merciful and the Most Compassionate)
"Whosoever acquires unlawful wealth and then gives it away as sadaqah will have no reward, and he will bear the burden (of his wrongdoing)." From Abu Hurayrah (As cited in Kanz al-ummal)"- from a book I read.
Who would have thought that a good intention (sadaqah) could easily be nullified when one receives their wealth in an illegal way. Even though the intention is good, one should make sure that it is good as a whole and not only bits and pieces of it. Therefore it is vital to know where our wealth is coming from and to make sure that the sources are legal so that not only what we give is Halal but in fact what we eat, drink, wear and etc is Halal too.
When we try to understand the Divine injunctions and the further explanations given by the Prophet salallahualaihiwasalam, it becomes clear that the Divine law strikes at its very root. This ayat further shows that any law/changes should happen at its root rather than patching its root: "Verily Allah does not change a people's condition unless they change their inner selves." (surah ar-ra'd verse 11)
The ayat above could be looked at the 'Islamic banking' industry point of view. which then comes to a question on whether they (islamic banks) are helping to change the roots of human development or just making an alternative banking for Halal transactions?
Today we could see some 'Islamic banks' taking steps to safe guard themselves from unwanted risks. Example, if a person gets into a transaction with a bank requiring him to pay monthly instalments, they would be expected to pay the monthly instalments as per their contract. However, if they don't pay, these banks are giving them another chance to pay but including late payment fees on top of the instalments. No doubt it (the late payment fees) is permissible, but is it really helping to change the root itself? Is the 'Islamic bank' playing any role to help these individual to become better Muslims who will always fulfil their contract truthfully and honestly?
The reason of the late payment fees is to safeguard the banks so that they are not being taken advantage by the people who might end up not paying for their instalments. Late payment fees does make sense but is the bank helping to develop a better Muslim community as this in my opinion is more important. Do they put any effort to invest in human development? Therefore, should these banks be named 'Islamic banks'? Naming and branding some banks as 'Islamic banks' is an issue on its own which I will Insha'Allah write more in the near future.
Getting back to the topic, with this kind of mentality, 'Islamic banks' are actually design to suit the current Muslim way of life which may bring advantages and disadvantages. In my opinion, it is hindering from achieving the bigger goal, which is to improve and get the ideal muslim community/ummah. In a way, this is not changing the root/inner selves. Instead, the 'Islamic banks' are just patching up any likely holes. This has been the trend for some 'Islamic banks'. They are trying to find ways to patch new holes such as trying to make 'derivatives' permissible and etc. Again, no doubt they are able to justify the permissibility of their transaction, but their effort has never been aimed to change the roots. We should find ways to get/become the ideal Muslim community/ummah who do not lie, cheat, and fulfil their contracts and so on, rather than patching up all these holes to justify its permissibility.
Going slightly off track, I am mentioning this because I've heard this idea from a friend which does not make any sense to myself. Anyway, the idea is that a group of 'gangsters' were created to protect the Muslim community. 'Gangsters' in itself is wrong but they try to make it sound OK by saying they are protecting the Muslims community. Referring back to the Hadith above, this is just like acquiring unlawful wealth and giving it away for charity. This is not striking or changing the root/inner selves. With this mentality, again there can only be less hope in achieving the ideal Muslim community. The muslims do not need such protection from a group of gangsters because "Allah is the Best Protector and is the Most Merciful." (Surah Yusuf verse 64) No doubt we should work hard to get some protection and not just 'tawakkal' but this should be done in a more harmonious way rather than using brutality.
So with the current mentality, are we actually pushing further or getting closer in achieving the ideal ummah? May Allah guide us to change and achieving the ideal Ummah!