By Maqbool Ahmed Siraj
Islamic banking is only nominally different from conventional banking and the element of interest gets camouflaged. For suave, soft- spoken and everpensive
Abdul Hamid Taylor, life has been a multi-tiered escalator, offering one station after another, each elevating him to a newer height. A banker by choice, qualification and training, Hamid having dealt with money in ample measure, is now looking to a future in disbursing much of what he earned for himself. General Manager at Abu Dhabi’s Finance House at a time when his plea for giving him a final respite from a 43-career is being stonewalled, Hamid is contemplating a life devoted to philanthropy and social service in Bangalore. Though he acquired a house in Bangalore some decades ago, it is only now that it is being dusted off and receiving a fresh coat of paint for his several short sojourns to dispense off what he gathered over the long years. Rooted in Kerala ancestry, Hamid’s parents had moved to Mumbai from Kannur to ensure their kids a future no other city in India could promise then. Born, bred and educated in that urbs prima, he did his family proud by topping the promotional exam of the Bank of India in 1972 after having earned his M. Com, LLB and CAIIB. Oil boom had brightened the prospects in the Gulf by the mid 1970s and Hamid took wings shortly thereafter to anchor himself in Dubai, the hub of the new economic dynamism in the region. He served short stints in Mashreqbank (Bank of Oman then) and still later Union Bank of the Middle East rechristenedEMIRATESNBD chaired by Late Abdul Wahab Galadhari. Still later, having been picked upby tycoon Mohammed Abdullah Al-Qubaisi of the National bank of Abu Dhabi he was carried to the Abu Dhabi Islamic Bank and then to Finance House. “It was a company of trust that has endured for over two decades”, he observes.
A pragmatist at heart, Hamid is fastidious to the core when it comes to money and its deployment and is not amenable to emotions. Though he served as a senior vice president of the Abu Dhabi Islamic Bank between 1999 and 2004, he came out unconvinced of the way it is envisioned in a world in the throes of transformation due to fast-paced t e c h n o l o g i c a l changes. The stint served him well for it was during the same period that this Bank joined a syndicate of seven banks to finance the communication satellite ‘Thuraya’ by the UAE telecom company Etisalat. The financial structure was an innovation. The Islamic Bank’s relevance grew after 9/11 when several Western banks backed out from projects in the Middle East. Some good homework by Hamid and his group won the Islamic Bank some mega projects such as generation of water and power for Abu Dhabi. In fact one of these projects was adjudged the ‘Best Structured Deal’ by the magazine Euromoney in 2001. This enabled them to clinch another $2.9 billion independent water and power project in Abu Dhabi, which was their biggest deal. But, says Hamid, successes mainly came their way by structuring the deals rather than any inherent features of Islamic banking. Hamid says he started as an ignorant individual in Islamic banking and found to his dismay that not even the best sharia scholars had much to offer by way of explaining the mechanism of the financial mechanism under Islamic banking. “At best, they were merely playing with words and emotions and offered little by way of any real alternative to the conventional banking”, he adds. Hamid says, Islamic banking as practiced now, is only nominally different from the conventional banking and element of interest get camouflaged. He offers an instance. An individual borrowed $50 million from the Islamic Bank. The Bank asked him to sell his building to them without the sale being formally registered and also allowing the ‘sellers’ to use it under a lease agreement on rent. “Now the rent that the bank earned during the period was a substitute for interest and it was fixed according to LIBOR (London Interbank Offered Rate). Tell me how does it materially differ from a straight loan”, he questions. He says, “According to Justice Taqi Usmani, time value of money is not permissible under sharia banking and most Islamic banks flagrantly violate this principle as time is a vital element of any financial deal. Since, a vital element is being ignored, a lot of things which were prohibited under Islamic banking, have become permissible over the years.” Yet Hamid is not willing to give up all hope on Islamic banking. He feels that two important concepts i.e., Musharaka (partnership) and Mudaraba (joint venture) have some useful features which can be developed into useful financial products provided the Islamic sharia is codified. “Every single institution interprets the sharia according to his own lights and in an interconnected world it serves no purpose as two interpretations are never compatible. he Gulf people cannot touch the Malaysian Islamic banks even with a barge pole simply because it hardly bears any semblance of sharia with them,” he remarks. Elaborating further, he says, “Success of Musharaka and Mudaraba is heavily reliant on Islamic bankers coming out of traditional mindset and are prepared to take additional risk. Tawarruq or ‘Commodity Murabaha’ which is very widely used by Islamic Banks is heavily criticized by Shariah scholars.” However, Hamid points out that Bahrain has initiated establishment of an institute for formulating procedure of accounting and bringing in standardization of documentation. In a banker’s career spanning over 43 years, Hamid has earned impeccable credentials both with is bosses and clients. His current employer Al-Qubaisi, Chairman of the Finance House, finds him irreplaceable, given his integrity and would not let him retire and go. Meanwhile, Hamid has begun his forays into his motherland to do something to lift the social underbelly from the morass of poverty, illiteracy and diseases. His Taylors and Meerans Charitable Trust funds education for nearly 300 children in Bangalore in various disciplines. “I feel, I can return my due to the society in some insignificant measure this way”, he told this scribe when he was here last month. Mr. Abdul Hamid Taylor can be reached at [email protected]