The Hindu Business Line : Towards an ethical form of investing

Till about half a century ago, colonial rule prevailed in several parts of the world. It was only after the end of the colonial period, that many Muslim countries `began to rediscover their identities and manifested the desire to regain the lost values in all aspects of life, especially concerning the economic system,' write Zamir Iqbal and Abbas Mirakhor in `An Introduction to Islamic Finance: Theory and Practice,' from Wiley (www.wiley.com) .

But there were stirrings even earlier. For instance, "a formal critique and opposition to the element of `interest' started in Egypt in the late nineteenth century when Barclays Bank was established in Cairo to raise funds for the construction of the Suez Canal. The establishment of such an interest-based bank in a Muslim country evoked opposition from its inception."

Another example that the authors cite is that of Anjuman Imdad-e-Bahmi Qardh Bila Sud (Interest Free Credit Society), established in Hyderabad, India, in 1923. Mit Ghamr Local Savings Bank, established in Egypt in 1963 by Ahmad-al-Najjar, is `widely considered to be the first modern Islamic bank', one learns. It borrowed some ideas from the German savings banks with the principle of rural banking within the general framework of Islamic values, explains the book. "Around the same time, there were parallel efforts in Malaysia to develop a saving scheme for Muslims to perform the pilgrimage. This effort was motivated by the idea that money saved for pilgrimage should be free of any contamination of `interest'."

The authors chronicle the growth of other institutions too, such as: Islamic Development Bank, Centre for Research in Islamic Economics, Islamic Financial Services Board, and Accounting and Auditing Organisation for Islamic Financial Institutions. The 1990s saw the introduction of Islamic insurance (Takaful), Islamic equity funds, and the development of Dow Jones Islamic Index and FTSE Index of Shariah-compatible stocks. "The global demand for an ethical form of investing has led to a major boom in Islamic banking and finance. Banks such as HSBC and Citibank have announced their ambition to become major players in the market."

In the current era of globalisation, Islamic finance has challenges on many fronts — theoretical, operational, and implementational — say the authors. "On the theoretical side, further work needs to be done on developing core principles of Islamic economics, and understanding the functioning of a financial system operating on a profit-and-loss-sharing basis. On the operational side, issues relating to innovation, intermediation, and risk management are worthy of attention." And, implementation has to be system-wide, insist the authors.

Useful addition to the finance professionals' shelf.

Commit your goals to paper

Be accountable. Get focused and create purpose. And create a self-development plan. These are the first three of `10 Timeless Principles of Professional Success,' by Steven R. Webber, from Jaico (www.jaicobooks.com) . "Be personally responsible and accountable for your behaviour at all times. Pointing fingers and placing blame only hinder your progress," says the author, about the first principle.

On getting focussed, he urges you to "create your goals." Commit them to paper, rather than just remember in your head, he advises. "Because you have to think a little harder when transferring the thoughts from your head onto paper."

Your self-development plan should have five focal points, guides Webber. These are: reading, training seminars, inspirational speakers, quiet time, and fun time. "Two best times for reading are the first thing in the morning and the last thing before you go to bed." Turn your car into a virtual learning centre, counsels the author, especially to those who have little or no time to read, but spend hours driving. `Quiet time' is about `doing nothing and just being'.

We are all human beings, not human doers, reminds Webber. For instance, listen to the sounds of nature or watch the sunset, he invites.

Complement the plan with action, in which phase you need persistence and physical fitness. "Successful people have the ability to get up after they've been knocked down — again and again."

Apt lessons also for those who play the markets!

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