Islamic Banking in Brunei

This morning on the way to our children’s school we listened to ‘Pedoman’ (Nur Islam Channel) and the topic discussed was Islamic Banking. The good Ustaz was explaining the virtue of the system and so on and so forth, which reminded me of my fourth year Islamic Economics course that I took ages ago.

Although I can’t recall 95 percent of what I had learnt during my early twenty’s, the one thing that I still remember is that the system is based on ‘profit and loss sharing’ and the prohibition of ‘riba’ (interest).

Now, a few days ago, I bought a car and took a car loan from one of Brunei’s Islamic finance institutions. I am no expert in Islamic banking so I asked the loan officer to explain to me the difference between the car loan offered by them and those offered by the conventional banks. Well, his answer was simply we’re Islamic! Well, that didn’t answer my question, I pointed out to him that the monthly payment for the loan was exactly the same as the monthly payment that I would need to pay if I were to use a conventional bank. It was only a matter of preference!

I did not want to press the poor guy partly for the fear of rejection of my loan application and partly I knew it was not his fault in the first place. I actually asked the same question to a number of that particular bank’s staff whenever I visited it and I always got the same answer. It makes me wonder whether the bank has ever given its staff a training course on Islamic banking. I feel sorry if it hasn’t and I think it should.

Anyway, somebody please explain to me how Islam are the Islamic banks in Brunei? Frankly, I don’t see the difference between them and any of the conventional banks, in terms of their operation. They may not be involved in the financing of any of the unislamic activities such as gambling, entertainment etc. but I think in terms of profit and loss sharing- which is the basis of the system, they only share the former but never the latter, which to me makes them no better than any conventional bank.

So, please prove me wrong.

Salaam.