General Question

FireMadeFlesh's avatar

Are we too accommodating of religious laws?

Asked by FireMadeFlesh (16558points) June 15th, 2009

I am referring mainly to this plan by the National Australia Bank to introduce “Muslim friendly loans.” These loans are designed to bypass Islam’s teachings on usury. It makes loan recipients immune from interest rate changes, and (I think) far more financially independent than the rest of the population. I am not very knowledgeable about economics, so I would appreciate an explanation as to how it would affect them financially. Would the same thing happen for Scientology, or other smaller religions? Do you think it is a good idea, or not?

Observing members: 0 Composing members: 0

37 Answers

The_Compassionate_Heretic's avatar

If it goes through, you’ll have a lot of converts to Islam.

Bad taste? You bet, but plenty of people would have no problem with heresy for profit.

eponymoushipster's avatar

Since Catholicism is one of the largest religions in the world, and we have national holidays, changes to school schedules and menus and other allowances for them, i’d say it’s not just smaller religions.

Also, the Catholic church is one of the largest landowners in the world, as well as a holder of antiquities and fine art. Yet they maintain a tax-exempt status.

I think a religion that truly acts in a non-profit way, or follows the rules laid out in the tax code, should be allowed to use the benefits of such laws. those that ignore them should suffer the consequences.

as for such loans, it’s pandering to gain business, as @The_Compassionate_Heretic‘s comment indicates.

FireMadeFlesh's avatar

@The_Compassionate_Heretic Heck yes, thinking of it myself!

FireMadeFlesh's avatar

@eponymoushipster Islam is not a small religion, it is the world’s second largest. I am asking if we treat religions equally, and if the same would happen to accommodate smaller religions. I can’t really comment on Catholicism, as I can’t be sure how much of their wealth is from their horrid collection techniques of the Dark Ages, and how much has been recently acquired.

eponymoushipster's avatar

@FireMadeFlesh no, it’s not. but you commented on smaller religions.

no, religions are not treated equally, which is a shame. but, this is in no small part due to the fact these religions employ their weight to influence politics and societal law. Those religions that do not involve themselves in these things are oftentimes the victim of abuse.

The_Compassionate_Heretic's avatar

I admit it seems peculiar that a religion would afford a monetary benefit as a result of membership.

Anyway, I think to this question: “No”. It would be a bit much to ask an entire nation’s Muslim population to commit blasphemy as a matter of living in that country.
That might make some people angry.

Harp's avatar

The Islamic “loans” don’t come at no cast to the recipient. They simply use a different mechanism to earn the bank a profit. There are a couple of variations, but here is one of the more common:

“The Ijara or “decreasing rent” Islamic home purchase scheme is common among Islamic banking institutions in the West. In this scheme, the bank once again purchases the home and re-sells it to the buyer. However, unlike the murabaha plan, in the case of Ijara the home remains in the bank’s name until the total price is paid off. The buyer takes up residence immediately and makes payments to the bank on the purchase price. However, in addition to those payments, the buyer also pays a fair market rent. So initially, the buyer is shelling out a lot of money every month.

As time passes and the buyer continues to pay off the purchase price, his share of the home increases and his rent consequently decreases. Eventually the customer buys out the bank and assumes full ownership of the home.” (source)

It’s not a scheme for making cheap money available to Muslims. It just uses a technicality to make the transaction pass Islamic muster.

DarkScribe's avatar

You apparently have not read the article in depth. The headline is misleading, they are still paying interest, juts in a roundabout way. It is not new, “Muslim friendly” loans have been around for quite some time. I suggest that you read the full (original) article. Basically the interest for the full term of the loan is added to the amount borrowed and the person pays it back at an agreed upon rate, but without apparent interest. It is nonsense and makes a mockery of their own laws, but they find it appropriate.

A rose by any other name…

DominicX's avatar

@eponymoushipster Changes to the school menu for the Catholic Church? What might that mean?

eponymoushipster's avatar

@DominicX no meat on certain Fridays, for example.

DominicX's avatar

@eponymoushipster That’s bizarre. I would expect that at a Catholic school, but not at a public school. Maybe I’m just used to going to schools where most people bring their own lunch.

eponymoushipster's avatar

@DominicX yeah, well, when i was in school it happened. it may depend on the area you live in. Some areas, kids get all the popular US holidays, and Jewish holidays as well. perhaps other areas get Muslim, etc. holidays off dependent on the population.

The_Compassionate_Heretic's avatar

@DominicX I spent a year at a jesuit school and there was no meat on friday.

DominicX's avatar

@The_Compassionate_Heretic Yeah, but that’s a Jesuit school—it would make sense.

But to answer the question, I think we are accommodating to an extent, but I don’t know if we are too accommodating. People always say stuff like “my religion says I need to kill people”, but there is a line that is drawn. I suppose it just depends on how much further the line is pushed.

The_Compassionate_Heretic's avatar

@DominicX Very little about Jesuit school made sense to me.

jackfright's avatar

question’s a little too general;
while i think islamic banking great for the muslim population, and doesn’t negatively affect non-muslims, we can sometimes be too accommodating-
http://www.timesonline.co.uk/tol/news/uk/crime/article4749183.ece

different laws for different people. good idea? i’m not entirely convinced.

dalepetrie's avatar

Sounds like smart business to me, i.e. a way to make money off a group of people who otherwise wouldn’t purchase your services.

FireMadeFlesh's avatar

@Harp and @DarkScribe I realise that there is still a cost, I never stated otherwise. I did read the full article, and I do realise how the profit is still made. I also realise that there is no real financial advantage to this mode of payment. It is rather obvious that no institution would do such a thing if there was no money to be made from it.
The issue I have with this system is that our economy uses adjustments in interest rates to control inflation. By borrowing an increased amount of money, the interest is estimated beforehand and no interest rate fluctuations affect the loan and the Reserve Bank’s power over inflation is diminished. This means loan recipients do not receive any positive or negative results from the health of the economy.
I am all for accommodating people with different needs, but I do not believe anyone should receive preferential treatment based on religion. Whether or not this is preferential is debatable, but either it gives them advantages or disadvantages based on the future of the economy, so it is either preferential treatment or discrimination.

DarkScribe's avatar

@FireMadeFlesh The issue I have with this system is that our economy uses adjustments in interest rates to control inflation.

That has little effect on a fixed rate loan – which this effectively is.

walterallenhaxton's avatar

An Islamic loan is identical to an APR loan. They are often used in the purchase of cars. They add the interest to the price and call it the price.

walterallenhaxton's avatar

@DarkScribe The best way to control inflation is to trash the central bank and all legal tender laws.

FireMadeFlesh's avatar

@DarkScribe A fixed rate loan lasts for a maximum of 7 years, doesn’t it? In comparison to the length of a mortgage, that isn’t long.

Ruthi's avatar

It seems fair to allow each religion to practice its own laws, but what becomes the problem is that sometimes allowing a religion this much freedom may not go down well with the rest of the community. If, as the article says, the loan is available to non-muslims and is not discriminatory,then I don’t see a huge problem arising…

FireMadeFlesh's avatar

@Ruthi Thanks. How might we control inflation if this were to become the dominant type of loan?

DarkScribe's avatar

@Ruthi the loan is available to non-muslims and is not discriminatory,

Under existing legislation (Australian) it cannot be Muslim only, that would be discriminating on the basis of religion.

DarkScribe's avatar

@FireMadeFlesh A fixed rate loan lasts for a maximum of 7 years, doesn’t it?

That depends entirely on the lender. Some are less, some whole of loan. My first home loan was a fixed rate loan for twenty years, but that was a long time ago and an initial penalty of a slightly higher rate applied. One of my daughters currently has several investment properties on whole of loan fixed rates.

Harp's avatar

@FireMadeFlesh The Fed doesn’t set rates paid by consumers; it sets rates that banks charge each other for short-term loans. This is one of the factors that determines the cost of credit, so all banks, even if they only make Islamic loans, would still have to pass those costs on through whatever mechanism they use, and the money supply would still be effectively controlled.

My mortgage is currently a thirty-year fixed rate loan, by the way.

FireMadeFlesh's avatar

@DarkScribe In that case the economists must think it is feasible, and I will withdraw my comments. Sorry for the dud question everyone, but I am glad to have learned. How would we ever learn if we were never wrong?

Edit: @Harp Fair enough, thanks.

sap82's avatar

I think this whole idea is a bit over-the-top. Nobody should receive special treatment. If one group of people gets special it is descrimination for the other to not, with exceptions to the handicapped of course.

oratio's avatar

Well, it’s a part of competition and the free market. They want to attract customers. It’s the same with other segments of the population. There are many different deals for different groups of people.

The only reason why this is seen as controversial compared to pensioners and different types of businesses is that it’s based on Islam. Look at some western countries where Christian churches are tax excempted. Why would that be more ok? Thats not even due to competition.

If this costs the bank customers and business they would probably reconsider.

walterallenhaxton's avatar

@sap82 It is offering a product to a market. An example would be that you don’t eat turnips. Are you saying that because of that turnips should not be offered to those people who love them and buy them? I doubt that. I think you are smarter that that and have just not thought about this subject enough.

Ruthi's avatar

@FireMadeFlesh I doubt the market will pay this more attention than it does other fixed-rate loans. It’s just another innovative business attempt to me…

mattbrowne's avatar

It’s interesting to note that islamic banking handled the financial crisis quite well.

walterallenhaxton's avatar

@mattbrowne I don’t think it is fractional reserve. I think that the banker needs to have money to make it work and can’t lend money that he does not have.
I am not at all certain of that. What makes you think that the crises is over? It is only beginning.

JLeslie's avatar

Ridiculous. Different loans for Muslems? It’s ok if the loans are available to everyone and they are just being marketed as loans that Muslems can take without feeling bad, but if it is not available to everyone no way.

mattbrowne's avatar

Well, I get a strange feeling too when someone talks about sharia-compliant financial products. It reminds me of women getting stoned (literally!) and hands being chopped off.

walterallenhaxton's avatar

@mattbrowne Maybe so but to run a society a set of laws must be more complex than two laws.

Answer this question

Login

or

Join

to answer.

This question is in the General Section. Responses must be helpful and on-topic.

Your answer will be saved while you login or join.

Have a question? Ask Fluther!

What do you know more about?
or
Knowledge Networking @ Fluther