Bangladesh is the only country with an Islamic
majority whose president is a woman.
Her name is Sheikh Hasina.
And this is not a little example.
We are talking about the 3rd biggest muslim
country, with more than 160 million inhabitants.
Nonetheless, there is one Bangladeshi even
more famous than Sheikh Hasina.
This is, MOHAMMAD YUNUS, the Nobel peace prize
winner and the inventor of microcredits is
also from Bangladesh.
This is surprising given that in this country,
only 1 out of 3 citizens has a bank account...
Bangladesh is one of the fastest growing economies
of the last few years.
They have reduced poverty faster than anyone
else.
And they are the world’s second largest
textile manufacturer, only surpassed by China.
But despite all of that, most of the Bangladeshi
people still keep their money at home.
And now you might wonder…
Why?
What’s going on in Bangladesh that causes
people not to trust the banks?
Well, the answer is religion.
According to Islam, lending Money with interest
is a sin.
And 90% of the Bangladeshi population happens
to be muslim.
But wait a minute because things are changing!
In the last few decades, Muslim countries
have created a system that allows saving and
lending money and which also meets their Islamic
principles.
Yes, my dear viewers, we are talking about
Islamic Banking, a phenomenon that is becoming
more and more important in Bangladesh.
You might think this is great news for the
government of Sheikh Hasina, right?
Well, in fact, the opposite is true.
Islami Bank: Bangladesh's Most-Watched Bankers
So now the question is Why does the government
of Bangladesh distrust Islamic banking?
And more importantly…
What is the role islamic banking might have
in the future of Bangladesh?
Today we are going to answer these questions.
But before we do, let’s answer the most
urgent of all…
WHAT’S ISLAMIC BANKING ALL ABOUT?
Imagine we have 1000 USD in a saving account.
A western bank can give us an interest rate
of say…
3%.
I’m sure many of you have wondered…
How is it possible that a bank gives us money
just for holding it?
Where is the profit here?
Well, the truth is this.
The 1000 USD we put in the bank will not remain
in the bank’s safe.
Instead, they use that money to lend to companies
and individuals.
Those loans have a higher interest rate so
the bank makes money and gives us a little
share of that profit.
This is the Basic mechanism of the Western
banking system.
Of course, there are many ways to avoid risk.
Depending on the country we live in, the bank
is forced by law to keep a small percentage
of those 1000 USD.
That percentage cannot be lent and it’s
called the CASH RATIO.
According to SHARIA LAW, this system is sinful
because lending money with an interest is
unfair.
Of course, there is no problem with keeping
your client’s money.
But you can’t lend it to anyone.
In economic jargon, this means that SHARIA
LAW demands a 100% cash ratio.
So this is, in summary, is the way Islamic
Banks work.
And now you might wonder… where is the business
here?
Well, mainly, Islamic banks make money by
two means.
First, the banks charge their clients commissions
for keeping the money.
So, instead of giving you an interest rate,
Islamic banks can only give you a little,
symbolic present.
This present is called the HIBAB.
Another business practice that is allowed
by sharia law is adding “overcosts”.
For example, let’s say we buy a house with
an Islamic bank.
In this case, the bank will buy the house
for us and then, they will sell it back to
us with at a higher price.
This price is called the MUSHARAKA, and we
can pay it in instalments.
If, for whatever reason, we can’t complete
the payments, the bank will sell the house
in the market.
If they get some profit for this selling,
we, the client, might take a share of that
profit.
But wait a minute because this is not the
end of the story!
The Koran bans banks from investing in what
they consider ‘dirty businesses’ like
tobacco, weapons or pornography.
There is even a special index.
The “DOW JONES ISLAMIC MARKETS” index
which has 1400 companies from the New York
stock market where Islamic banks can invest.
As you can imagine, these banks are becoming
really successful in several muslim countries.
But, well, in Bangladesh they are kicking
arse.
Islamic banking is growing rapidly in Bangladesh
with a market share of about 20 percent.
Today, there are already 8 banks of this kind
in Bangladesh.
Even Western banks like CITY are starting
to offer Islamic banking services for those
who demand them.
In a country where bribes are a thing everywhere,
Islamic Banks are famous for their transparency
and good practices.
Islamic Banks, for instance, are famous for
having nothing to do with the Bangladesh government.
So, if you wanted to get a loan from an Islamic
bank, you had to demonstrate yourself that
you were a reliable client willing to pay
back your debts.
But wait a minute because things are not as
good as they seem for islamic Banks!
GOOD BANK, BAD BANK
Islamic banking arrived in Bangladesh in 1983,
when some Saudi and Kuwaiti hedge funds created
the so called “ISLAMI BANK.”
This bank played a crucial role in turning
an agricultural country into the textile powerhouse
it is today.
Today, clothes make up 80% of Bangladeshi
exports and Islami bank is the biggest bank
in the country.
Nonetheless, the growth of Islamic banking
in the country is not clear anymore.
BANGLADESH CENTRAL BANK IS NOT GIVING NEW
ISLAMIC BANKING LICENCES
Even those western banks that want to give
islamic banking services must wait.
The Bangladesh Central Bank will not give
more licences.
They claim they need to create brand new regulations
on the matter.
Meanwhile, the Government of Sheikh Hasina
has sent inspectors to the Islami Bank offices
and they are surveying all of their movements.
THE GOVERNMENT INITIATES A COUP AT BANGLADESH’S
BIGGEST BANK
BOARD MEMBERS RECEIVE A VISIT FROM MILITARY
INTELLIGENCE
So now you might wonder…
What is wrong with the Islamic Banks and the
government?
Well…
Sheikh Hasina claims they are financing Islamic
terrorism.
As we explained in this other video, Islamic
terrorism is becoming a real threat to the
country.
And many people think some of these banks
might be financing terrorist groups.
However… there are several reasons that
make us believe that, at the end of the day,
this is nothing but a power struggle.
Sheikh Hasina loves to take things under her
control.
And the fact that the biggest bank in the
country sympathizes with the proposals of
the opposition party does not help.
This is why, on January 2017, Hasina replaced
the Islamic bank’s board of managers with
her own supporters.
Since then, loans have skyrocketed, and the
Bangladesh Central bank itself has warned
that some of those loans are too risky.
Meanwhile, those Saudi and Kuwaiti hedge funds
that created the bank, 35 years ago, are now
taking back their money.
They simply don’t think it is safe anymore.
But wait a minute because this is not the
first time Sheikh Hasina tried to control
the financial industry in her country!
Do you remember Mohammad Yunus?
Well… he is in Hasina’s crosshairs too...
In the year 2006, after some terrorist attacks,
the Bangladeshi army organized a coup d’etat
and created a technocratic government.
Back then, Mohammad YUNUS was a favourite
candidate to lead that government.
In the end, it didn’t happen.
But Hasina learnt a vital lesson: beware of
the bankers.
Sometimes, they like to get involved in politics.
This is why Hasina’s first priority after
taking position in 2008, was to take care
of Yunus.
First of all, she forced him to resign as
the chairman of his own bank, the GRAMEEN
bank.
Of course, some of her claims were true.
Make no mistake, Mohammad Yunus is not a perfect
guy either.
But we will talk about this in another video...
But if making him resign was not enough, Hasina
started a campaign to diminish his image in
Bangladesh society.
NOBEL LAUREATE YUNUS GOT HILLARY CLINTON TO
STOP WB FUNDING FOR PADMA BRIDGE, SAYS HASINA
In other words, Sheikh Hasina knows how to
beat her political enemies.
First it was Yunus, now it’s the Islamic
banks.
So the question now is Do you think there
is an actual connection between Islamic Banks
and terrorism?
Or is this just an excuse made up by Sheikh
Hasina in order to keep the finance industry
under control?
And should Bangladesh allow Islamic banks
to operate in the country without restrictions?
Please, leave your answer in the comment section
below.
And, if you wanna learn more about Bangladesh
and the Islamic threat they are suffering,
please, click on the video that will appear
at the end of this one.
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