Islamic Finance teaches to fulfil obligations, record in writing, and observe proper measurement with utmost honesty: Dr. (CA) Sahitya K. Chaturvedi

Dr. (CA) Sahitya K. Chaturvedi

Head of Accounts, AJMAL PERFUMES Group, Dubai,

President, Global Business Federation,

Middle East and North Africa (MENA), 

Former Convener

Retail, Small & Large Enterprises (RSLE) Focus Group

Indian Business and Professional Council (IBPC), Dubai

(Under the auspices of the Dubai Chamber of Commerce & Industry)

ACN: What did influence you to study Islamic Finance after attaining the most prestigious qualification of Chartered Accountant?     

Dr. Chaturvedi: The computation and payment of Zakat that is obligatory in Islam for those who have met the prescribed monetary and wealth in due law for every lunar period, is the first big factor that lured me into learning and perfecting the principle of honesty in the perfection of my work.

I believe the unique principles and faith-based practices in sharia-compliant commerce are socially significant and economically important for a society to maintain balanced chemistry among the stakeholders of business and consumers in general.

Secondly, I was inspired by my organization (Ajmal Perfumes Group) which operates the business in more than 50 countries, having 256 Retail Stores and manufacturing plants is proudly complied with Islamic Finance practices, and followed Halal theories in all the aspects of business and serve the mankind.

ACN: What is the basic approach that differentiates Islamic Finance from conventionally practiced banking and finance in the existing modern age?

Dr. Chaturvedi: The history of Islamic commerce begins with the revelation of the Holy Quran and Sunnah of the Holy Prophet Muhammad (peace be upon him) which contains legal principles and injections dealing with subjects such as ritual, marriage, divorce, succession, and commercial transactions and penal laws. It is a belief held by religion that absolute ownership belongs to Almighty Allah and man as servant and vicegerent act in trust in administering wealth in a just and equitable manner.

Being on faith and principles of honesty, the Islamic Financial system eliminates the interest and probabilities in the commerce contrary to the conventional financial system that is primarily based on Interest, futures, and hedging, yet establishes the common goal of achieving the same economic benefits as conventional finance offers to the society.

In advocating the form of economic activities under Islam, trade is encouraged, usury is prohibited, and acquisition of wealth should be achieved through lawful means that promote mutual consent and goodwill. It is termed Shariah-compliance, to ensure that the financial activities of the institution meet the requirements of Shariah Principals and rules prescribed in the Quran and the traditions of the Prophet Muhammad (peace be upon him).

ACN: We understand the presence of Islamic Banks in Gulf Cooperation Council (GCC) but how are those regulated in regards to the standards of accounting, administration, and quality of transactions to the satisfaction of international consumers?

Dr. Chaturvedi: Firstly the banking and insurance in all the countries recognizing the window of Islamic finance are regulated by the law and legislation of the respective country and additionally, the International Professional Institutions such as AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions), IFSB (Islamic Financial Services Board) and followed by Internal Shariah Control Systems (ISCS) do prescribe and recognize the quality standards, guidelines and the best practices that are globally accepted.

Though Interest-free banking is a unique concept in International Finance Industry yet its acceptance is rapidly growing in UAE followed by GCC and the Middle East and North Africa (MENA), Malaysia followed by eastern countries, and the UK led in European territories and America. In the UK, although Islamic banking remains a fraction of the overall banking sector but is expanding five times as fast as the traditional market. The government of India is also conducting the research work for introducing the same and inviting foreign investments.

ACN: Kindly share some of the economic insights and Emerging Trends in Interest-Free Banking and Islamic Commerce.  

Dr. Chaturvedi: In the existing phase of post Covid struggle, Islamic Finance is offering a multinational and multi-disciplinary emerging industry, representing more than 1% of the global financial markets at the size of USD 3 trillion and targeting USD 10 trillion as emerging into Halal Food, Fashion, cosmetics, Medical, tourism, media, blockchain, Insurance, and Capital Markets.

The GCC is expected to be one of the key drivers in the expansion of Islamic finance. In addition to the banking support, the platforms provided by Dubai Islamic Financial Center, NASDAQ Dubai, and Abu Dhabi Security Exchange are promoting SUKUK at the growing rate of 21% annually.

It can be wondering to believe but are evident from the facts that financial products like Sukuk, Mudarbah, Musharaka, Karj Hasan, Mubadala, Takaful, and many more likes are thriving at the fastest growth rate in the modern age while following the ancient principles of thousands of years. These ancient principles are, timeliness of payment of debt or delivery of an asset, tolerance in terms of bargaining by considering each other’s requirements and circumstances, mutual revocation of contact on request of one party, if one finds it inconvenient, honesty or Amanah in all statements, representations, and warranties, and uncertainty (Gharar) and interest (Riba) are prohibited by Shariah.

About the author:

Dr. (CA) Sahitya K. Chaturvedi is a discerning business professional in Dubai with a global portfolio in Finance, Economics, Money Market and Business Leadership backed with passion and full knowledge of Islamic Banking and the halal industry globally. He is Qualified Professional of Islamic Commerce, and is a Ph.D. and Chartered Accountant of India, England & Wales with several international recognitions and experience in Retail, manufacturing, Supply Chain, Real Estate, Banking, and Law at medium to large enterprise operations. Living over the decades in Dubai, Dr. Sahitya is associated with the Ajmal Perfumes group and represents the senior presence in the Indian Business and Professional Council (IBPC, Dubai) under the aegis of the Dubai Chamber of Commerce and Industries. He is also
President, Global Business Federation MENA.

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