In these times of financial turbulence, Shariah-compliant banking and finance is being endorsed for its

stability and is evolving as the best choice on the road to economic recovery.

According to Imtiazz Sarfaraz Khan, Head of Retail Banking and Finance Department at Abu Dhabi National Islamic Finance, Shariah-compliant finance has always been an appropriate and relatively risk-free route for financial dealings but was downplayed for quite some time mainly due to political considerations across the globe.

Khan said the definitions of Shariah-compliant or Islamic banking were endless.

"Some non-Shariah-compliant banks and financial institutions may choose to call it 'interest-free banking', while others are comfortable with 'zero interest on asset-backed finance'," Khan added.

"If one looks from the customers' point of view, the key attributes that drive consumer confidence are trust and transparency – not just quick-fix solutions."

He added that these positive attributes are considered "honesty of purpose" or "neeyah" in Arabic.

"Recently, there has been a very visible trend in Shariah-compliant banking and finance, which is here to stay – somewhat like a revolution of sorts, with a strong social message and a positive contribution to the individual and the economy as a whole. Shariah-compliant finance helps in filtering funds away from non-social, non-ethical areas, while promoting thrift," he said.

Khan said easy access to money through personal loans and a variety of credit products such as

conventional credit cards and overdrafts have tempted the common man. People leveraged on their accounts and borrowed more than what they were eligible

during the economic boom. In the downturn, it has been difficult for them to arrange their payment installments and has backfired on their saving plans. In traditional financial services, this short-term benefit has opened a Pandora's box.

This is due to the fact that money is not treated as a commodity in Islamic finance, but as a means of exchange to facilitate the flow of goods and services. A sharp eye on trust and transparency is maintained by the Shariah controllers of each bank, but implemented by the entire team – policymakers, managers and front-end sales and service personnel.

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