US Treasury Department: Islamic finance finds an unlikely patron

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There’s quite a bit of interest (pardon the pun) in Islamic finance today. Modern Islamic finance – which eschews interest and incorporates ethical standards into investing and transactions – has slowly been growing, both in terms of financial services and a field of study, for several years now among Muslims in the west. It started with no-interest home purchases, a business that has since grown to help thousands of Muslims acquire property in “rent-to-own” programs. Gradually, other Islamically-oriented services, such as Islamic mutual funds and banking services, emerged. And as the Islamic banking industry matured around the world, mainstream companies like Citibank bought into it by creating and/or purchasing their own Islamic banking subsidiaries. With international marketplaces, especially between Muslim countries, increasingly using Islamic financial principles, the practice has caught the eye of the US Treasury Department, which this week announced the appointment of Dr. Mahmoud El-Gamal to serve as the first Islamic Finance Scholar-in-Residence. “With the recent growth of the Islamic finance industry, deeper understanding of Islamic finance is priority for this Administration.” said John Taylor, Under Secretary for International Affairs. “I look forward to interacting with him on important policy issues.” Gamal plans to conduct workshops for US government agencies on Islamic finance, including overviews of the industry, prudent supervision and regulation, accounting standards, government practices and debt management. But the crossroads of Islam and money at the Treasury Department is more likely where you’ll find an effort to cut off terror financing, which, with complex hawala systems and other such networks for moving money, is another benefit of having Mr. El-Gamal on board.

Shahed Amanullah is editor-in-chief of altmuslim.com.