Category Archives: Everyday Life

How Many More ‘Halal’ Ponzi Schemes?

It is important to note that the very idea of Islamic banking and promoting it as a parallel to conventional banking – which is being portrayed as un-Islamic – and which has caught the imagination of a section of god-fearing Muslims, is a clear manifestation of shifts in Muslim politics over the world.

'Halal' Ponzi Schemes

Image for representational use only.Image Courtesy : Business Today

Afzal Pasha, a 55-year-old labourer, is dead. He died of a heart attack a few days back.

The news that the attractive scheme in which he had invested his life’s savings worth Rs 8 lakh went bust proved unbearable for him.

While Afzal’s tragic death could catch headlines, we will never know the plight of the thousands of investors – all of them belonging to the Muslim community – who had similarly invested their hard-earned savings in the said investment scheme launched by Mohammed Mansoor Khan in 2006 through his firm I Monetary Advisory (IMA).

The scheme was declared ‘Shariah-compliant’ and worked on ‘“no interest” policy of Islamic banking. A section of the clergy had even certified this scheme as “halal”, which means “lawful” or “permitted” in Arabic, which helped it easily earn the trust of the Muslim community. Small investors from across the state of Karnataka had flocked to it with their investments ranging from a few thousand rupees to a few lakhs.

A few days back, the promoter of IMA just disappeared from Bengaluru and is supposed to have fled to Dubai.

According to rough estimates, the size of the fraud is of more than Rs 2,000 crore and a special investigation team (SIT) has been constituted to look into the scam and punish the fraudsters. Apart from the fact that people invest in such schemes because of the promise of incredible returns, what is so particular about these schemes which lure Muslims from various strata to go for it?

One, as ‘Shariat’ compliant fund, they formally claim that they do not invest in companies that deal in alcohol, tobacco, weapons, pornography or gambling, among others.

Two, they do not take “deposits” or pay “interest”, rather convert the investors into limited liability partners and pay the investors dividends.

What is notable is that it is not for the first time that one witnessed a firm being run on purely ‘Islamic principles’ has similarly gone bankrupt. ‘The Milli Gazette’ had time and again reportedactivities of similar fraudsters who had robbed ordinary Muslims of their precious savings under the name of ‘Islamic investment’.

Al-Fahad goes Al-Falah way

… Another fraud in the name of ‘Islamic investment.’ Delhi-based Al-Fahad investment group downed its shutters in the densely Muslim populated area of Okhla and left investors high and dry. It is not the first instance when a non-banking investment company collecting millions of rupees in the name of Islamic and halal investment schemes has bolted with no trace. (…) According to a brochure of the company, Al-Fahad worked on the principle of participation in profits. The amount invested by people, a group or trust in different schemes was to be utilized to finance various profitable ventures. The profit so earned was to be shared among investors and the company (in the ratio of 80:20).

Four years later, it had reported about another such scam by ‘Al-Barr Finance House’ –headquartered in Mumbai with branches in different parts of India – which had adopted a little different method to defraud the gullible Muslims:

Islamic” fraud is back, New “al-Falah” on the prowl

While a sizable number of Muslim investors are still recuperating from the scars inflicted by Al-Falah brand of “Islamic” financial sharks, we now have another “al-” brand of companies claiming to be an associate of a multinational Islamic finance group. Unlike Al-Falah, this group has adopted another route for harassing poor Muslims.

Coming back to the busting of the IMA Ponzi scheme, one can also witness a palpable sense of anger among a section of Muslims who are venting against the Maulanas exemplified by what a young Asif told a reporter:

Hunt down the maulanas and ulemas who went about asking people to invest only in halal schemes. What makes anyone think this kind of scheme is halal?”

This techie had also a word of advice for Muslims:

Your earnings are halal only when you work hard for it. Otherwise it is haram (forbidden under Islamic law). At least now Muslims should realise this.” (-do-)

It is different matter that this advice is going to fall on deaf ears.

It is important to note that the very idea of Islamic banking and promoting it as a parallel to conventional banking – which is being portrayed as un-Islamic – and which has caught the imagination of a section of god-fearing Muslims, is a clear manifestation of shifts in Muslim politics over the world.

Growing acceptability of halal investment groups among large sections of Muslims is also a reflection of a significant sections remaining aloof from conventional banking systems for various reasons. Sachar Commission had rightly noted:

The access of Muslims to bank credit, including priority sector advances, is low and inadequate. The average size of credit is also meagre and low compared with other socio-religious communities both in public sector and private sector banks. The position is similar with respect to finances from specialised institutions like the SIDBI and NABARD. Census 2001 data show that the percentage of households availing themselves of banking facilities is much lower in villages where the share of Muslim population is high…. The financial exclusion of Muslims has far-reaching implications for their socio-economic and educational uplift.”

This financial exclusion could be a considered a culmination of various factors. It has also to do with the fact that majority of the population is poor and engaged in informal sector; it is also because of a certain mindset prevailing in the banking sector, which has categorised Muslims and Muslim-dominated areas as “negative zones” (which is documented in the Sachar report), and also for reasons of faith. (Purnima S. Tripathi, “Inclusive Banking”, Frontline, vol. 26, no. 21, October 10-23, 2009)

Any neutral observer can see that these twin factors – shifts in Muslim politics over the world and financial exclusion of Muslims here in India – has led us to a situation where one witnesses proliferation of such schemes when “[o]ne can find these banks in almost every locality where a substantive Muslim population exists”.

As a caveat, one needs to admit that all such ventures cannot be painted with the same brush and there could be quite a few genuine people among them who, as pious Muslims, could be running these ventures with utmost transparency.

Question arises what needs to be done so that separating the genuine efforts one is able to curb proliferation of such schemes among minorities which have effectively turned into ventures where “[u]nscrupulous Muslim shylocks, supported by a section of the Muslim clergy, continue to operate in India and are able to hoodwink Muslims in the name of Islamic or non-interest banking”.

First of all, it is important that government and the Reserve Bank of India (RBI) come forward to take stern action against this kind of scandalous banking. A necessary first step in this direction could be guidelines issued by the RBI are strictly enforced in all such cases which pursue financial activities of the banking/non-banking kind under the banner of ‘Islamic Banking’ or Sharia Compliant Funds etc.

Secondly, it is equally important that special attempts are made to end the financial exclusion of Muslims – evident at very many levels – by adopting special measures to accomplish it.

Thirdly, it is also important to raise broadly two categories of questions:

– How did Ulemas or Islamic scholars of yore looked at introduction of modern banking?

– How countries which call themselves Islamic look at this proposition; are they ready to convert their modern banking system into Islamic Banking or have kept their efforts at a symbolic level only?

It is instructive to look at the debates in colonial India between Muslim scholars when modern banking was being introduced and a section of the Ulemas who objected to it on the basis of their understanding of Islamic principles. In his important intervention on the subject, Ather Farouqui tells us:

According to eminent Muslim thinkers of the twentieth century including Maulana Shibli Nomani and Allama Iqbal, bank ‘interest’ is a profit on investment or charge on capital and when it is not exploitative, it is not riba.

(Islamic Banking in India at the Service of Pan-Islamists, MAINSTREAM, VOL L, NO 11, MARCH 3, 2012)

He also quotes a

…a letter dated January 17, 1932 to Khwaja Abdur Raheem, Allama Iqbal writes, “Interest in every form is prohibited. But this is so in an ideal society. Fatwa of Shah Abdul Azeez is that to draw bank interest is permissible.” [B.A. Dar (ed.), Anwaare-Iqbal (Karachi: 1967), p. 245 (publication house not known)]

What does the experience of Islamic countries tells us on this matter. One can refer to Farouqui’s observations once again:

In Saudi Arabia, banks, are involved in charging and paying interest. The only difference from other modern/conventional banking is that they ’employ semantics’ and instead of using the term interest use the terms profit-loss sharing. Looking at the fact that it is an oil-rich economy, banks there rarely face losses and the depositors ‘share the profits’ which is not considered ‘riba’ (usury)

The most interesting case vis-a-vis Islamic banking pertains to Pakistan. Here few years back Islamists demanded to overhaul the conventional/modern banking system for an end to the interest paying system. The Federal Shariat Court also ruled in their favour but the government did not take it up in the legislature. When the matter went to Supreme Court, it has set aside the judgement and the matter is still pending.

He adds:

Even in an Islamic state such as Pakistan, therefore, interest-free banking has till date been unsuccessful largely due to the lacunae in the existing system but also as a result of the dichotomy between overemphasis on religious principles while trying to find one’s place in a globalised market economy.

(Islamic Banking in India at the Service of Pan-Islamists, MAINSTREAM, VOL L, NO 11, MARCH 3, 2012)

Last but not the least, one also needs to brood over the fact that in a polarised ambience whether such a move would prove really beneficial for those Muslims who are financially excluded or would it pave the way for their further pauperisation?





A Case of Harassment of Dalit Student in Jadavpur University: Srijan Dutta

Guest post by SRIJAN DUTTA

The value of a man was reduced to his immediate identity and nearest possibility.

The line quoted above is from Dalit PhD scholar Rohith Vemula’s ‘last’ letter, discovered after he was found hanging in his hostel room in January 2016. The letter had exposed how caste-based discrimination is used as a medium of oppression against Dalits and other minorities. Casteism serves both as an ideology and as a means for exploitation by the upper castes and upper classes of the Indian society.

Recently, a complaint has been made by a second year Masters student of the Department of Library and Information Science in one of the hotbeds of Bengal student politics, Jadavpur University. Jadavpur Uiversity is also a premier institution of higher learning, with a well deserved reputation.  Raja Manna, a student belonging to the ‘Scheduled Caste’ category, has revealed that he has been facing a lot of harassment and discrimination at the hands of his dissertation guide, Prof. Udayan Bhattacharya, an upper caste Brahmin.

Continue reading A Case of Harassment of Dalit Student in Jadavpur University: Srijan Dutta

Sexual Harassment ‘in-house’ for the Supreme Court – is sunlight the best disinfectant? Pratiksha Baxi


The publication of a sworn affidavit by a former Supreme Court staffer testifying to sexual harassment by the Chief Justice of India has been treated as a scandal, whether the complainant was believed or not. And the subsequent events – an extraordinary suo moto hearing, allegations of a conspiracy against the independence of the judiciary, the in-house committee’s decision to exonerate the CJI – have evoked the normative question whether such forms of judicial exceptionalism are the necessary condition for judging in our courts.

Yet asking such questions ran the risk of being labelled as an ‘institution de-stabiliser’. The intent was to invent social consensus by deploying labelling as a technique of censoring and delegitimising feminist critique. Not so long ago women who challenged male authority were described as witches, today they are labelled anti-national, institution destabilisers, presstitutes or simply, left-liberal/JNU type.

However, whether one walks right, left, centre or zigzag, it cannot be denied that jurisprudential questions need answers beyond the specifics of this case. One would have thought that it is also in the interest of all judges to devise a procedure that is constitutionally sound and invested in gender justice, while recognising the specific problems that judges may have because of the nature of their work. And that the Supreme Court would recognise that it is in the interest of every survivor of sexual harassment, irrespective of ideology or status, to be provided normative answers.

Continue reading Sexual Harassment ‘in-house’ for the Supreme Court – is sunlight the best disinfectant? Pratiksha Baxi

And Somewhere There are Engineers …

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A conversation with youngsters – who are by nature bubbling with energy , fired with idealism and suffused with innumerable questions – is a thing which everyone with grey hair looks forward to.

For someone like me it is an added gift this morning that after exactly a gap of forty years this writer is with students of engineering helping him rekindle memories of his own days of engineering in the city of Varanasi. A really exciting period when few of us had come together to do something for society as well. A period worth remembering when we were engaged in running evening classes for deprived sections in neighbouring villages, learning from their life experiences and in spare time reading good literature, tracking trajectories of different revolutions, debating, discussing, brainstorming what else can be done to awaken the society around. Continue reading And Somewhere There are Engineers …

Seasons of Violence: Vikas Bajpai


Guest post by VIKAS BAJPAI

Sometimes, memories stacked away for long, come tumbling out. If these are not just about personal nostalgia, dwelling upon them could serve some public good.

It was 31 October, 1984. The time may have been around 11 am. I was taking my second term exams for class XI in a room on the ground floor of the science block of the Delhi Public School, R K Puram, New Delhi. Unfortunately, mine was the first seat very close by to the only entrance and the exit for the room. ‘Unfortunately’ because  this made seeking the help and guidance of fellow examinees in this ordeal a rather adventurous proposition. Nevertheless, I focussed on the question paper intently, trying to make sense of what was expected of me.

A while after the examination had taken off, the teacher invigilating in our room and other teachers in the adjacent rooms flocked together at the door of our room for a conference of sorts, each having a cup of tea in their hands which had been duly served by that time. Barely a minute or so into their hushed conference, I over heard one of the teachers remark – ‘madam ko to goliyan lag rahin hain’ (madam is being riddled with bullets). I was a bit startled as to what that could mean; but then, I had a task at hand and got immersed in it before long. Continue reading Seasons of Violence: Vikas Bajpai

The Impossible Gandhian Project and its Limits – Remembering the Mahatma Today

Gandhi, Nehru and Azad, Wardha 1935, image courtesy Governance Now

Majboori ka naam Mahatma Gandhi (Roughly: Compulsion thy name is Mahatma Gandhi)

I have grown up hearing this expression and have often wondered about its meaning and at the almost proverbial status acquired by it. Whose majboori or compulsion was Gandhi really? Well, at one level, everybody’s, for practically every current within the anti-colonial struggle was uncomfortable with his presence and his leadership. Jawaharlal Nehru had even remarked once that after independence, his fads would have to be kept in check. All nationalists who fought for independence from colonial rule (as opposed to the pseudo-nationalists who tried to convert it into a cow-protection movement) had their gaze fixed on the state. They wanted control of that coveted instrument – that was the crux of their anticolonial struggle. There were others like BR Ambedkar, who too invested a lot in the state but realized that the state in the hands of the nationalists would be a disaster for his people. But no one among them (poet-thinkers like Tagore apart) was prepared to look beyond the state. And Gandhi’s disavowal of the state – and of politics as such – was something that no one could digest. More than anything else, that was what made him a majboori for this set of people who could only lay their hands on their object of desire as long as Gandhi was in the leadership – for he alone could move millions like no one among his contemporaries could.

But my hunch is that these were not the people who coined this expression. Gandhi was a bigger majboori for another set of people who were, ironically, equally disinterested in the state and its ‘capture’ – at least till recently. Yes, these were the different currents of the Hindutva Brigade (VD Savarkar of the Hindu Mahasabha and his followers and the Rashtriya Swayamsevak Sangh). They had to tolerate Gandhi – that is exactly what their majboori meant – till they could finally eliminate him. And it was one Nathuram Godse, with connections to both Savarkar and the RSS, who eventually killed him. There were earlier attempts too on Gandhi’s life – all from upper caste Hindus (one lot being Chitpavan Brahmins). Continue reading The Impossible Gandhian Project and its Limits – Remembering the Mahatma Today

Three decades after Ameena, ‘Bride-Bazars’ continue to thrive in Hyderabad: Lovish Garg

Guest Post by LOVISH GARG

Ameena Begum was only ten years old when she was married to a man old enough to be her grandfather. The man- a 60-year-old Arab from Saudi Arabia had come to her house in Hyderabad to see Ameena’s elder sister for marriage but found her to be too ‘ugly and dark.’ He instead expressed desire to marry the young Ameena which the father readily agreed in exchange for a paltry sum of Rs 6,000.  She was later rescued by Amrita Ahluwalia- then an air-hostess with Indian Airlines after she found the young girl crying inconsolably on the Hyderabad-Delhi flight in-route to Saudi Arabia.

This incident put the global spotlight for the first time on the practice of ‘bride-shopping’ in the old city area of Hyderabad where minor Muslim girls from poverty-stricken families are married to older, mostly Arab men for a small sum of money. About three decades after this incident of August 1991- nothing much has changed and the practice of Sheikh marriages continue unabated with estimates suggesting around 2000 of such marriages performed only in the last one year.

The genesis of Sheikh marriages can be traced to the late 19th century when the Nizam of Hyderabad started hiring Chaush Arabs from what is the present-day Yemen. These men served as the military guards and later on high positions in the Nizam’s army and administration. The Arabs also brought with them the ritual of offering gifts and dowry to families who would marry their daughters to them. However, when oil stuck in the Gulf and situation in Hyderabad turned chaotic because of the rising peasant movement and later fall of Nizam- many such Chaush Arabs returned to their homelands.

Continue reading Three decades after Ameena, ‘Bride-Bazars’ continue to thrive in Hyderabad: Lovish Garg