IFIs also face charges that they’re inefficient. “For 20 years I have been in that camp which says Islamic finance has hardly anything new to offer,” says Humayun Kabir, the chief financial officer of the National Bank of Oman.
“It is an inefficient system which has only done well on paper because banks here have got a lot of capital.” Kabir also says high charges, complicated documentation and processes that have come to be identified with IFIs.
“Conventional finance has undergone a lot of rigor whereas Islamic banking is basically repackaged conventional finance to tap excess liquidity,” says Kabir. He admits that conventional financial instruments were abused in the West, but insists, “There is no superior intellectual system in the world and at the end of the day Islamic banks are doing regular banking by using a different set of nomenclature.”
Doubts about efficiency, rigor, processes and regulation of Islamic banking are largely valid. But it is the underlying theme that is keeping the flock together. Industry players in the region say it is time for scholars to bury their petty differences and rise to the occasion, as they may never get a better chance.
Toby Birch isn’t interested in numbers though. He says that only a minority see the beauty of the system and how its philosophy could, and should, be applied globally. “What could be more utopian than a banking system based on ethics, partnership and charity?” he asks. “For Islamic finance to succeed as a true alternative to the selfish banking system we now endure, it must be true to its roots in reality and substance, thereby avoiding the accusation of ‘smoke and mirrors’ from the cynics.”

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