Proponents of Shariah Banking are pushing for its acceptance in India, where there has been strong opposition to the concept from time to time.
Now the financial jihadists are trying to foist Shariah Banking off on Indians by dubbing it “Interest-Free Banking.”
You can put lipstick on a pig, but it will still be a pig.
The use of the term “interest-free” to describe Shariah Banking is extremely misleading, but it is a common practice around the globe in the Shariah Finance industry.
The implication from the term “interest-free” is free money, such as when a car dealer offers interest free car loans for a period of time. Shariah-compliant loan apparatuses are anything but “free money.” They don’t express their charges and fee in terms of interest, but the creditor institutions most certainly make money off of their loans and research indicates that these Shariah-compliant loan mechanisms are almost always more expensive in terms of fees and charges than conventional loans which simply charge interest.
But disclosure of these fees and charges is spotty at best industry-wide.