Didn't Borrow, Sir!

Didn't Borrow sir

Dr M: Pay if you borrow

When a bumiputra fails to pay up a bank loan, others in the community will become victims as the banks will be wary of extending loans to them.

Stating this, former prime minister Tun Dr Mahathir Mohamad said bumiputras should not borrow if they cannot make the repayments because their inability to pay would undermine the credibility of others in the community.

“If you borrow, just take out a loan for the amount you can afford,” he said, advising them to pay up to make it easier for other bumiputras to get bank loans.

Dr Mahathir was speaking to reporters after witnessing the signing of an agreement between the Royal Mint of Malaysia and Franklin Mint of the United States.

Dear Tun,

Please understand these Bumis did not fail to pay the bank loan... It was presumed that the money given to them as a joint-venture with the bank, as they are Bumis, and the New Economic Policy (NEP) was suppose to grant them the rights of ownership.

So, there was no loan; and therefore, no need to repay. It was suppose to be financial grants which banks are suppose to contribute to meet the NEP's objectives.

And, in most cases, it was given as an Islamic Banking facility; which mean, Profit-sharing from the joint-entreprise. Since the projects undertaken had suffered financial losses, therefore, the bank must also accept and share the losses.

Isn't this the fundamental concept of Islamic banking? Otherwise, what is profit-sharing? Islamic Banking cannot accept interest payment, isn't it?