Cash and creed

The interference of religious leaders in softer and short-term issues like who should sing the Vande Mataram or which temple or mosque should be demolished to make way for development has been accepted by Indian society as a given. We are no longer shocked by restrictions on our freedoms governing marriages, processions, education. But when religious leaders issue a fatwa declaring insurance and earning interest on bank deposits as illegal, it’s time to take stock and realise that these fatwas are human interpretations that may corrode long-term security. Darul Uloom of Deoband, which was responding to a query, is looking at money through the prism of religion. I’d like to turn this around and view religion through the prism of money.

When you do that, this fatwa looks out of sync with financial instruments that have innovated their way out of most ills, including usury. Life insurance is a means to protect one’s family from unforeseen circumstances; in case of death, this helps the family stabilise financially. As far as usury goes, there are no two opinions. It has had no place in any society at any point in time. From Plato and Aristotle to Muhammad and Moses, all have denounced this practice (India’s farmers have borne this burden and suffered greatly). But the issue is more ethical and moral than economic. In a money-scarce economy, the rate of interest is likely to be higher and where unregulated, a profit-seeking entity is bound to demand — and get — the highest rate. Backed by the government, microfinance institutions today are attempting to change that.

Back to the fatwa. Today, the government, carrying a debt of around Rs 28,00,000 crore, is the country’s biggest borrower. With this money, among many other things, it finances development projects and pays salaries. If interest is to be shunned, will the cleric who issued this fatwa to Mohammad Zafeeruddin (he wanted to buy and sell life insurance), also ask him not to work for the government? Would he stop him from using national highways because they’re financed by debt? Further, companies are borrowers and lenders, they give and receive interest. Would this cleric stop him from working and investing in them, would he tell him to stay away from equity funds, avoid home loans?