March 1, 2017
By Dr Hanudin Amin
GRAFT is one of the unethical practices occur universally. By definition, unethical practices are actions that fall outside of what are considered morally right among individuals in both public and private sectors.
According to Malaysian Anti-Corruption Commission (MACC), graft is a reward for an individual for doing or not doing any act in connection with his official duties.
This includes money, gifts, bonuses, vote, services, positions and discount. For example, Ali presents a watch to a banker of XYZ Bank for approving the financing to a company owned by Ali.
There are 163 cases pertinent to graft and misconduct reported in 2016 in Malaysia. Of these, Terengganu reported a large occurrence of 22 cases, followed by Selangor with 20 cases.
Sabah and Labuan reported 6 and 8 cases, respectively. The cases reported covering statutory bodies, public, public servants and private entities. The last one captures banking institutions.
These cases are of recurring issues in nature that flow down from one generation to another at the expense of the public confidence and trust.
Indeed, owing to its subjectivity, it is somehow difficult to detect on how and why a bribery occurs. It is only explicitly learned when a third party makes a report to the authority. This article considers graft in the banking industry.
In this week, I intend to write on graft issues without specifying any banks. I believe many banks in Malaysia have extended proper and sound measures to fight grafts.
It is unfair to put 100 percent blame to bankers because of graft cases. Other stakeholders should be revisit for the blame. Graft will not be of occurrence, if one of the two parties involved reject the offer – it emerges because two of them are in congruity for personal gain.
Two objectives are examined.
Objective #1 – Do the Quran and the Hadith tell us with regard to the prohibition of graft?
Objective #2 – What are Islamic remedy principles that can be used to mitigate graft cases?
According to al-Qaradawi (2007), taking a bribe is one way of consuming someone else’s wealth wrongfully.
A bribe refers to any kind of property, which is offered to a judge or public servant in order to obtain a decision in favour of oneself or against a rival, to expedite one’s own affair, or to delay that of one’s competition and so on.
It is clearly understood that bribe taking is condemned by the Almighty as prescribed in the Quran.
Allah Ta’ala says “And do not consume your property among yourselves wrongfully, nor seek access to judges by means of it in order that you may sinfully consume a portion of people’s wealth, while you know (what you do) (2:188)”.
This verse suggests that a proliferation of graft in a society leads to corruption and oppression, where the value of brotherhood is eroded. It is worth noting that accepting and taking a bribe can tarnish the employees’ morale and productivity.
Doing such an immoral behaviour makes them the low of the lowest – disturbing the reputation and performance of a company they work for.
The Prophet Muhammad (S.A.W) reminds us in his Hadith by saying this “Allah’s curse is on the one who offers the bribe and on the judge who accepts it”. In reality, there is nothing good in graft – be it small or big.
To uphold the prohibition of graft, there are five Islamic remedy principles but are not confined to:
1-Upholding taqwa mechanism – the term taqwa means Allah-fearing. This mechanism is more powerful than the government regulatory framework.
The reason is of two-fold.
First, person’s realisation that Allah knows the manifest and the hidden and will hold all accountable for their deeds.
Second, an improved sense of brotherhood where one helps another in good things as prescribed in the Quran (5:2).
2-Creating an Islamic working environment – Islamic banks should develop an Islamic working environment to mollify a multiplicity of needs of various stakeholders.
This may include the importance of work as an ibadah for better relationships with fellow muslims and Allah – the former is habluminannas and the latter is habluminallah.
Everybody should be treated equally with dignity no matter what their circumstances, ethnic and colour, inter alia. It is captured the true notion of treating individuals with respect according to Islam that protects them from discrimination and racism.
3-Engaging all in decision-making – It is of importance to put musyawarah firstly as an important mean to get approval from all staff regarding a particular issue that needs a succinct decision.
Everyone is allowed to speak freely within a controlled parameter to gain access into one’s opinion of a particular issue for an improved resolution.
4- Establishing cogent Islamic ethical principle – The underlying philosophy of doing this is to eliminate the opportunity for corruption by closing off loopholes and eliminating misconceived rules that lead to a bribery behaviour.
This principle focus is to change the game rule by directing one’s behaviour to follow Shariah and avoiding misconduct.
It is likely to be far effective if it is supported by efforts to buttress the moral and ethical foundation of human behaviour.
5- Instituting Islamic talent programme – Employees of Islamic banks are having discrepancies in terms of knowledge, ability and acumen (KAA). Some officers perform well, whilst some are not.
The imbalance is likely created 5 soul diseases (i.e. self-admiration, anger, prejudice, envy & pretending virtuousness) among parties involved.
In order to address this issue, knowledge transfer through know-how approach should be established to promote a prosocial behaviour.
A well-performed individuals tend to extend their hand to improve others’ performance.
Thus, the giver and the taker build a valuable mutual respect that produces a well and harmony culture to an organisation.
In conclusion, graft is a serious challenge for banks since it lessens business credibility and profits when bankers abuse their positions for personal gain.
Public confidence will be tarnished out of customers lose respect, requiring banks to spend times and resources to regain the confidence to reassure customers the bank is still doable.
In all, the Islamic remedies introduced should be extended to both parties – Islamic banks and their customers.
With a proper plan, the remedies offer an effective directive to discourage corrupt behaviour for better and secure banking dealings, at least.
*The author is an Associate Professor/Dean at the Labuan Faculty of International Finance, Universiti Malaysia Sabah, Labuan International Campus. He has a PhD from the International Islamic University Malaysia (IIUM) in Islamic Banking and Finance (PG310163).