The Art of Islamic Banking and Finance: Tools and Techniques for Community-Based Banking

(Tina Meador) #1

To satisfy the needs of these customers, we wanted to expose them to
all the edicts and Shari’aa opinions (fatwas) by displaying these fatwas in
full on the http://www.LARIBA.com Web site. We urged our customers to read
these edicts carefully before they decided to use our services. We also made
it clear on the Web site that including these edicts on our Web site did not
mean that these scholars have given us an edict to sanction our own model,
and that we shall never use the names of the scholars to sell our products
and services. In addition, we made our Shari’aa supervisor available to an-
swer any questions from these customers. The Shari’aa supervisors used to
spend approximately 3,000 minutes a month on their mobile phones
answering questions about Shari’aa and the details of the LARIBA finance
model. This strategic decision proved to be an important one, because it
made us serve and meet those highly analytical, deeply religious, and intel-
lectual customers who are interested in reading and analyzing. They are dis-
ciplined to reach their conclusions on their own, without being influenced
by superstar names or persuasive marketing and advertising. It also was
very fortunate that they were so well-disciplined, because of the highly di-
verse nature of the many scholars (some of whom are self appointed), who
have opinions that in many cases differ from one scholar to another, de-
pending on their country of origin and the religious subgroup they repre-
sent. This situation made us address the customer base in a direct and
transparent way.


Monetarists4,5,6 These research-oriented Muslim scholars in the field
of monetary theory believe that the use offiatmoney and credit creation in
the modern banking system through themultiplier effect, as explained in
Chapter 5, are the main reasons for the ills of the international riba-based
conventional monetary and finance systems, and that truly Islamic banking
should not be part of these. They sincerely believe that Islamic banking
scholars and practitioners should start a serious effort to use gold as a mon-
etary base. Efforts toward that goal were attempted in the late 1980s with
the introduction of the gold dinar in Malaysia. The prime minister of Ma-
laysia, Dr. Mahathir Muhammad, was one of its supporters. Many of these
monetarists believe that Islamic banking in afiatmonetary regime is in fact
a mere change of names and brands without resolving what they believe to
be the fundamental problem offiatmoney and riba-based conventional
banking monetary expansion techniques. It is believed that resolving this
major concern will take a very long time, and it would not be practical to
wait until it is resolved, because it involves major structural changes in the
world’s monetary and political systems. It is the duty of RF bankers to de-
velop wise solutions that can be applied now to benefit all people by apply-
ing the tenets of Shari’aa in an intelligent, prudent, and productive way.


234 THE ART OF ISLAMIC BANKING AND FINANCE

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