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

the deposited funds in financing different projects. As the funds available to
the banker grow—as in the case of the mega-banks—the loan officer of the
bank is given a quota that must be met, and in most cases, without proper
training on social responsibility, experience shows us that money motivates
many such ‘‘loan sales people’’ to sell more loans. This is especially true for
loan officers who receive a percentage of the loans booked as a commission.
They use their sales training to entice and encourage the consumer and busi-
nesses to borrow more money than they need and to create more consump-
tion. This may lead to more loans for the bank and more consumption
for the economy, but in many cases it leads to very little real economic pro-
duction and a deeper hole of debt for the consumer and the business. In ad-
dition, the riba-based banker who works in the treasury of the bank can
also choose between a number of short-term and long-term investment in-
struments to squeeze as much interest as possible out of that cash. Because
the funds are insured by the FDIC, the riba-based conventional bank man-
agement would also use the DDA deposits, which are deposited as a trust
and conceptually for safekeeping, to generate more interest income.
In contrast, the RF banker is trained to look at the money deposited in
the bank in a quite different way. First and most important is the DIT (de-
posit in trustorAmanadeposit). This DIT money cannot be invested in any
instrument except the Fed Funds, which are, in fact, government instru-
ments that reflect the government’s monetary policy in afiat(paper) money
regime, as discussed in Chapter 5. The interest given by the government—
the Fed Funds rate—is not the same as the interest prohibited by the Judeo-
Christian-Islamic value system and by the Law (Shari’aa). In this case, the
RF banker becomes the safekeeping holder of this money in trust. The other
role of the RF banker is to act as a money manager (mudharib)entrusted
with the prudent investment of the funds earmarked for that purpose to cre-
ate real economic production, job opportunities, and prosperity. This is
done by investing the money in projects and services that will make a differ-
ence in peoples’ lives. The RF banker is trained to:

&Encourage people to live riba-free by helping them devise a plan to pay

off their debts (especially the riba-based ones like personal loans and

credit card debt) as soon as possible in a methodical process and to

help them achieve their dreams without overburdening themselves

with excessive borrowing

&Help them in restructuring and reducing their obligations and debts

&Encourage them to consume less by living within their means

That is why the RF banker in charge of financing/investing operations
(lending in riba-based banks) is not trained to ‘‘sell’’ loans to customers in
order to maximize the size of the loan portfolio. The RF banker is trained to

316 THE ART OF ISLAMIC BANKING AND FINANCE