‘‘Islamic’’ names have been given to various transactions that
do not truly reflect the goals or vision of Islam. The result of this
frame of mind is called al–hiyal al-shari’ yah, ‘‘shari’aa tricks,’’
where forms, terms, and words are changed rather than the sub-
stance when the need is really for a new vision.In fact, a new term was coined by one of the distinguished academic
researchers in the field and the first professor to hold a Chair in Islamic
Finance and Economics at Rice University, Professor Mahmoud Elgamal.^10
The term he uses isShari’aa arbitrage, by which he means that a new arbi-
trage has been created for Shari’aa scholars’ sanctioned models. Such arbi-
trage does not really add anything to the transaction. It only adds an
increased cost due to the fees and added cost of legal maneuvers and ruses
(heelah) used to make the existing riba-based contracts compliant—at least
in form—with Shari’aa. Professor Elgamal complains bitterly about the
added cost and sophisticated structures that have been used with one benefit
in mind—keeping the form intact without trying to preserve the spirit and
intent of the riba-free value system. As a matter of fact, legal fees may have
been very high for the first few deals, but as the contracts were standardized
and used in a large number of transactions, the costs became much lower. It
is believed that the concern should not only be about the cost, but about the
real economic benefits of going through the many sophisticated ruses, decep-
tive tricks, and special-purpose limited liability companies (LLC) that have
no economic or even structural or legal benefit except to make things look
Shari’aa compliant. It is the responsibility of the academics to reveal, through
dedicated and thorough research, the real benefit of the RF system to rescue
all people from a lifestyle that may mean a bleak future for all of us. We need
to focus on the spirit and intent of the RF value system.
Politicians The attitude of political leaders toward Islamic banking varies
depending on the country, the region, and the political orientation of the
leader. In many of the Arabic-speaking Middle Eastern countries, Islamic
banking has been a big challenge to many of the politicians. Some are afraid
of giving the Islamic political groups or political parties added legitimacy
and power that may undermine their ability to rule. Others have resorted to
allowing it as an expedient political solution, but with many limitations and
restrictions. Other politicians in the West have been sensitized by politically
motivated lobbyists who are interested in casting the Muslims as terrorists
and disloyal. Another concern has been the creation of a back door to im-
plement the Law (Shari’aa), which is frequently criticized as being back-
ward and medieval. In the oil-rich Gulf countries and in some Asian
countries (Malaysia, Indonesia, Pakistan, and Bangladesh, for example),
238 THE ART OF ISLAMIC BANKING AND FINANCE