with his staff. Episodes like these, which have also been experienced in Egypt,
Turkey, and many other places. We at LARIBA have disciplined our opera-
tions from the time we began in 1987 to go slowly; to have prudent; never to
use faith in our advertising; to learn systems, techniques, and operations from
the pros in conventional banks; to attract professionals to join our team;
never to promise what the return will be, because only God knows the future;
and to always underpromise and overdeliver. These are, in fact, some of the
aspects and character foundations of the Judeo-Christian-Islamic value sys-
tem that make RF banking a uniquely positioned brand name in banking.
In conclusion, we decided to first understand the laws of the land and to
try to apply these laws in the same way that the civil marriage process was
developed in the United States.
MAJOR OBJECTIONS OFSHARI’AA SCHOLARS TO
THE CONVENTIONAL RIBA-BASED FINANCE
CONTRACT
Most modern Islamic finance scholars who reside in some of the Muslim
countries made the following recommendations to change the riba-based
conventional banking system:
&The contract must be changed to fix some of the noncompliant features
it suffers from. The Shari’aa-compliant contract (as ruled by these
scholars) must:
1.Not show the wordinterest. As discussed in Chapter 7, this stands
against Regulation Z (the Truth in Lending regulation). As discussed
in Chapter 9, there is a clear edict (fatwa) from the most senior and
respected scholars which states that if the laws of the land require
using the word interest, then it can be used. This fatwa is conditional
on not using interest—money renting—in the actual process of
financing.
2.Show a buy-sell transaction in which the bank buys the item from the
seller, then sells that item to the buyer. As discussed in Chapter 9 and
in many parts of this book, U.S. banking regulations stipulate that
banks cannot act as buyers of properties. In addition, in most West-
ern systems, any buy-sell transaction triggers a tax event, and the
profits are taxable. In addition, as was concluded in Chapter 9, all
the buy/sell schemes are synthetic in nature and are in fact ruses and
deceptive tricks (heelah) used to get around and circumvent Shari’aa.
3.Late payment fees cannot be applied unless the payments were inten-
tionally made late without an acceptable excuse. These late paymentRF Banking Model for the 21st Century 249