Applying this vision based on the analogies and the stepwise approach
described above, we reached the following process as it pertains to RF
financing:
1.The Preparation:This step includes taking an application from the cus-
tomer and processing it by evaluating the customer’s credit scores to
check on his/her credit character profile, to learn where the property is
in order to be ready for an appraisal, and to learn the customer’s finan-
cial details.
2.The Faith-Based Qualification:This step includes the application of the
LARIBA Shari’aa-based RF finance model to decide whether investing
in and buying the property makes economic and prudent sense.
3.The Processing/Underwriting:This step includes the analysis of all the
information gathered, the assembly of all the documents needed, and
the decision as to whether we should join in investing in the property
with the customer.
4.The Documentation:This step includes documenting the agreements
according to the standard and universally used documents that follow
the banking laws and regulations of the United States. To record the pro-
cess we used, we developed what we call the LARIBA Agreement. It is a
rider that is added to the agreements and contracts. It describes in detail
the prohibition of riba, the process that was used, and the U.S. banking
regulatory reasons why the phraseimplied interestwas used.We are aware that others in the field of Shari’aa-compliant ‘‘Islamic
finance’’ in the United States and other parts of the world—in their sincere
attempts to comply with Shari’aa—have used expensive lawyers and costly
and sophisticated structured corporate vehicles for the purpose of ‘‘financial
engineering.’’ We are also aware that others use ruses (heelah, or deceptive
tricks and practices) to make the financing agreement look Shari’aa-compli-
ant on the surface, but when the intent, the fine print, and the methods used
are investigated, one can clearly and readily conclude that the contract is
intended to circumvent the Law (Shari’aa). Based on thorough research in
the original sources, on our consultations with many scholars in Shari’aa
since 1987, and our soul searching, we decided to be fully transparent about
the LARIBA model methods and not tomislead or misrepresent facts by
using ‘‘financial engineering’’ techniques such as the use of a special purpose
vehicle (SPV) as discussed in Chapter 9.
It was also decided never to use the names of the eminent scholars in
Shari’aa for advertising purposes tomake it easy to ‘‘sell’’ our products
and services. We feel that doing so takes away respect and eminence from
those respected scholars and, in fact, is counterproductive, because it is im-
portant that educated and sophisticated users understand the concepts used
RF Banking Model for the 21st Century 257