concerns outlined by the audit, list the corrective actions already taken, and
identify specific recommendations, plans, and the expected time of comple-
tion for responding to such recommendations to fix the problems discov-
ered by the audits.
The management response will be sent to the firm that completed the
audit. In addition, the OCC (usually during the exam time) and other re-
lated regulatory bodies, if needed, will be notified by the bank’s chairman
of the board of directors as to the different audit findings, the corrective
actions already taken, and the actions that will be taken, including expected
time of completion.
NOTES
- The founder of the Findley Company was Mr. Gerald Lee Elmer Findley who,
from 1952 to his retirement in the late 1980s, was responsible for chartering
more than 120 banks in California. Gerald and his son Gary have organized
almost 200 banks in their 50 years of business. - The Central Bank of Malaysia (Bank Negara Malaysia) sought the views of
three jurists on the permissibility of establishing a RF Banking window as
an additional but unique service offered by a conventional RIBA bank. The
Shari’aa scholars involved were the late (Almarhoum) Tan Sri Professor
Ahmad Ibrahim and Professor Dr. Mahmoud Saedon Awang Uthman from
the International Islamic University, Malaysia, and Tuan Haji Mohammad
Shahir Ahmad from the Department of Islamic Affairs in the Malaysian
Prime Minister’s Office. These scholars’ view was that ‘‘a conventional
riba-based bank, whose operations are conducted on the basis of interest,
is not prohibitedfrom operating an RF banking window.’’ The conclusion
was based on foundation of Shari’aa. Many jurists and scholars around the
world have concluded that owning and operating a conventional riba-based
bank that offers RF banking products and services, such as lease-to-pur-
chase financing, is not only acceptable but is encouraged (Dr. Saleh Malai-
kah, in a private communication dated May 17, 1999; the opinion is based
on research conducted by Dr. Malaikah). Scholars like Dr. Al-Qari, and
Dr. Abdul-Rahman Serri have concurred with this opinion. This, however,
does not make riba-based finance activities permissible according to Shar-
i’aa. The ownership and operation of a conventional bank by Muslims is
desirable and encouraged if the intention is to offer riba-free products as a
unique service that can compete with the conventional banking products.
The gradual approach with a clear plan will allow riba-free banking prod-
ucts and services to be tested by the consumers who will ultimately make
the final decision about which products and services they like to use.
Starting an RF Bank in the United States 313