E1BINDEX 10/28/2009 13:23:43 Page 394
Shari’aa-based finance model (Continued)
objections of Shari’aa scholars to
conventional riba-based finance
contract, 249–255
overview, 226, 227
prepayment, 267
prudence of investment, 227, 234, 244,
252, 257, 259, 264, 268, 273, 275,
276
rental value calculation, 259, 263
results, 267, 276, 277, 379
return on capital (RonC), 252, 264–267,
284, 349
servicing of financing, 269–271, 275,
276, 347
versus Shari’aa-compliant model, 254,
263
title to property, 230, 253, 260–262,
268, 275
unique features of LARIBA model, 258,
259
Shari’aa Board of RF bank, 250, 251
Shari’aa Boards of Islamic Banks
appointment of, 78, 79
and approach to establishing Islamic
banks in the West, 246
and cost-plus model, 210
duties, 77, 78
and early Islamic banks, 62, 63, 75, 76
members of, 241
origin of, 61–63
role of, 76, 77, 251
Shari’aa scholars and compliance
committees, use of, in 21st century,
80, 81
and Western regulatory concerns, 79, 80
Shari’aa-compliant banking model, 215–
223, 226, 240, 254, 255, 263.See also
Shari’aa-based finance model
cost-plus model (murabaha), 54–56,
204–212, 222, 247, 268
joint venture (musharaka), 58, 59, 213,
215, 216, 230, 231, 260, 261, 326,
363
lease-to-own (al ijara wal tamaluk or
ijarah wal iqtinaa), 58, 206, 207, 212,
247, 250
versus Shari’aa-based model, 254, 263South Asian diminishing musharaka
Shari’aa-compliant banking model,
215–221, 268
Shari’aa (the Law)
application of, 67–75
business finance, 39–41
circumvention transactions, 210–212,
216, 221, 222, 231, 238, 249, 257,
320
compliance with and compliance with
laws of the land, 9–11, 201, 245–248,
318, 320
Courts of the Law, 221, 222
deceptive business practices (gharar), 43,
44, 47
described, 63, 64
and fair value pricing, 47, 48, 53.See al-
soMark-to-market rule
and giving (zakah), 34–39, 142, 143
good loan (qard hassan), 18, 20, 230,
258, 259
important principles in developing
Shari’aa-based finance model, 228
Judeo-Christian-Islamic law, 16
loans (qard), 18–20, 227, 228, 230, 258
and mark-to-market rule, 53.See also
Mark-to-market rule
nonfungible property, transfer and rent-
ing of, 19
prohibition on charging of riba, 31, 32,
40–42, 61, 105–108.See alsoRiba
renting and leasing, 56–58, 215
and RF financing rules and codes, 21, 31
scholars, 241
Shari’aa Boards of Islamic Banks.See
Shari’aa Boards of Islamic Banks
sources of, 64–66
and use of Special Purpose Vehicles, 56
usury/interest, 19–21
Silver
early currencies, 47
exchange of, 48, 106
as money, 87–89
as reference commodity, 49–50, 56, 106,
108
Singapore Muslim Community (MUIS),
360–363
SmithsonianAgreement, 97394 INDEX