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Heaven's Bankers: Inside the Hidden World of Islamic Finance
A trillion dollar financial industry is revolutionising the global economy. Governments and corporations across the Islamic world are increasingly turning to finance that complies with Sharia law in order to fund economic growth. Even in the West, Islamic finance is rapidly becoming an important alternative source of funding at a time when the conventional finance industry is reeling from the effects of the financial crisis.
From its origins in the seventh century, Islamic finance has sought to develop core ethical principles that are based in the foundations of Islam and Shari’a. By engaging critically with the complexities of international finance, it has evolved and adapted into a world emerging from the economic and moral aftermath of a global financial crisis. But with an increasing Western interest, is it able to remain true to the principles of its faith? Can it maintain its ideals of social justice? Or is Islamic finance guilty of the very dangers it seeks to avoid?
In Heaven’s Bankers, Harris Irfan, one of the world’s leading Islamic finance bankers, gives unparalleled insight into the heart of this secretive industry. From his personal experience of working with leading bankers, scholars and lawyers, he debunks the myths of Islamic banking, analyses its greatest deals and looks to the future of a system that has reprioritised the very nature of money itself.
From its origins in the seventh century, Islamic finance has sought to develop core ethical principles that are based in the foundations of Islam and Shari’a. By engaging critically with the complexities of international finance, it has evolved and adapted into a world emerging from the economic and moral aftermath of a global financial crisis. But with an increasing Western interest, is it able to remain true to the principles of its faith? Can it maintain its ideals of social justice? Or is Islamic finance guilty of the very dangers it seeks to avoid?
In Heaven’s Bankers, Harris Irfan, one of the world’s leading Islamic finance bankers, gives unparalleled insight into the heart of this secretive industry. From his personal experience of working with leading bankers, scholars and lawyers, he debunks the myths of Islamic banking, analyses its greatest deals and looks to the future of a system that has reprioritised the very nature of money itself.
368 pages, Kindle Edition
First published July 24, 2014
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September 12, 2021
Although a little dated by now (written in 2014), Heaven's Bankers is a very accessible overview of the principles behind Islamic Finance and perhaps more compellingly the fight between the soul behind these principles versus the enormous pressures to push Islamic finance to form over substance--to find ways to make Islamic finance functionally indistinguishable from conventional heavily debt oriented global finance. Along the way, Irfan shows how in fact the initial structures in Judaism and Christianity against usury and excessive debt were progressively undermined by the same forces (greed and collaboration between secular governments and the captains of the financial industry) that were--as of the book's end--gnawing away at Islamic finance in the mid 2010's.
In essence, ethical finance should maintain a link between the financing of a transaction and the transaction itself. Buying sacks of coffee, then subsequently selling the coffee--for example--is a perfectly fine way to use money. However, contracts to supply money in the future--without any underlying direct connection to "real economy" transactions--introduce gambling/speculation, as well as the capacity to take advantage of people or businesses with less understanding of the risks of the transaction than the seller/provider of these contracts. Think Deutsche Bank or Goldman Sachs during the 2008 meltdown selling CDOs in subprime pools to treasurers of small pension funds in northern Norway. If the parties are clear about what the money is going to be used for, then the assessment of the risks involved are clearer, as is the alignment of interests of the participating parties. This is really the principal behind private equity, partnerships or SME finance--relationships matter and everyone knows what the idea is behind how the financing would help to generate wealth.
However, SMEs and partnership transactions more generally take a lot of time and are difficult to "scale". Those who control large amounts of money are looking for easier ways to have that money "work" for them. So they seek to aggregate pools of financing and "wholesale" structures which inevitably become separated from the underlying transactions fed by such pools of financing. Derivatives and the trading of indices come about, with those who are especially risk loving using leverage at the margin to buy such assets. All too regularly, we see meltdowns like 2008/Lehman Brothers; booms and busts; Madoff schemes and Enrons.
Irfan argues persuasively and through the words of academic and religious experts that the "system" is stacked against "ethical" finance, like Islamic finance. Why?
1) Distortion by tax laws around the conventional/secular world--which permit the deduction by corporations of interest against their taxes. By contrast, corporations have to pay tax on the income out of which they can pay their partners dividends and even after paying such taxes, the recipients of such dividends have to pay taxes as well--a double taxation. This also holds true for capital gains;
2) the fractional reserve system--which allows banks to "create" money on the supposition that their loan book is more liquid and less risky than partnership or equity interests. Thus as every first year economics student will know, the banks can on-lend roughly 95% of the deposits they take, and on and on goes this lending until the central bank either increases the percentage allowable (slowing down the pace at which money is "created" by the banks) or until a bust occurs--like 2008; and, as a corollary to how much larger such on lending makes outstanding debt levels:
3) the political system tends to bail out banks and large debt defaults, but not so with individual equity investments or even the stock market. No matter how irresponsible the bankers are in "creating" assets with borrowed money, the very scale of the banks and the debt outstanding means that in effect the system is "too large to fail"--such that the governments of the conventional developed world will bail out these banks once a bust occurs. Thus, albeit not without some drama, there is an asymmetric risk/return picture at play with debt versus equity investments. The taxpayer will be called upon to bail out such excesses, and almost without exception, no banker will be put in jail and no banker will have his or her bonuses or earnings impounded.
Seen against these powerful forces, Irfan shows that the "system" of Islamic finance was pushed to ever more debt like instruments, with Islamic experts induced to pronounce form as adequate for the sharia blessing, rather than to focus on the substance. The wealth of investors especially in the Gulf and elsewhere seeking Islamic finance but with returns at least as comparable as those offered by the conventional finance industry--were fertile grounds for the Barclays and Deutsche Banks of the world to "structure" products that outwardly could be certified by well paid Sharia "experts". Thus the greed of the bankers, the "no trade-offs" mentality of the investors, and the distortions in the world's largest capital markets in favor of debt and interest led to a short term boom and then a bust as well of Islamic finance--especially after the failure of a large facility which Goldman Sachs sought to raise.
I see parallels with the "impact investment" industry--in which I am active. The time it takes to understand a transaction, to get to know the counterparties and to agree upon a way to partner in any given financing transaction bores large investors--who want to "scale" and become the biggest or best known "impact investor." Yet short cuts are dangerous and ultimately expensive. Form cannot always mask the real substance behind the transactions "sold" as compliant.
Irfan winds his book up saying that there is still a chance for ethical investment--and even cites the Church of England's archbishops and the Catholic Church's Pope railing against the corruption of capitalism as practiced in the years surrounding the 2008 collapse. Yet, he also notes that the Church of England pension fund had invested in the egregiously high interest rate payday loan vehicle, Wonga, and the investments made by the Vatican's financial managers provide ample room for doubt of the consistency in the Pope's encyclicals.
Heaven's Bankers is thus a broader tale than Islamic finance and its basic principles--although it does a good job of that. Rather, it asks whether and how humans can focus on win/win economic growth and what the financing behind such growth should look like--versus the ancient sinful nature of man--greed, pride and the willingness to exploit the vulnerable. I very much root for the results Irfan advocates, but suspect he might be a little doubtful himself on the outcome.
In essence, ethical finance should maintain a link between the financing of a transaction and the transaction itself. Buying sacks of coffee, then subsequently selling the coffee--for example--is a perfectly fine way to use money. However, contracts to supply money in the future--without any underlying direct connection to "real economy" transactions--introduce gambling/speculation, as well as the capacity to take advantage of people or businesses with less understanding of the risks of the transaction than the seller/provider of these contracts. Think Deutsche Bank or Goldman Sachs during the 2008 meltdown selling CDOs in subprime pools to treasurers of small pension funds in northern Norway. If the parties are clear about what the money is going to be used for, then the assessment of the risks involved are clearer, as is the alignment of interests of the participating parties. This is really the principal behind private equity, partnerships or SME finance--relationships matter and everyone knows what the idea is behind how the financing would help to generate wealth.
However, SMEs and partnership transactions more generally take a lot of time and are difficult to "scale". Those who control large amounts of money are looking for easier ways to have that money "work" for them. So they seek to aggregate pools of financing and "wholesale" structures which inevitably become separated from the underlying transactions fed by such pools of financing. Derivatives and the trading of indices come about, with those who are especially risk loving using leverage at the margin to buy such assets. All too regularly, we see meltdowns like 2008/Lehman Brothers; booms and busts; Madoff schemes and Enrons.
Irfan argues persuasively and through the words of academic and religious experts that the "system" is stacked against "ethical" finance, like Islamic finance. Why?
1) Distortion by tax laws around the conventional/secular world--which permit the deduction by corporations of interest against their taxes. By contrast, corporations have to pay tax on the income out of which they can pay their partners dividends and even after paying such taxes, the recipients of such dividends have to pay taxes as well--a double taxation. This also holds true for capital gains;
2) the fractional reserve system--which allows banks to "create" money on the supposition that their loan book is more liquid and less risky than partnership or equity interests. Thus as every first year economics student will know, the banks can on-lend roughly 95% of the deposits they take, and on and on goes this lending until the central bank either increases the percentage allowable (slowing down the pace at which money is "created" by the banks) or until a bust occurs--like 2008; and, as a corollary to how much larger such on lending makes outstanding debt levels:
3) the political system tends to bail out banks and large debt defaults, but not so with individual equity investments or even the stock market. No matter how irresponsible the bankers are in "creating" assets with borrowed money, the very scale of the banks and the debt outstanding means that in effect the system is "too large to fail"--such that the governments of the conventional developed world will bail out these banks once a bust occurs. Thus, albeit not without some drama, there is an asymmetric risk/return picture at play with debt versus equity investments. The taxpayer will be called upon to bail out such excesses, and almost without exception, no banker will be put in jail and no banker will have his or her bonuses or earnings impounded.
Seen against these powerful forces, Irfan shows that the "system" of Islamic finance was pushed to ever more debt like instruments, with Islamic experts induced to pronounce form as adequate for the sharia blessing, rather than to focus on the substance. The wealth of investors especially in the Gulf and elsewhere seeking Islamic finance but with returns at least as comparable as those offered by the conventional finance industry--were fertile grounds for the Barclays and Deutsche Banks of the world to "structure" products that outwardly could be certified by well paid Sharia "experts". Thus the greed of the bankers, the "no trade-offs" mentality of the investors, and the distortions in the world's largest capital markets in favor of debt and interest led to a short term boom and then a bust as well of Islamic finance--especially after the failure of a large facility which Goldman Sachs sought to raise.
I see parallels with the "impact investment" industry--in which I am active. The time it takes to understand a transaction, to get to know the counterparties and to agree upon a way to partner in any given financing transaction bores large investors--who want to "scale" and become the biggest or best known "impact investor." Yet short cuts are dangerous and ultimately expensive. Form cannot always mask the real substance behind the transactions "sold" as compliant.
Irfan winds his book up saying that there is still a chance for ethical investment--and even cites the Church of England's archbishops and the Catholic Church's Pope railing against the corruption of capitalism as practiced in the years surrounding the 2008 collapse. Yet, he also notes that the Church of England pension fund had invested in the egregiously high interest rate payday loan vehicle, Wonga, and the investments made by the Vatican's financial managers provide ample room for doubt of the consistency in the Pope's encyclicals.
Heaven's Bankers is thus a broader tale than Islamic finance and its basic principles--although it does a good job of that. Rather, it asks whether and how humans can focus on win/win economic growth and what the financing behind such growth should look like--versus the ancient sinful nature of man--greed, pride and the willingness to exploit the vulnerable. I very much root for the results Irfan advocates, but suspect he might be a little doubtful himself on the outcome.
May 5, 2021
While this book wasn't the tell-all memoir I expected, it was still very informational and quite nuanced. The author delves deep within the realm of Islamic finance in the days leading up to the sub-prime mortgage crisis. Along the way, we learn the details of what really caused the collapse of some of America's biggest lenders. A word of warning though; this book is heavy on technical terms, so if that's not your thing, don't read it. Otherwise, I found the book to be very tastefully written.
February 16, 2021
8/10
Who this book is for: Someone with a base knowledge of finance banking terminology who wants to know what Islamic Banking is about, its core value, briefly where it originated from and islamic products that have been implemented for large scale projects in today's world.
3 Things I learnt:
- Islamic banking is more than just "no interest". Ethical finance stems from the Muslim's belief that life is temporary and all with beheld accountable for every penny which has passed through their hands.
- Opposite to what I had assumed, Islamic banking wasn't something which was and had always been practiced since the time of sahabah. It was diluted through the centuries and civilizations and is something that is relatively emerging back in 20th century.
- Banking is a huge collection of services behind what retail offers to the every day consumer. There are products suited for high profile investors with lot of money, organizations wishing to redevelop a plot of land etc., it made me realize that all these large scale projects around us has been enabled though financial products that were built by teams of bankers (sales, lawyers, analysists, brokers etc.). At the same time, it is a lucrative industry and can be a very dirty trade.
- You can buy and sell other people's debt. You can buy insurance on another entity's downfall. - - - Governments are encouraging consuming and selling what one does not own and loans + interests by buying out countless number of banks and lenders who have gone bust simply because their collapse would end in a international economical meltdown.
Thoroughly enjoyed this book! Absolutely loved the authors descriptive writing. He does get very technical at times and because I jumped into this without actually any prior knowledge about banking (ie. what terms like hedgefund / short selling etc meant) I did feel lost sometimes which is not the fault of the author. I think this piece did a great job in simplifying a world that benefits from the ignorance of every day people like myself.
Who this book is for: Someone with a base knowledge of finance banking terminology who wants to know what Islamic Banking is about, its core value, briefly where it originated from and islamic products that have been implemented for large scale projects in today's world.
3 Things I learnt:
- Islamic banking is more than just "no interest". Ethical finance stems from the Muslim's belief that life is temporary and all with beheld accountable for every penny which has passed through their hands.
- Opposite to what I had assumed, Islamic banking wasn't something which was and had always been practiced since the time of sahabah. It was diluted through the centuries and civilizations and is something that is relatively emerging back in 20th century.
- Banking is a huge collection of services behind what retail offers to the every day consumer. There are products suited for high profile investors with lot of money, organizations wishing to redevelop a plot of land etc., it made me realize that all these large scale projects around us has been enabled though financial products that were built by teams of bankers (sales, lawyers, analysists, brokers etc.). At the same time, it is a lucrative industry and can be a very dirty trade.
- You can buy and sell other people's debt. You can buy insurance on another entity's downfall. - - - Governments are encouraging consuming and selling what one does not own and loans + interests by buying out countless number of banks and lenders who have gone bust simply because their collapse would end in a international economical meltdown.
Thoroughly enjoyed this book! Absolutely loved the authors descriptive writing. He does get very technical at times and because I jumped into this without actually any prior knowledge about banking (ie. what terms like hedgefund / short selling etc meant) I did feel lost sometimes which is not the fault of the author. I think this piece did a great job in simplifying a world that benefits from the ignorance of every day people like myself.
November 24, 2018
This was an interesting book, but I'm not sure who the target audience is. At some points it gets too technical and will perhaps stop the average reader from continuing. It may have been better served by appendices that talked about specific complex issues in detail for readers who want the inside and out of a highly complex financial instrument.
That aside, this is a a great and easy-ish read. In terms of content and freshness -- it's right up. Not many people are writing about Islamic finance and their story of being in the middle of its growth.
Further, the pragmatism of the author is noted and appreciated -- you can see the nuance in his thought and it helps you better understand the situations in general.
At its core he suggests that ethnical banking would benefit us all and points at the many things that Islamic finance have to offer... If done properly, and perhaps that is the most important aspect of this book.
All in all, very interesting read and not too long - learn more about the financial crisis and how some people believe it could be avoided in the future - with Islamic finance.
That aside, this is a a great and easy-ish read. In terms of content and freshness -- it's right up. Not many people are writing about Islamic finance and their story of being in the middle of its growth.
Further, the pragmatism of the author is noted and appreciated -- you can see the nuance in his thought and it helps you better understand the situations in general.
At its core he suggests that ethnical banking would benefit us all and points at the many things that Islamic finance have to offer... If done properly, and perhaps that is the most important aspect of this book.
All in all, very interesting read and not too long - learn more about the financial crisis and how some people believe it could be avoided in the future - with Islamic finance.
August 2, 2015
I picked up this book having little knowledge of the financial markets and no knowledge of Islamic finance. It turned out to be a surprisingly compelling and thought-provoking read, the author unafraid to delve into some pretty technical explanations but never going so deep as to lose my attention. If you heard the term Islamic finance but wasn't quite sure as to what that meant this is a must read and it will get you to think long and hard about the nature of money as a commodity.
May 1, 2019
A very enlightening book for anyone who want to understand islamic finance. Even though the topic is fairly complicated it is explained with a terminology that anyone can understand. In basic Islamic financing could be the foundation for a far more stable finance sector that we have today. Unfortunately the term "islam" is probably too stigmatised in the west to give this a try though.
August 30, 2015
Marginal at best. A promising subject of which the author is well acquainted but poorly expressed.
dropped
December 13, 2025the opening section was v interesting, i still remember the vivid and exciting descriptions around the financing of the luxury clocktower project in Mecca, but then it got uber technical and i just don’t understand finance 🥲 may try again another time
harris irfan is kinda cool tho, still remember his talk about how bitcoin is super compatible to islamic finance principles
harris irfan is kinda cool tho, still remember his talk about how bitcoin is super compatible to islamic finance principles
February 12, 2017
It was not easy to read. At points it got complex, yet Harris Irfan manages to deliver a compelling book, filled with valuable information from a macro and micro perspective. Islam is on one side of the equation and then you have the hardcore world of finances. The result is that, the biggest west banks are trying to tap the billions that belong to muslims worldwide. And here comes the question: is it possible to have fair finances? fair trade among two parties without usury in between? Is it possible to change our perception about money?
Islamic finances might be the solution in times in which the conventional financial industry is feeling the effects of a worldwide crisis.
Islamic finances might be the solution in times in which the conventional financial industry is feeling the effects of a worldwide crisis.
March 15, 2017
I have to admit that this subject is a bit beyond me. It seems to me that ethical Islamic finance and amoral Western finance are simply incompatible. Any attempt to make them work together must be a either hasty hypocritical fudge (from an Islamic point of view) or a risky inefficient waste of time and money (from a Western point of view). Islam and the West see eye to eye on shares, where the shareholder partakes of the company's losses as well as profits. But bonds, insurance and mortgages divorce credit and risk from their underlying real assets and therefore cannot be reconciled with Islam.
This book is about the brave, crafty, greedy men who try to defend the indefensible and make the unworkable work.
This book is about the brave, crafty, greedy men who try to defend the indefensible and make the unworkable work.
November 7, 2021
The book was an interesting read and I must say I have learned a lot. Being someone who’s currently working in the financial industry while at the same time having some background in Fiqh Muamalat due to my background as an Islamic Studies student, I do have questions, and at times, doubts to matters relating to certain financial instruments and their sharia-compliant alternatives. I managed to find clarities to the questions I’ve been having. Besides that, this book also tells a story about the journey undertaken by the author in the Islamic Finance Industry which I think makes the book more interesting to read.
September 25, 2020
While I initially liked this book, by the fourth chapter, the incessant extolling of the subject's virtues got tiresome. Would have been great if it was a more balanced objective study of the subject.
December 17, 2015
The book could be less than half its length... a tell all kind of book where author needless tries to be philosophical, writing in a meandering style
August 18, 2023
I’ll begin with the title: Heaven’s bankers, inside the hidden world of Islamic finance. The vibes I got were those of the dark faces of Islamic finance and its relation with terrorism. The book is not about that at all. It tells different stories of Islamic banking and finance, all linked in a way or another to the author’s own history. Can it be considered as a history of Islamic finance? I didn’t think so, I think it can be better considered a mix of a memoir and a decade of Islamic finance.
Then, the author: obviously he knows what he is talking about. Islamic finance contracts and structures are smoothly explained, and not doubt he has a knowledge of sharia law. He showcases some humor here and there, and a decent general culture, even though he places lot of these hackneyed Islamic tropes such as: “we gave Europe this and that since a bazillion year! Everything good is originally created by Islam! Even if it happened in a non Muslim land and by non Muslims”. At one point, he even seems to confuse Vatican and the Anglican church.
What about the structure of the book? It is written in 12 chapters, easy to read, and what I really liked is the glossary at the end, with very well written definitions, which makes understanding some concepts easier and could be used as a separate tool as it is.
Now, the substance of the book: The author travels through the history of Islamic finance in the beginning of the 21th century, by focusing on selected cases. He details them, explains them thoroughly and explains why they failed – yes, because most of these examples ended up failing.
In the final chapter, where he reflects about the reasons of the setback of Islamic financing, I couldn’t help but think of the following:
- Apparently, for an authentic Islamic finance to exist, it must be separated from the existing “conventional” banking and finance institutions. Isn’t that a major problem with Islam in general? An incapacity of integrating with others, and always seeking exemptions?
- The author equates ethical financing and Islamic financing, from one side, and from the other, argues that true ethical Islamic financing should follow the spirit rather than the letter of Sharia (actually a very Christian concept). However, Islam is a legalistic religion, and the rules must always be respected. This actually hinders the development of an ethical financing. Little matter the justifications for or against interest rate, interest rate will always be forbidden, even if it could be beneficial for an ethical cause.
- The examples given by the author are all about projects for the wealthy (the Palm project in Dubai, for ex.; the expensive apartments near Mekkah; etc.). In the last chapter, he says his dream is to create a mega Islamic bank targeted at the working class. But this begs the question: if Islamic finance stems from ethical necessities, why didn’t it start with the working class?
At the end, and despite the comments above, i must say I learned a lot from this book, whether from a legal or financial standpoint. It stands as a very interesting introduction to Islamic financing, told through selected projects, with enough details.
Then, the author: obviously he knows what he is talking about. Islamic finance contracts and structures are smoothly explained, and not doubt he has a knowledge of sharia law. He showcases some humor here and there, and a decent general culture, even though he places lot of these hackneyed Islamic tropes such as: “we gave Europe this and that since a bazillion year! Everything good is originally created by Islam! Even if it happened in a non Muslim land and by non Muslims”. At one point, he even seems to confuse Vatican and the Anglican church.
What about the structure of the book? It is written in 12 chapters, easy to read, and what I really liked is the glossary at the end, with very well written definitions, which makes understanding some concepts easier and could be used as a separate tool as it is.
Now, the substance of the book: The author travels through the history of Islamic finance in the beginning of the 21th century, by focusing on selected cases. He details them, explains them thoroughly and explains why they failed – yes, because most of these examples ended up failing.
In the final chapter, where he reflects about the reasons of the setback of Islamic financing, I couldn’t help but think of the following:
- Apparently, for an authentic Islamic finance to exist, it must be separated from the existing “conventional” banking and finance institutions. Isn’t that a major problem with Islam in general? An incapacity of integrating with others, and always seeking exemptions?
- The author equates ethical financing and Islamic financing, from one side, and from the other, argues that true ethical Islamic financing should follow the spirit rather than the letter of Sharia (actually a very Christian concept). However, Islam is a legalistic religion, and the rules must always be respected. This actually hinders the development of an ethical financing. Little matter the justifications for or against interest rate, interest rate will always be forbidden, even if it could be beneficial for an ethical cause.
- The examples given by the author are all about projects for the wealthy (the Palm project in Dubai, for ex.; the expensive apartments near Mekkah; etc.). In the last chapter, he says his dream is to create a mega Islamic bank targeted at the working class. But this begs the question: if Islamic finance stems from ethical necessities, why didn’t it start with the working class?
At the end, and despite the comments above, i must say I learned a lot from this book, whether from a legal or financial standpoint. It stands as a very interesting introduction to Islamic financing, told through selected projects, with enough details.
May 24, 2022
I have got mixed opinion about this one. It is a good book overall, no doubt about that, but let's get bad stuff out of the way first.
There is a lot of stuff, and I mean a lot, which is just way too technical for a layman. And that's despite the fact that in initial pages, author explicitly says that he would not go into technicalities. There are pages and pages of him going over technical details of a how a particular derivative transaction worked. Even as a finance major, I had somewhat difficult time grasping it fully. However, you may simply gloss over those pages tbh and you wouldn't miss out on much. Then there are places where this book directly indicts the capitalism. But then author there just stops after 2,3 sentences and starts making rhetorical statements. Then there is this air of cockiness when talking about Deutsche and this weird obsession with what he calls 'Samadiites'.
Is that to say that this is a bad book? Not at all. In fact, if anyone is even remotely interested in pushing the envelope, this is a must-read, for it sheds light on the actual on-ground realities of the industry, the issue that plagues it, the way it has evolved, the role of Ulemas and scholars, etc. There is a dissonance between the letter and the spirit of Shariah based financing in the industry, but is it the doing of Islamic finance industry or is the fact that in a fractional reserve banking model, which is inherently non-Sharia compliant, it is way too much of an expectation from the industry to break the mold and carve for itself an altogether radical economic framework? Should the industry try to replicate products of its conventional counterparts and just find contractual loopholes to make it Islamic (form over substance)? Why the regulators have similar treatment for conventional and Islamic banks, when underlying fundamental model is different? How far should the doctrine of necessity extend? All of this is discussed in the book. After reading the book, I have a much better understanding of the way things work on ground. Hence, recommended!
There is a lot of stuff, and I mean a lot, which is just way too technical for a layman. And that's despite the fact that in initial pages, author explicitly says that he would not go into technicalities. There are pages and pages of him going over technical details of a how a particular derivative transaction worked. Even as a finance major, I had somewhat difficult time grasping it fully. However, you may simply gloss over those pages tbh and you wouldn't miss out on much. Then there are places where this book directly indicts the capitalism. But then author there just stops after 2,3 sentences and starts making rhetorical statements. Then there is this air of cockiness when talking about Deutsche and this weird obsession with what he calls 'Samadiites'.
Is that to say that this is a bad book? Not at all. In fact, if anyone is even remotely interested in pushing the envelope, this is a must-read, for it sheds light on the actual on-ground realities of the industry, the issue that plagues it, the way it has evolved, the role of Ulemas and scholars, etc. There is a dissonance between the letter and the spirit of Shariah based financing in the industry, but is it the doing of Islamic finance industry or is the fact that in a fractional reserve banking model, which is inherently non-Sharia compliant, it is way too much of an expectation from the industry to break the mold and carve for itself an altogether radical economic framework? Should the industry try to replicate products of its conventional counterparts and just find contractual loopholes to make it Islamic (form over substance)? Why the regulators have similar treatment for conventional and Islamic banks, when underlying fundamental model is different? How far should the doctrine of necessity extend? All of this is discussed in the book. After reading the book, I have a much better understanding of the way things work on ground. Hence, recommended!
October 7, 2024
Great snapshot of modern Islamic Finance
Overall I enjoyed the book. Some of the prose was surprisingly beautiful and clever. It’s an honest snapshot of the current state of affairs in modern Islamic finance. I enjoyed the background story of the financing of the Clock tower in Mecca, and many other big project backstories. I appreciated the feeling of cognitive dissonance that so many in the Islamic finance industry feel regarding the cynicism over “halalness” of some banking products vs optimism to work towards a better solution.
Overall I enjoyed the book. Some of the prose was surprisingly beautiful and clever. It’s an honest snapshot of the current state of affairs in modern Islamic finance. I enjoyed the background story of the financing of the Clock tower in Mecca, and many other big project backstories. I appreciated the feeling of cognitive dissonance that so many in the Islamic finance industry feel regarding the cynicism over “halalness” of some banking products vs optimism to work towards a better solution.
February 29, 2024
In and off itself, IF is truly about human nature. Something can be so perfect yet tainted by human nature. It’s common knowledge mankind is the custodian of wealth. Contentment, transparency and balance is what it prescribes. Crazy even Goldman Sachs tried to find God. Truly we’re all attracted to good.
November 27, 2020
Interesting stories on differences of opinion between scholars and how they react. Insider look on how bankers work with scholars and their perception.
Learn to how structure Islamic treasury products.
Learn to how structure Islamic treasury products.
November 23, 2017
Its intentions seems many
Want to read
July 25, 2021This entire review has been hidden because of spoilers.
September 23, 2023
Rich with real-life cases and objective analysis for the industry.
October 28, 2023
Could have been shorter and it’s more niche than the title suggests. Still, a fantastic read I would highly recommend to anyone interested in Islamic Finance.
August 14, 2025
9/10 ⭐️ This is amongst the most important book on Islamic finance. Highly recommended.
Like, highly recommended if you’re into finance and money stuff, but you’re also care much about shariah
Like, highly recommended if you’re into finance and money stuff, but you’re also care much about shariah
June 28, 2024
How is Islamic Finance 'Islamic'? What has happened inside the industry that has led to its boom so much so that Goldman Sachs, the 'hedonistic poster boy of the boom years of investment banking', wants to join in on the party? Are Islamic scholars content with the interest-bearing-like financial instruments that plague the industry in current years?
The book is essentially of three parts:
1) What is Islamic finance?
2) The various breakthroughs and struggles (external and internal) of the Islamic finance industry
3) The Future of Islamic Finance and the author's reflections
I was tempted to give this a 3 instead of a 5. The book starts off easy enough to read; grasping the frameworks of a Shariah-compliant transactions, principles of being a Muslim, getting to know the pioneers of Islamic Finance such as the revered Imam Abu Hanifa was simple enough, but then the book takes a steep upwards turn epistemologically that I became completely lost at some pages. To appreciate Irfan's insight to the fullest, the reader must have prior knowledge of Islamic finance terminologies and technicalities.
Nevertheless, as an accounting student looking into the Islamic Finance industry with hopeful eyes, hopeful that this industry could become an alternative to the unethical interest-infested economy that we are living in today, Irfan has successfully opened my eyes to the various contradictions, ironies, struggles, and the most importantly: potential, of this industry. A potential that could be harnessed in order for whole nations to become pleasing in the sight of God.
With that goal in mind, that is pleasing God, Harris Irfan remarks at the end of his book: "But it might also spawn a new generation of Islamic institutions. One that will allay the fear and guilt of bankers, lawyers and scholars seeking God's pleasure."
The book is essentially of three parts:
1) What is Islamic finance?
2) The various breakthroughs and struggles (external and internal) of the Islamic finance industry
3) The Future of Islamic Finance and the author's reflections
I was tempted to give this a 3 instead of a 5. The book starts off easy enough to read; grasping the frameworks of a Shariah-compliant transactions, principles of being a Muslim, getting to know the pioneers of Islamic Finance such as the revered Imam Abu Hanifa was simple enough, but then the book takes a steep upwards turn epistemologically that I became completely lost at some pages. To appreciate Irfan's insight to the fullest, the reader must have prior knowledge of Islamic finance terminologies and technicalities.
Nevertheless, as an accounting student looking into the Islamic Finance industry with hopeful eyes, hopeful that this industry could become an alternative to the unethical interest-infested economy that we are living in today, Irfan has successfully opened my eyes to the various contradictions, ironies, struggles, and the most importantly: potential, of this industry. A potential that could be harnessed in order for whole nations to become pleasing in the sight of God.
With that goal in mind, that is pleasing God, Harris Irfan remarks at the end of his book: "But it might also spawn a new generation of Islamic institutions. One that will allay the fear and guilt of bankers, lawyers and scholars seeking God's pleasure."
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