The Art of Islamic Banking and Finance: Tools and Techniques for Community-Based Banking

by Yahia Abdul-Rahman

A detailed look at the fast-growing field of Islamic banking and finance The Art of Islamic Banking and Finance is a modern American take on what it means to incorporate Islamic finance principles into everyday banking and investment techniques by introducing a new brand of banking for all people of all faiths: The Riba-Free (RF) banking. The author is considered the father of RF (Islamic) banking in America. He has been a banker and an Imam/scholar for over 40 years in America since 1968. He started the tedious process with a finance company, LARIBA, in Pasadena, California in 1987. This is the first book ever in the field to trace the origins of prohibiting the renting of money at a price called interest rate and over-indulging in debt. The book reviews in great details the theological foundations of prohibiting interest in the Jewish Bible, the Christian Bible, and the Qur'aan. The author then discusses money and how fiat money is created, the role of the Federal Reserve, and the banking system in America. The book also discusses for the first time ever how to include an important aspect of RF (Islamic) finance using commodity indexation and marking the items to be financed to market in order to avoid participating in economic "bubbles." The author discusses how these rules work, how they affect consumer behavior, and how they change the role of the banker/financier. The Art of Islamic Banking and Finance also includes a discussion on the emergence of a culture of RF (Islamic) banking and finance today, which is based on the real Judeo-Christian-Islamic spirit and very effective when compared to twentieth-century models that use financial engineering and structuring techniques to circumvent the Law ( Shari'aa ). The book also includes case studies based on the actual experience of the author and detailed analysis of the superior results realized by applying this new brand of banking to financing.

Genres: Finance

432 pages, Hardcover

First published January 1, 2009

Reviews

[Deniel Floria · Rating 4 out of 5]

Islamic banking and especially the alternative for the "mortgage" in Islamic banking is becoming an increasingly widespread alternative in many Muslim countries. And is also looked at with interest in the West.

It's growing in popularity because in Islam, asking for interest is seen as Haram. So, what they do instead is: the bank buys the house for you, then it sells it to you at the price of the house plus what you would've payed in interest otherwise, and then you take a loan at 0% interest at that amount.

It is an interesting alternative in that it leads to a more stable monthly cost for the consumer, rather than being subject to changes in the interest you pay, due to macro-economic circumstances outside of your control. And if central banks keep inflation low and stable, it also creates a more stable and predictable revenue stream for the bank. Making it a good stable investment to have as compensation for the more risky investments in your investment portfolio.

[Ksswift · Rating 5 out of 5]

Excellent book that compares the reality of Islamic finance compared to the reality of US banking and the desired state that Judeo/Christian/Muslim early doctrine about the role of interest and finance should hold. I have learned much from the book.

[Arum]

Walaupun cuma baca awal-awalnya aja saya terharu betapa tulusnya beliau mengusahakan institusi keuangan yang bebas Riba dan pesan beliau untuk generasi penerus. Kemudian saya juga jd lebih paham bahwa ternyata perkembangan Islam maupun ekonomi syariah di berbagai negara berbeda-beda sekali.

[Khaled Fouad · Rating 5 out of 5]

Thorough and informative

Amazing blueprint to establish a socially responsible and riba free financial institution. Touches upon core principles shared in the abrahamic Faiths.