Participants in the Development of Modern RF Banking

It is important to recognize all the wonderful people from different professions, with diversified training in many fields, Muslim and non-Muslim alike, who did and are still doing their best to bring full life back to the “Islamic” RF banking industry. This effort has not been attempted since the nineteenth century, in a world that has seen quantum leaps in the business of riba-based banking and finance since that time.

The following is a listing of the different professionals and customers who have actively and sincerely participated in the development or the use of services of modern Islamic RF banking and finance since it was first conceived in the second half of the twentieth century.

Muslim Puritans

The word puritan is advisedly used here because of its American roots.[1] It was used first in England to describe a group of early American settlers who immigrated to America so that they could apply the true spirit of the Judeo-Christian values as articulated by the Protestant reform leader Martin Luther to their daily lives. The Muslim Puritans emigrated from many Muslim countries around the world to the United States to escape persecution in their own former lands and/or to seek new opportunities in America. It is believed that the first responsibility of the RF banking brand is to help this category of citizens solve the problem of living the American dream without the use of riba/ribit. The challenge that RF bankers have to resolve is how to convince these puritans that an RF banking approach is acceptable, in order to bring them into mainstream America and get them to move out of small apartments they do not own and into a nice home that they do own in a nice neighborhood. This, it is believed, could help them and their families become viable and effective U.S. citizens, because they will get to know their neighbors, send their children to neighborhood schools, and become fully involved in the American way of life. They would eventually transform, becoming owners of a “piece of the rock.” We at LARIBA have had the honor of meeting wonderful professionals who have lived a puritanical life in the United States, without borrowing with riba (interest) or depositing their money in conventional riba-based banks to earn interest on a time certificate of deposit, because they believe that doing so is haram (divinely prohibited). Many of these families lived in humble, crowded apartments for more than 20 years to avoid taking a loan with interest to buy a home. They went on saving as much as they could to pay for their dream home. In fact, when we started LARIBA, some of these wonderful new Americans had saved up to 80 percent of the price of their home and contacted us so they could finance the rest riba free. Because of their meticulous attention to detail regarding the RF models and procedures used, and their commitment to not participate in any religiously prohibited transaction, many of these puritans wanted proof that the techniques used were sanctioned by a fatwa (an edict) from a recognized and trusted scholar or a group of well-placed scholars. We were happy, patient, and delighted to meet that challenge.

To satisfy the needs of these customers, we wanted to expose them to all the edicts and Shari'aa opinions (fatwas) by displaying these fatwas in full on the website. We urged our customers to read these edicts carefully before they decided to use our services. We also made it clear on the website that including these edicts on our website did not mean that these scholars have given us an edict to sanction our own model, and that we shall never use the names of the scholars to sell our products and services. In addition, we made our Shari'aa supervisor available to answer any questions from these customers. The Shari'aa supervisors used to spend approximately 3,000 minutes a month on their mobile phones answering questions about Shari'aa and the details of the LARIBA RF finance model. This strategic decision proved to be an important one, because it made us serve and meet those highly analytical, deeply religious, and intellectual customers who are interested in reading and analyzing. They are disciplined to reach their conclusions on their own, without being influenced by superstar scholars' names or persuasive marketing and advertising. It also was very fortunate that they were so well disciplined because of the highly diverse nature of the many scholars (some of whom are self-appointed), who have opinions that in many cases differ from one scholar to another, depending on their country of origin and the religious subgroup they represent. This situation made us address the customer base in a direct and transparent way.

  • [1] Yahia K. Abdul Rahman and Abdullah S. Tug, “Towards a LARIBA (Islamic) Mortgage Financing in the United States — Providing an Alternative to Traditional Mortgages.” Paper presented at the Islamic Finance Program, Harvard University School of Law, October 9-10, 1998; and Yahia Abdul Rahman, Mike Abdelaaty, and Gary S. Findley, “The Challenge of Offering a LARIBA Financial Services Window in an American Bank.” Research paper presented at the Harvard Islamic Banking Symposium, Harvard University, October 1,1999.
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