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Islamic Banking LARIBA - A Conceptual Overview

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Islamic_Finance

This research document highlights the key tenets of Islamic banking and finance, discusses ethical challenges as well as explains benefits of promoting Islamic values at work places

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1 ISLAMIC BANKING L A R I B A A COCEPTUAL OVERVIEW Yahya Abdul-Rahman ISLAMIC BANKING & FINANCING MONEY IS NOT A COMMODITY. CREDIT IS A HUMAN RIGHT. COMMUNITY RESOURCES SHOULD BE GATHERED AND PROPERLY USED TO ENHANCE THE ECONOMY OF THE COMMUNITY. CRA
2 ISLAMIC BANKING & FINANCING IT IS NOT MONEY LENDERING. IT BELIEVES IN INVESTING IN & WITH QUALIFIED PEOPLE. CLIENTS ARE KNOWN COMMUNITY MEMBERS. IT IS DESIGNED TO MINIMIZE DEBT THROUGH EQUITY INVESTING & FINANCING. BURDEN OF DEBT IS THE WORST OF ALL BURDENS. ISLAMIC BANKING & FINANCING A TANGIBLE ASSET MUST CHANGE HANDS. THIS INSURES THAT MONEY IS USED FOR A USEFUL AND PRODUCTIVE ECONOMIC ACTIVITY. IT ENCOURAGES MICRO-LENDING IN ORDER TO REACH THE GRASS ROOTS OF THE COMMUNITY.
3 ISLAMIC BANKING & FINANCING BANK & FINANCIAL INSTITUTION STAFF ARE NOT EMPLOYEES BUT HUMBLE SERVANTS OF THE COMMUNITY, AND TRUSTEES ON THE INVESTED ASSETS OF THE COMMUNITY. OVERHEAD COSTS ARE MINIMIZED BECAUSE OF STAFFS LIFE STYLE. ISLAMIC BANKING & FINANCING STAFF IS ENCOURAGED TO BECOME SHAREHOLDERS OF THE INSTITUTION NOT JUST EMPLOYEES. PROHIBITS SPECULATION AND PARTICIPATION IN UNETHICAL ACTIVITIES. IT REQUIRES FULL DISCLOSURE.

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Islamic Banking LARIBA - A Conceptual Overview

  • 1. 1 ISLAMIC BANKING L A R I B A A COCEPTUAL OVERVIEW Yahya Abdul-Rahman ISLAMIC BANKING & FINANCING MONEY IS NOT A COMMODITY. CREDIT IS A HUMAN RIGHT. COMMUNITY RESOURCES SHOULD BE GATHERED AND PROPERLY USED TO ENHANCE THE ECONOMY OF THE COMMUNITY. CRA
  • 2. 2 ISLAMIC BANKING & FINANCING IT IS NOT MONEY LENDERING. IT BELIEVES IN INVESTING IN & WITH QUALIFIED PEOPLE. CLIENTS ARE KNOWN COMMUNITY MEMBERS. IT IS DESIGNED TO MINIMIZE DEBT THROUGH EQUITY INVESTING & FINANCING. BURDEN OF DEBT IS THE WORST OF ALL BURDENS. ISLAMIC BANKING & FINANCING A TANGIBLE ASSET MUST CHANGE HANDS. THIS INSURES THAT MONEY IS USED FOR A USEFUL AND PRODUCTIVE ECONOMIC ACTIVITY. IT ENCOURAGES MICRO-LENDING IN ORDER TO REACH THE GRASS ROOTS OF THE COMMUNITY.
  • 3. 3 ISLAMIC BANKING & FINANCING BANK & FINANCIAL INSTITUTION STAFF ARE NOT EMPLOYEES BUT HUMBLE SERVANTS OF THE COMMUNITY, AND TRUSTEES ON THE INVESTED ASSETS OF THE COMMUNITY. OVERHEAD COSTS ARE MINIMIZED BECAUSE OF STAFFS LIFE STYLE. ISLAMIC BANKING & FINANCING STAFF IS ENCOURAGED TO BECOME SHAREHOLDERS OF THE INSTITUTION NOT JUST EMPLOYEES. PROHIBITS SPECULATION AND PARTICIPATION IN UNETHICAL ACTIVITIES. IT REQUIRES FULL DISCLOSURE.