November 2014
Intermediate to advanced
544 pages
16h 50m
English
book
The Art of RF (Riba-Free) Islamic Banking and Finance: Tools and Techniques for Community-Based Banking, 2nd Edition
by Yahia Abdul-Rahman
Content preview from The Art of RF (Riba-Free) Islamic Banking and Finance: Tools and Techniques for Community-Based Banking, 2nd Edition
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.
CHAPTER 10 RF (Islamic) Banking in the Twentieth Century
The efforts to start RF (Islamic) banking and finance in the mid-1970s resulted in the development of a major model, which became very popular because it was very close to the conventional riba-based financing model. The model is called the cost-plus (murabaha) model, which, as described in Chapter 3, includes the following steps:
- The finance institution buys the item at the order of the ultimate buyer (who wants to finance it) at a certain price.
- Then the financial institution sells the item back to the ultimate buyer at the original price plus a declared profit element. The profit element usually reflects the accumulated implied interest—called profit—that would accrue over the period of financing.
- The ultimate note signed by the customer includes the total price including the profit. That may impact the credit report of the customer (in the USA) and limit the customer's “borrowing” or financing capacity.
The model focused on the fact that there is a buy/sell transaction and that interest is not charged, as required by the Judeo-Christian-Islamic Shari'aa law. This model was very convenient to the new and emerging RF (Islamic) banking industry, because it was a straightforward application of the interest-based model used in conventional riba-based banks. It was also applied in many of the newly established financial institutions at that time, such as the Kuwait Finance House (KFH), Dubai Islamic Bank, and Dallah Al-Baraka ...
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Read now
Unlock full access
More than 5,000 organizations count on O’Reilly
O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.Julian F.
I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.Addison B.
I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.Amir M.
I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.