The Art of RF (Riba-Free) Islamic Banking and Finance: Tools and Techniques for Community-Based Banking, 2nd Edition

CHAPTER 13 Starting an RF Bank in the United States Acquiring and Restructuring a Troubled Bank and Operating It Riba-Free

INTRODUCTION

This chapter covers the efforts we at LARIBA went through to acquire and operate a full-service national bank in the United States. This chapter is a must for anyone who may be interested in buying and operating a bank in America. It also can serve as a useful stepwise discussion that should benefit those who want to restructure a troubled bank and bring it to a healthy and a profitable condition. Finally, this chapter is important for those who are interested in operating a riba-based bank in America and the West in a riba-free (RF) format without having to go through the lengthy and expensive process of trying to obtain exceptions from the regulators, as was done by other Islamic banks in Europe. As was stated earlier in the book, RF banking is not about changing words and names of products and services, and it is not about using circumventive techniques to make the contracts look “compliant” with the Judeo-Christian-Islamic Shari'aa law.

RF banking is a new brand of banking that applies the spirit and substance of Judeo-Christian-Islamic values. It is about the use of principles that would save the consumer and the businesses from living an extravagant life style on “rented” money, from making an unwise purchase and financing decision and from participating in an economic bubble like that of 2008.

One of the options we considered in 1987 ...