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

Yahia Abdul-Rahman

Jan 2010 · John Wiley & Sons

About this ebook

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.

• Covers a new pioneering model that is based on the Law (Shari'aa) and how it is applied in every transaction from joint ventures and portfolio management to home mortgages and personal financing
• Shows how to incorporate the Law (Shari'aa) into American financing and banking systems
• Points to RF (Islamic) finance and banking as a way to emphasize socially responsible investing

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.

Ratings and reviews

Filled with clever experiments, engaging ideas and Written succinctly with an easy to understand text strongly recommended for all.Dr Yahia review with a solid experience in Islamic Finance and a novel approach in Solving the things bring a lot of insight into the practicalities in Islamic Finance.Real life examples and the successive breakthrough through the implementation in USA would be a big boost and the tough to put down once started reading.

Dr. Rahman has written a book that speaks especially to this moment of recession-ridden history. He describes how we can do banking and financial transactions that are free of usury. He writes, not from a secular point of view (though he has much relevance for the general world of banking) but as a faithful Muslim, but seeking to be true to Jewish and Christian scripture as well. He carefully lays out guidelines that hold to both the spirit and letter of our sacred scripture. And he does it, not just theoretically, but based on some 20 years of banking practice. He has poured out his life building a bridge between the relevance of our holy words and faith, to the banking world that seeks to honor those words. As a united Methodist Christian pastor I am grateful to be reminded of the day when Christianity was more sensitive to the evils of usury. Heeding those scriptural warnings, we would not have gotten ourselves into this Great Recession, fueled by greed, derivatives, and casino risk taking. Dr. Rahman has given us a moral compass, to help us find our way in this financial storm. Find our way back to transactions involving mutual trust and respect, based on things of real value, not false value.

The author has done extensive work and established a commendable institution for helping Americans staty away from usury regardless of faith. His work - both in and out of this book - are to be high commended.

About the author

Dr. Yahia Abdul-Rahman is the CEO and Chairman of the Bank of Whittier, as well as the founder and Chairman of American Finance House: LARIBA, which has offered Islamic finance and banking research and instruments since July 1987. Dr. Yahia has more than forty years of highly diversified experience in the banking and oil and gas industries. His area of expertise lies in international, investment, and Islamic banking, project financing, small- and medium-sized business financing, community banking, bank management, and financial services. Dr. Yahia is the author of many papers on faith-based financing and financial instruments, and he speaks regularly at forums focused on Islamic finance at many universities, including Harvard University and institutions in Egypt, Malaysia, Singapore, Bahrain, Saudi Arabia, Dubai, and Turkey.