I had written about bringing interest-free student loans to Canada before. Now its time to make it a reality.
Team RICE, which includes members of the MSA, has been selected as a potential finalist for the RBC Challenge Competition to bring Interest-Free, 100% Islamically Compliant student loans to Canada. This project is endorsed by Dr. Azeemuddin Subhani of Islamic Finance Advisory Board. The proposal summary is available below and on the website link. If this Team is voted in, we might be one step closer to interest-free financial products being offered by mainstream banks in Canada.
Please click here and vote for Team 3. You can vote once every day up to Jan. 21st!
The interest-free Islamic Banking industry is growing at a rate of 20% and is expected to reach $1.4 Trillion by 2010. In order to penetrate this market effectively RBC must come up with an innovative, interest-free product that caters to the spenders of tomorrow. There are approximate 20,000 religious students that would be willing to switch their bank accounts to a bank that offers interest-free loan arrangements. This arrangement can be made feasible and Islamically Compliant if the process was broken up into two transactions: (1) An initial profit-sharing investment by the student (2) Issuance of an interest-free loan that is enabled by the previous investment. In this way, RBC will automatically gain close to 20,000 new accounts. It will gain first-movers advantage, and establish itself as the brand of choice for a rapidly increasing Muslim population.
Dr Azeemuddin Subhani
Dr. Azeemuddin Subhani is currently a member of the Islamic Finance Advisory Board, functions as a Canadian Independent Financial Shari’ah Advisor, with several professional affiliations, Shari’ah-compliance consulting assignments (frontier Alt), speaking engagements at international Islamic Finance conferences (Toronto 2007, IIR Dubai 2008, and Harvard 2008 ) and visiting teaching positions in Islamic Studies including Shari’ah at Canadian universities (Waterloo). His language proficiency includes Arabic and he is currently pursuing the prestigious new professional qualification of “Certified Shari’a Adviser and Auditor” (CSAA) from the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) – the global standard-setting body on Islamic finance products and practices, thus positioning to be the first AAOIFI-certified Shari’a-compliance advisor and auditor in Canada.
Dr. Subhani has the unique distinction of being well versed in Islamic Law as well as in both Western and Islamic Finance, through advanced degrees and long, varied experience. He holds a PhD and an MA in Islamic Law/Islamic Finance (Institute of Islamic Studies, McGill University: 2007, 2001), an MBA and Doctoral Studies in Finance (University of Southern California, 1965), and an MBA in Accounting (IBA Karachi, 1963). His PhD dissertation, “Divine Law of Riba [usury] and Bay’ [exchange]: New Critical Theory,” has officially been recognized by McGill as a “seminal theorization on an important institution of Islamic law,” as it posits a pioneering interpretation of the rationale of the foundational prohibition of riba, with far-reaching conceptual and practical structural implications for the standardization of the emerging Islamic Finance industry.
He brings over four decades professional experience from Pakistan, Saudi Arabia and Canada, covering financial Shari’a consulting in personal/housing finance, mutual funds, hedge funds, and sukuk; university teaching/research; investment banking; project / infrastructure / corporate / government finance; and petro-chemical / oil / gas financial advisory work, including 25 years as Financial Advisor to the Saudi Arabian Government on negotiation and implementation of a variety of ARAMCO and PETROMIN oil & gas agreements (including Concession, Government Participation, Nationalization, Exploration, Production, Pipeline, Refining, Infrastructure, Export, Net-back Pricing, Management Service, Processing, and Petroleum Exchange). His extensive written work on Petroleum Finance and Islamic Finance, including his PhD dissertation, is currently under publication.