MISCONCEPTION AND THE TRUTH ABOUT ISLAMIC BANKING

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Metadata Umbrella for Islamic Banking

Islamic Banking is a subset of the banking business that endorses, promotes and allows entrepreneurship, fairness, equality, risk aversion, risk pooling, service charges, and compensation for inflation. In addition, Islamic Banking prohibits without exception; exorbitant profits (usury), interest (riba) and financing of prohibited goods (haram) such as the production of alcohol, pork, etc. Data Integrity Institute's Goal Today, there are two very opposite, very radical and very wrong stereotypes about Islamic Banking. First, there is widespread belief that Islamic capital is mostly kept outside of the flow of world financial markets and that it represents one of the main sources for financing global terrorism. Second, it is widely believed by Islamic radicals that conventional banking, because of its reliance of interest income that is prohibited in Islam, is a major instrument for exploitation and depletion of the third world. Radical Islam view conventional banking as major source of global poverty and discrimination established and preserved by United States. Consequently, Radical Islam has reached a conclusion that an Islamic Banking is only possible in a society that is fully Islamic. Data Integrity Institute Inc.'s research shows that both views are highly misguided:

First, Islamic Banking does not allow the financing of any prohibited goods and activities (haram). Terrorism and terrorist acts are strictly prohibited by Islam, so Islamic Banking, by definition, cannot be source for financing such harmful (haram) activities. Second, if it is possible to sell halal meat in the many non-Islamic countries, such as Canada and the United States, where halal meat is widely available, there is no reason that Islamic Banking should not be offered to the same Islamic population that purchases that meat. Lets examine the key conditions established for trading halal meat in mostly western, not fully Islamic countries such as Canada and the United States. Naturally, the essential requrement is the full separation of meat processing from the selection of animal for slaughter according to Islamic custom. Each step involved in the processing, packing and selling must be supervised by Islamic authorities. There is no point along the way where halal meat mixes with conventional meat. The Islamic community trusts that in the end it consumes completely halal meat. In addition, society as a whole is not harmed by the trade of halal meat. Even the non-Islamic population can, if it wants to, consume halal meat without any side effects, knowing that it can expect a product of above average quality. There are many parallels between the trade of halal meat and Islamic Banking. A large Islamic population in non-Islamic countries, such as Canada and the United States, cannot participate in most financial transactions simply because the money flows are associated with interest (riba) or with investment into, by Islamic standards, prohibited activities (haram), such as financing the production of alcohol. In addition, in western countries a credit card if frequently used as an identification tool. For example, if you want to subscribe to phone or internet service, or make a hotel reservation, you are required to have a major credit card, even if you want to pay with cash. Just for the sake of the contract, you are required to have a credit card. If you want to practice Islam, you do not want to have a credit card, but to carry out everyday transaction you have to get one. The solution is a banking card that is issued by the Islamic Banking sector. This sector that can be established in any major bank and the card can be recognized as every other major credit card. The same applies for any other banking instrument and transaction. The requirement for establishing Islamic Banking is to fully separate all financial flows, from beginning through to the end of the contract. There must be no mix in portfolio with conventional financing. Islamic Banking must provide full separation and such process (of course not personal banking information) has to by approved and monitored by an Islamic authority. In order to fully separate financial flows for Islamic Banking, all Islamic Banking data must be separated from conventional banking data. This is where Data Integrity Institute's Metadata Umbrella for Islamic Banking comes into play. The technology behind the Metadata Umbrella was initially developed by Data Integrity Institute for Data Overexposure protection from the Sarbanes Oxley legislation. This technology is the natural solution for implementing full separation of Islamic Banking data flows from conventional banking data. Data Integrity Institute's Metadata Umbrella for Islamic Banking allows any major bank in any country to offer Islamic Banking to serve the financial needs of the Islamic population. Data Integrity Institute's Metadata Umbrella for Islamic Banking is a sophisticated metadata

application, built on top of the most advanced ASG Rochade metadata server technology. It enables the full separation of data models for Islamic Banking data transactions, data warehouse, data marts, data reporting and all other information from conventional banking data. Metadata Umbrella The Metadata Umbrella is Data Integrity Institute's metadata application that fully protects data allowing only controlled predefined access. By solving very complex business problems in an elegant way, the Metadata Umbrella by itself justifies investment into a metadata system. Metadata Umbrella for Islamic Banking The Metadata Umbrella for Islamic Banking is Data Integrity Institute's metadata application that allows the implementation of fair banking, Islamic Banking, according high Islamic standards and expectations, either in a separate banking system, or as a subsystem of conventional banking. With a Data Integrity Institute Metadata Umbrella for Islamic Banking it is possible to integrate fully compliant Islamic banking into a modern conventional banking systems and offer banking products and services to the Islamic population and businesses. Subjects in Islamic Banking Abstractly, Islamic Banking is a business between two active sides, a lender (rabul mal) and a borrower (mudarib), with the possible involvement of a third passive party, a safe keeper (al wadiah). The business purpose of Islamic Banking can be mainly commercial, merchant, and development serving public, corporate and individual aggregated sectors. Islamic Banking builds and keeps Reserve and Insurance Funds for loss absorption and loss compensation. Islamic Banking is regulated and monitored by the Treasury and Central Bank (baitul mal) and the Islamic Council. Contracts in Islamic Banking Islamic Banking can operate in Profit and Loss Sharing or NonProfit Sharing mode. Profit and Loss Sharing contracts could be: Partnership (mudaraba) Equity Participation (musharaka) Farming Partnership (muzarah) Orchard Equity Participation (musaqat) Mudaraba Certificates Government Certificates Non-Profit Sharing contracts could be: Cost plus Markup Purchase Sale (murabaha) Deferred Payment (bai - muajjal) Deferred Delivery (bai - salam) Loan with Service Charges

Benevolent Loan (qard hasan) Leasing (ijara) Account Overdraft Safekeeping (al wadiah)