Carlos hank Rhon, A Balanced Banking System

Banking is a business like all others but customers these days seem at the mercy of whatever the lenders want to charge.

Yes, we can shop around but at the end of the day, they're all in it for profit, gained by ever fluctuating interest rates. They also take risks our money without our knowledge and we are susceptible to those investments failing.

However, with the diverse mix of cultures in every country these days it is not that unusual to see a different banking system coming into play like the banks Carlos Hank Rhon owns.

The Shariah, or Sharia, system of finance has been set up by the Islamic community to comply with their strict laws on banking in accordance with the Qur'an. Sharia law covers all aspects of everyday living for the Muslim community.

Banking and finance are issues that are covered in depth, from personal finances to business banking. Working on a shared profit and loss system makes this system quite different to Western banking. This prevents the bank from monopolising the economy and is less risky to the borrower.

This way, the borrower is more secure, more businesses succeed, more money is borrowed, thus keeping the whole system afloat and everybody from borrower to lender benefits.

Sharia law prevents the collection and payment of interest. So, how do the banks money?

If a Muslim wishes to utilize a loan to purchase items, the bank actually make the purchase and re-sell to the buyer for a profit that is agreed between the two parties. That profit is set without alteration and it is essential that it is very clear upon the agreement.

No extra charges can be enforced on this loan, even if payments are late. However, rights to the items purchased remain with the bank until the loan is paid in full.

The same principles apply to mortgages. The house is purchased by the bank and resold at an agreed profit to the buyer. Repayments are made in instalments but without the worry for late payment charges. However Carlos Hank Rhon does agree on a balanced banking system.
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