Safdar Alam Profile picture
Islamic finance - FinTech. Ex Global Head Islamic Structuring JPMorgan - Author - CEO @MaydanCapital - UK Board Advisor @WahedInvest - Volunteer @SiyamCapital
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Dec 28, 2021 8 tweets 3 min read

One of the reasons I rally so much against banks (including Islamic banks) is their contribution to credit creation (ie lending).

This is NOT an academic topic - it impacts our lives every day.

Why is Riba treated so strongly in our Deen? (banks create over 80% of the money supply via lending - I will explain the importance of this in another thread)

We should understand better what this means for us and our loved ones ...

One of the five main principles (Maqasid) of our Deen is to protect our mental well being
Oct 19, 2021 15 tweets 5 min read
THREAD - How good intentions in Islamic banks always end up with Riba

This is from a written report on the discussion held at the Islamic Economic Forum 2017. The topic is the use of Running Musharakah by Islamic banks in Pakistan. This is deemed a huge success in moving away from interest based Tawarruq to a "real" profit sharing system.…

This is 50 pages long and well worth a read. I will summarise using some key quotes and excerpts.
Oct 18, 2021 10 tweets 17 min read
@khalidibnzayd @financepapi__ @Tobeech @Cirka96 @endzChancellor @ybees3 @IFguru OK - there is no doubt that Islamic mortgages offered by banks are pure interest-based loan products. The trick here is to wrap this loan and make it look like something halal - a regular buying and selling of property. There are a few steps to this trick. @khalidibnzayd @financepapi__ @Tobeech @Cirka96 @endzChancellor @ybees3 @IFguru What is allowed is genuing trading - buying and selling. Imagine a shop owner selling rugs he has purchased - when he sells them, this is proper trade. He makes profit in return for taking full risk - risk he might not sell at all, or risk the price might fall, risk the rug gets
Jun 30, 2021 13 tweets 2 min read
Short thread

Let me explain why I criticise Islamic banks and banking so strongly.

I do NOT do this to appoint blame, point fingers, put Muslims down or anything like that.

Islamic banks employ 100-200 THOUSAND employees (my own estimates!) We spend on external firms like advising banks, lawyers, auditors, regulators in order to create and produce products 100% based on Riba. We have to spend so much because whereas conventional banks just give a loan - we have to hide this in 20 different contracts and
Jan 1, 2021 6 tweets 1 min read
Muslims, please share 🙏🏼

The scope for modern tech to help Muslims globally is vast.

There is a space in between charitable/deen work and start ups that is larger than everything put together.

If no one is filling this space - then I may give it a shot ... continued Of course my driver is the finance space - but along the way - there will be natural spin offs. Much like the secondary application of tech when they went to the moon.

In the finance space, there is micro credit, agri, insurance, payments, investment etc.
Feb 23, 2020 23 tweets 4 min read
Sila RT


Orang ramai selalu tanya saya, "Adakah trading Forex ni dibenarkan dalam Islam?"

Jadi, saya buat keputusan untuk buat thread bagi menjawab persoalan ini. Image Berdagang (trade) matawang ni secara umumnya dibenarkan. Sebagai cth kalau anda ada RM100k & anda nak gunakannya utk beli duit EURO.

Transaksi sebegini perlulah dilakukan secara "spot" iaitu "diserahkan dari tangan ke tangan", seperti menurut hadis mengenai 6 jenis komoditi).
Feb 21, 2020 17 tweets 4 min read
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Forex trading

I am often asked by Muslims : “Is forex trading permitted?”
So, I decided to write a thread to give my answer.

THREAD Trading in currency is generally seen as permitted. For example, you have £100k and you use it to buy some EUR. This must be done at spot (“hand to hand” as per the famous hadith of the 6 commodities). From there, you can trade as often as you like,
Feb 21, 2020 36 tweets 7 min read
Tolong RT

Sejenis Riba yang penting, dan maknanya.

Riba sebenarnya tak difahami dengan baik dalam undang2 Islam. Kita semua tahu tentang faedah, tetapi terdapat beberapa hadis tentang Riba yang kita gagal fahami dengan baik. Riba ada banyak jenis. Kita secara amnya kenal riba sebagai faedah, atau duit di atas duit. Walau bagaimanapun, satu definisi lain bagi riba ialah Riba al Fadl (riba yang boleh berlaku dalam perdagangan)
Feb 18, 2020 36 tweets 8 min read
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An important type of Riba, and what it means.

Riba is actually not very well understood in Islamic law. We all know about interest, but there are several hadith about Riba which we have failed to understand very well, if at all. Riba has many different types, we mainly know it as interest, or money on money. However, one of the other definitions is that of Riba al Fadl, meaning Riba that can occur in trade.
Feb 16, 2020 7 tweets 3 min read
Thank you @FinPlanKaluAja1 for the question, attached below. When this particular friend asks me, I am obliged to answer :)

This relates to the topic of Islamic bonds (Sukuk) which I explain here:

Now, let's look at this Sukuk issued in Nigeria... Ok, this is an interesting structure for the FGN roads Sukuk.

I believe this is the diagram here below:

I hope you can read it, if not the link is here:…

So, what is going on here?
Feb 16, 2020 5 tweets 2 min read
Ever wondered why house prices are soooo high that we must get bank loans to buy one?

The cause is simple. Let me explain.

First, the money supply in your country is increasing rapidly : this is the money supply growth in Malaysia. This is mainly BANKS creating debts out of thin air. In the UK around 97% of all money supply is created this way. This shows bank home lending in Malaysia.
Feb 15, 2020 21 tweets 6 min read

in islamic finance, as Muslims, it is easy to be offended at the suggestion that some of it might, in fact, be controversial and be breaking Shariah Rules.

However, we must recognise that there is significant amount of disagreement on a scholarly level about this. First of all, the main global body AAOIFI recognises that it is possible to try use contracts that are merely interest-bearing, and they make this warning in their Shariah Standards:
Dec 10, 2019 36 tweets 8 min read
please RT

What happens in a "breakout" during trading activity?

One of the best trading opportunities in trading is to identify a break out and take a position (long or short) that aligns with the break out.

However, this is easier said than done! Here we will talk about what goes in underneath the surface, and then how this can help us identify trading opportunities.

First of all, we have to put ourselves in the position of the party that is manufacturing this break out. Yes, most market movements are controlled,
Dec 8, 2019 21 tweets 6 min read
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How to read markets / charts for trading

Here I want to talk about how to analyse and interpret financial markets. This is mainly based on the wonderful work by Richard Wyckoff (1873-1934). I have always been fascinated by financial markets and how they operate. Some years ago I decided to educate myself on this topic, and I found one great method of explanation that captivated me for two reasons:

1) it accurately explained many or all of the things we observe in
Nov 13, 2019 37 tweets 10 min read
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Goldsmiths, paper money and banking

I want to talk about how paper money was first created, and how this has an impact on Islamic banking The development of money has gone through four major stages
1)Commodity money
This is where something of intrinsic value was used as money. Salt in the Mediterranean region, Silk in China, and of course, gold and silver. In early Islam, gold and silver were used,
Nov 11, 2019 35 tweets 7 min read
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How to fix the problem of Islamic banking?

I write a lot about Islamic banking, both educational and critical analysis. I am often asked:

“How would you fix it?”
“What can we do about it?”

I want to address these points. I have to admit my first reaction is that these are generally pointless questions. Let me explain why.
Ever since I discovered Islamic banking, I have been fortunate enough to devote my career to it.
I worked for large global banks, and I left that industry back in 2011, for
Nov 10, 2019 21 tweets 5 min read
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How Sukuks (Islamic Bonds) break AAOIFI Rules

In this thread () we talked about Sukuk, now we will see how market practice breaks the required Shariah rules. AAOIFI have very clear rules on Sukuk, and some of the key areas were changed in around 2008, after criticism by Justice Taqi Usmani, perhaps the most prominent Islamic finance scholar in the world.

AAOIFI is the world’s leading (and best) maker of Shariah standards for Islamic
Nov 8, 2019 22 tweets 4 min read
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(If anyone wishes to help translate this to BM, please let me know)


INTRODUCTION to Bonds and Sukuk

What are bonds? Bonds are just like loans. Rather than one person giving a loan to another, in bonds we have a large group of investors giving a loan to a company (or to a government).

But there is one key difference between bonds and loans, which I will explain shortly.
Oct 28, 2019 45 tweets 11 min read

Interbank money markets – the trading of money vs the trading of real goods

And how it links with Islamic banking This market is the lifeblood of any major bank. When Lehmanns collapsed, it was the fact that this market closed itself to them that was the final straw. It literally made them insolvent in a matter of hours.
Oct 23, 2019 60 tweets 17 min read
Please do RT thank you 🙏

What Scholars actually ask for Shariah Compliance vs What they should be asking

#islamicbanking #Islamicfinance #Shariah OK, following on from my earlier thread on Murabaha, and how it breaks Shariah laws, and the realisation that scholars and academics and professors actually do not seem to know what market practice is, I decided to write a thread about it.
I will try to explain how and why such
Oct 21, 2019 59 tweets 14 min read

What is Murabaha?

This is the most basic contract in Islamic banking, and if you REALLY understand this, then you WILL understand the vast majority of activity in Islamic banking. If you think you “understand” CM, then please think again.

If you are unable to write a 50,000 word paper covering all the elements of CM (commercial, risk, legal, Shariah, operational, pricing, execution etc) then you probably do NOT understand CM as well as you think you do!