‘Heaven’s Bankers’ examines imperfect world of modern Islamic finance


God has a problem with interest. That much is clear from the scriptures of almost every major religion on the planet.

Jews, Christians and Hindus have over the centuries made their peace with usury, but many Muslims still have a profound distaste for this bedrock of modern finance.

Over the last few decades an array of clerics, lawyers and bankers have worked hard to reconcile the core principles of Islam with conventional finance to ensure that Muslims can enjoy access to the same services and products as the rest of the world.


They succeeded beyond their wildest dreams. After a difficult start in Egypt and Dubai during the 1960s and 1970s, Islamic finance has exploded into a $2-trillion industry courted by a swelling number of governments — both Muslim and Western.

Britain recently issued its first “Islamic bond” to burnish its credentials as a hub for the industry and will soon be followed by Hong Kong, Luxembourg and South Africa.

In the aptly titled “Heaven’s Bankers: Inside the Hidden World of Islamic Finance,” Harris Irfan weaves together personal anecdotes with explanations of some of the crucial aspects of the subject — and its controversies. It is published by Overlook Books.

Irfan is an able guide. A former member of Deutsche Bank’s team of “rocket scientists,” dispatched to the Persian Gulf to crack this potentially lucrative industry in the early 2000s, he later went on to head Barclays’ Islamic finance business, and now works at a London-based Islamic investment bank.

Islamic finance piques interest far outside its core constituency. Some of the principles that underpin the industry resonate even with secular Westerners — especially those sceptical of some of capitalism’s more extreme vagaries.

The fundamental principles of Islam dictate that interest is haram, or forbidden, and rampant speculation is discouraged. But risk-sharing equity investments based on physical assets are encouraged.


However, as Irfan shows, there is a chasm between the idealized version of Islamic finance that the Koran points toward — and proponents like to wax lyrical about — and the grubbier reality of the modern Islamic finance industry, full of messy, imperfect compromises.

In fact, cynics would conclude that in many respects Islamic finance looks and acts exactly like its conventional counterpart, albeit with a bit of financial engineering to give the products a devout dressing.

The industry likes to argue that Islamic banks are somehow more closely entwined into the “real” economy as opposed to the “financial” one. They require real, physical assets to back all transactions and eschew the socially useless financial wizardry that their conventional counterparts routinely dabble with.

Yet it is hard to fathom how Islamic banks — as they currently operate across the Muslim world — are “better” for the economy and Muslim customers than conventional ones.

Irfan is a pragmatic idealist, always aspiring for the ideal of Islamic finance, but for now willing to accept the blemished reality for the sake of offering devout Muslims the same financial services that others enjoy.

The banker deserves praise for a well-written book. The occasional personal stories and color are a welcome touch that enliven the subject.


Conventional bankers will find it a superb introduction to a fascinating subject. But despite Irfan’s efforts, “Heaven’s Bankers” is fairly inaccessible for anyone without a decent grasp of finance. One suspects that the author’s primary motive for writing it was probably to explore his own mixed emotions about the industry, and to breathe life into the debate over its core purposes. And how better to achieve these aims than by clinging to the spirit of Islamic law rather than its letter.

As he admits in the ultimate chapter, Irfan has had an “existential crisis,” but remains hopeful: “Though I find myself often questioning whether I and my fellow bankers and lawyers should simply give up and devote our energies elsewhere, something tells me that we’ll get there in the end.”

Robin Wigglesworth is a New York-based editor at the Financial Times of London, in which this review first appeared.