Islam has a very specific approach to commercial transactions, the law of contract, interest charges, indeed to the very nature of property. For financial institutions operating in an Islamic environment, or seeking to meet the requirements of communities committed to Islamic law, this poses a variety of problems. This important book investigates how such a challenge can be met in practice. The authors investigate the way Islamic banks work within different economic, financial, social, legal and religious environments. They take the reader through the basic principles involved, the issues that arise, and the difficulties that are often encountered. Drawing on detailed studies of Islamic banking in London, Jordan, Turkey, Malaysia and Pakistan, they provide an understanding of how complex Islamic concepts impact upon the use of financial instruments, commercial priorities and services. Relationships with central banks, comparative analysis of financial statements and the role of Islamic banking in a development context are also covered. ISLAMIC BANKING will be essential reading to all those involved in the setting up and running of Islamic banking units in western countries, and a key resource for students of economics in the international arena.
A comprehensive and fully up-to-date introductory textbook to Islamic finance and banking Islamic finance and banking is being used increasingly globally — especially in the regions of Middle East and North Africa, South East and South Asia. To cater to the need of trained Islamic finance staff, a large number of Educational institutions are beginning to offer courses, majors and minors in Islamic finance and banking. The major challenge faced by these institutions are suitable textbooks for both undergrad and post-grad levels and especially with the relevant instructor resources (PPTs, test bank, practice activities and answer keys). Luckily, Fundamentals of Islamic Finance and Banking is here to cover the most important topics related to Islamic finance and banking (IF&B) that are relevant for students of business, finance and banking. Offers an historical background of Islamic finance Covers the principles of Sharia Law as pertinent to finance and banking Provides in-depth discussion of the six key Islamic banking products: Murabaha, Mudaraba, Musharaka, Ijara, Salam and Istisna Discusses the Islamic insurance (Takaful) Gives an overview of Islamic investment, especially Sukuks Concludes with the global standing of the Islamic Finance and Banking industry Would-be colleges and universities offering this subject as a course within their finance and/or banking program can’t be without this invaluable guide.
This is How Islamic Banking Really Works Volume 2 of the "Islamic Banking in Practice" series covers the broad and subtle subject of Sukuk. In a sector where publications focus on theory and are rarely written by experienced practitioners, the "Islamic Banking in Practice" series concentrates firmly on market practice. Sukuks (sometimes referred to as Islamic versions of bonds) are one of the most visible products in Islamic banking, and their global reach has ensured a rapid growth in issuance. This volume will explain how Sukuks work and why they were created. The reader will be guided in how to structure a Sukuk product from first principles of Islamic commercial law. We will discover how a simple purchase of an asset can evolve into a complex structure to issue a $1bn Sukuk. Most of the different major types of Sukuk in issuance will also be described in detail, such as: Ijara Sukuk Mudarabah Sukuk Wakala Sukuk Musharakah Sukuk Hybrid Sukuk Perpetual Sukuk Project Finance / Istisna Sukuk Murabaha Sukuk Equity-linked or convertible or exchangeable Sukuk This will be reinforced through the presentation and detailed analysis of market transactions by examination of prospectuses that are publicly available. At all stages, the focus will be on the aspects of Sukuk that relate to compliance with the rules of Islamic banking. Areas covered include: the issuance process asset injection pricing and relation to underlying asset price how asset price risk is managed and mitigated Shariah compliance, and how the risk of non-compliance is managed Other relevant areas such as credit rating, defaults and the impact of introducing assets (including the controversial topic of a "true sale") will be covered. The key development in the markets as a consequence of AAOIFI rule changes are analysed. We will see a picture emerge of instruments, and markets, that behave in a manner far removed from the existential nature of the classic contracts that underpin the transactions. REVIEW OF VOLUME 1 "This is a book written by a practitioner in Islamic Finance, Safdar Alam, about what many would consider to be quite a dry topic, that of Islamic Banking. In fact, that is quite simply not the case. This is a book as the author describes it as "A download of what I have done and what I know." From its very outset, this first volume, which tackles money market, FX and other market contracts, gives the view of a pioneer in the industry who was challenged with a blank sheet of paper and asked to create something from the ground up, without any guidance, without a frame of reference and the minimum of support infrastructure. The story that unfolds is very readable. The book captures the imagination vividly of what it was really like in this industry less than 20 years ago, when the pioneering spirit of a few created the global industry that we now see today. This is about as real as it gets because there is a very big difference between creating something yourself and replicating something that has already been created. The author, in both a logical and engaging fashion takes us through this journey and shares his insights "warts and all" of what it took to do the needful. I would consider this book as essential reading for practitioners, students, academics and anyone who shares an interest in finding out how something new is created from the ground up. I, for one, eagerly await the sequel in Volume 2 on Sukuk." By Daud Vicary Abdullah Managing Director of DVA Consulting and former President and CEO of INCEIF The Global University of Islamic Finance
As an emerging global phenomenon, Islamic economics and the financial system has expanded exponentially in recent decades. Many components of the industry are still unknown, but hopefully, the lack of awareness will soon be stilled. The Handbook of Research on Theory and Practice of Global Islamic Finance provides emerging research on the latest global Islamic economic practices. The content within this publication examines risk management, economic justice, and stock market analysis. It is designed for financiers, banking professionals, economists, policymakers, researchers, academicians, and students interested in ideas centered on the development and practice of Islamic finance.
This is how Islamic banking really worksIn a sector where publications focus on theory (and are rarely written by experienced practitioners), the Islamic Banking in Practice series concentrates solely on market practice.The evolution of principles into practice is explained clearly and concisely. How is a simple sale of metal used to deliver a total return swap? The reader is guided, step-by-step, as to how financial institutions create products, while ensuring compliance with Islamic commercial law.Written by a globally recognized practitioner, structuring and transactions are presented and explained in detail, covering:* Structuring* Risk* Pricing* Documentation* ExecutionThe Islamic Banking in Practice series will cover the following areas:Volume 1 - Liquidity and risk managementVolume 2 - SukukVolume 3 - Retail banking, financing and investmentsVolume 4 - A detailed evaluation of the industry
A detailed look at the fast-growing field of Islamic banking and finance The Art of Islamic Banking and Finance is a modern American take on what it means to incorporate Islamic finance principles into everyday banking and investment techniques by introducing a new brand of banking for all people of all faiths: The Riba-Free (RF) banking. The author is considered the father of RF (Islamic) banking in America. He has been a banker and an Imam/scholar for over 40 years in America since 1968. He started the tedious process with a finance company, LARIBA, in Pasadena, California in 1987. This is the first book ever in the field to trace the origins of prohibiting the renting of money at a price called interest rate and over-indulging in debt. The book reviews in great details the theological foundations of prohibiting interest in the Jewish Bible, the Christian Bible, and the Qur'aan. The author then discusses money and how fiat money is created, the role of the Federal Reserve, and the banking system in America. The book also discusses for the first time ever how to include an important aspect of RF (Islamic) finance using commodity indexation and marking the items to be financed to market in order to avoid participating in economic "bubbles." The author discusses how these rules work, how they affect consumer behavior, and how they change the role of the banker/financier. Covers a new pioneering model that is based on the Law (Shari'aa) and how it is applied in every transaction from joint ventures and portfolio management to home mortgages and personal financing Shows how to incorporate the Law (Shari'aa) into American financing and banking systems Points to RF (Islamic) finance and banking as a way to emphasize socially responsible investing The Art of Islamic Banking and Finance also includes a discussion on the emergence of a culture of RF (Islamic) banking and finance today, which is based on the real Judeo-Christian-Islamic spirit and very effective when compared to twentieth-century models that use financial engineering and structuring techniques to circumvent the Law (Shari'aa). The book also includes case studies based on the actual experience of the author and detailed analysis of the superior results realized by applying this new brand of banking to financing.
This is a book for students seeking an introduction to Islamic banking. It covers both the theory and the practice of Islamic banking in enough detail to make it easy to read and interesting. Difficult concepts are clearly explained without being overpowered by mathematics, and it is a one-stop shop for information on Islamic banking. With case studies taken from Islamic to mixed systems the development of Islamic banking is thoroughly explored, with history and analysis complementing the more theoretical issues like the prohibition of interest.
This book provides an overview of the practice of Islamic finance and the historical roots that define its modes of operation. The focus of the book is analytical and forward-looking. It shows that Islamic finance exists mainly as a form of rent-seeking legal-arbitrage. In every aspect of finance - from personal loans to investment banking, and from market structure to corporate governance - Islamic finance aims to replicate in Islamic forms the substantive functions of contemporary financial instruments, markets, and institutions. By attempting to replicate the substance of contemporary financial practice using pre-modern contract forms, Islamic finance has arguably failed to serve the objectives of Islamic law. This book proposes refocusing Islamic finance on substance rather than form. This approach would entail abandoning the paradigm of 'Islamization' of every financial practice. It would also entail reorienting the brand-name of Islamic finance to emphasize issues of community banking, micro-finance, and socially responsible investment.
This book, Introduction to Islamic Banking and Finance: An Economic Analysis, covers the basic principles of Islamic economics and finance. It discusses both the theory of Islamic economics and finance as well as the applications in the design of instruments of finance as well as Islamic financial institutions. The book enables its readers to gain an understanding of the structures and operations of Islamic banking, Islamic capital market investments, risk management, and taxation for Islamic banking contracts.The book sets forth the following objectives:
This work is a practical and commercial guide to the fundamental principles of Islamic finance and their application to Islamic finance transactions. Islamic finance is a rapidly expanding, global industry and this book is designed to provide a practical treatment of the subject. It includes discussion and analysis of the negotiation and structure involved in Islamic finance transactions, with relevant case studies, structure diagrams and precedent material supporting the commentary throughout. An introductory section describes the theoretical background and explains the principles (and their sources) of Islamic law which underpin Islamic finance practices, providing an important backdrop to the work as a whole. The work also considers the role of Shariah supervisory boards, Islamic financial institutions and the relevance of accounting approaches. The work adopts an international perspective to reflect the pan-global nature of the industry and accepted practices, with the aim to bring together different schools of thought applied in international Islamic finance transactions. It also highlights any regional differences in accepted practice by reviewing the position in the Gulf states, Asia, the UK and Europe and the USA. The second part of the book concentrates on Islamic financial law in practice and begins with a section on financial techniques. This section explains the basic requirements for Islamic finance contracts both in terms of the underlying asset types and also both the applicability and acceptability of the underlying asset. There is a full discussion of the various types of contractual models such as Mudaraba (trustee finance), Musharaka (partnership or joint venture), Murabaha (sale of goods), and Sukuk (participation securities: coupons etc). The nascent area of Takaful (insurance) is also covered as are matters specific to the important field of project and asset finance.
