scholarly journals Modified Reverse Salam Product as an Innovative alternative for mobilizing fixed deposits in Jurisdictions with Limited Shariah Compliant Investment Avenues to Promote Financial Inclusion

2019 ◽  
Vol 11 (1) ◽  
Author(s):  
Aishath Muneeza
Keyword(s):  
Social Impact ◽  
Financial Institution ◽  
New Product ◽  
Financial Inclusion ◽  
Islamic Banking ◽  
Exploratory Research ◽  
Discretionary Power ◽  
Banking And Finance ◽  
The World ◽  
Effective Product

Financial inclusion is a mian concern of the contemperory global financial landscape. It is a universal concern that needs adequate and effective solutions. Islamic financial arean is no exception to this. With the fintech solutions available in the market today, innovative ways to provide financial inclusion is needed. However, the most critical challenge in the arena is caused due to limited availability of shariah compliant investment avenues in some of the jurisdictions of the world where Islamic banking and finance has not yet fully taken-off. The main objective of this research is to introduce a universally accepted mechanism using salam, one of the most least used Islamic finance contract in commercial Islamic banking for mobilising fixed deposits which will be ideal to be used in jurisdictions with limited shariah compliant avenues. This is a legal exploratory research that aims to provide an adequate and effective product for the jurisdictions that aspires to have sophisticated fixed return guranteed investment products structured in a shariah compliant manner. Simultaneously, the proposed product in this research will serve the less previlaged community of the society whose commodities can be used as underlying asset in structuring the product. However, this social impact of the product will differ depending on the jurisdiction in which it is applied and the decision of the financial institution in which the product is offered as it is there discretionary power to choose the underlying commodity used in the transaction. Fintech can also be fused with the suggested product and as such, the product can be easily used by the population in physically remote locations in a convenient manner. It is anticipated that this research will assist the jurisdictions in the  world with limited shariah compliant investment products to introduce a new product that will be adequate to fulfill the needs of the customers.

scholarly journals Murābaḥah-Taꜥāwun Financing: An Innovation in Islamic Personal Financing

2019 ◽  
Author(s):  
International Journal of Fiqh and Usul al-Fiqh Studies
Keyword(s):  
Financial Inclusion ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Critical Factors ◽  
Distribution Of Wealth ◽  
Financial Products ◽  
Muslim Countries ◽  
The World ◽  
Financial Contract ◽  
Up Scaling

Entrepreneurs, especially in developing societies, which include many Muslim countries among their fold, face a herculean task in up-scaling their businesses due to a lack of capital to procure relevant assets to grow their businesses. The world Islamic banks’ competitiveness report (2016) identified poor financial inclusion as one of the critical factors responsible for the uneven distribution of wealth in the Muslim world. This study presents the Murābaḥah-Taʻāwun financing product as an innovative addition to the range of financial products available on the Islamic banking shelf to reduce the incidence of poverty. Murābaḥah-Taʻāwun is operationalized where a group of entrepreneurs contribute funds together under a recognized Islamic bank while allowing every partner access to the fund on a rotational basis for the purchase of an asset according to a pre-defined arrangement. The study highlighted the importance of Murābaḥah-Taʻ''āwun as an Islamic financial contract by reviewing relevant extant literature. The proposed product shows that greater financial inclusion can be achieved without recourse to riba and thus will reduce poverty among Muslims.

scholarly journals Towards New Sharia Governance for Islamic Financial Institutions

2021 ◽  
Vol 18 (1) ◽  
pp. 39-58
Author(s):  
Abdulazeem Abozaid
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Financial Institution ◽  
Islamic Banking ◽  
Banking And Finance ◽  
Finance Industry ◽  
Regulatory Authorities ◽  
Governance Model ◽  
Islamic Financial Institutions ◽  
Shariah Governance

Since its inception a few decades ago, the industry of Islamic banking and finance has been regulating itself in terms of Sharia governance. Although some regulatory authorities from within the industry, such as Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and Islamic Financial Services Board (IFSB), the Islamic banking and finance industry remains to a great extent self-regulated. This is because none of the resolutions or the regulatory authorities' standards are binding on the Islamic financial institution except when the institution itself willingly chooses to bind itself by them. Few countries have enforced some Sharia-governance-related regulations on their Islamic banks. However, in most cases, these regulations do not go beyond the requirement to formulate some Sharia controlling bodies, which are practically left to the same operating banks. Furthermore, some of the few existing regulatory authorities' standards and resolutions are conflicted with other resolutions issued by Fiqh academies. The paper addresses those issues by highlighting the shortcomings and then proposing the necessary reforms to help reach effective Shariah governance that would protect the industry from within and help it achieve its goals. The paper concludes by proposing a Shariah governance model that should overcome the challenges addressed in the study.Pada awal berdiri, Lembaga Keuangan Syariah merupakan lembaga keuangan yang menerapkan Hukum Syariah secara mandiri dalam sistem operasionalnya. Ia tidak tunduk pada peraturan lembaga keuangan konvensional, sehingga dapat terus berkomiten dalam menerapkan Hukum Syariah secara benar. Selanjutnya, muncullah beberapa otoritas peraturan yang berasal dari pengembangan Lembaga Keuangan Syariah. Diantaranya adalah Islamic Financial Services Board (IFSB) dan Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). Hal ini tidak menyimpang dari kerangka peraturan Hukum Syariah, sebab standar peraturan dan keputusan yang dikeluarkan ditujukan khusus untuk Lembaga Keuangan Syariah saja. Beberapa Negara telah menerapkan peraturan tata kelola Hukum Syariah pada Bank Syariah mereka. Namun dalam banyak kasus, peraturan yang diterapkan tidak mampu mengontrol Lembaga Keuangan Syariah tersebut secara penuh. Sehingga, secara praktis proses pengawasan diserahkan kepada lembaga keuangan yang beroperasi. Akan tetapi, beberapa standar dan keputusan yang dikeluarkan oleh sebagian pemangku kebijakan bertentangan dengan keputusan yang dikeluarkan oleh beberapa akademi Fiqh. Artikel ini ditulis untuk menyoroti permasalahan yang timbul pada tata kelola Lembaga Keuangan Syariah, khususnya kekurangan yang tampak pada sistem tata kelola. Kemudian, penulis akan mengajukan usulan tentang efektifitas tata kelola Lembaga Keuangan Syariah yang bebas dari permasalahan.

Islamic Financial Inclusion

2020 ◽  
pp. 155-173
Author(s):  
S. M. Sohrab Uddin ◽  
Mohammad Zoynul Abedin ◽  
Nahid Afroz
Keyword(s):  
Banking Sector ◽  
Financial Inclusion ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Policy Makers ◽  
Muslim Population ◽  
Muslim Countries ◽  
The World ◽  
Global Concern ◽  
Empirical Contribution

Financial Inclusion (FI), a global concern of this decade, has been accepted by development agencies, governments, and policymakers as one of the pre-eminent ways to eradicate worldwide poverty and income inequality. Consequently, authorities are looking for possible ways to include the unbanked in formal financial chain. Islamic finance, specifically Islamic banking, with its welfare-oriented principles and unique products, has been able to capture the attention of policy makers. Moreover, a major portion of the Muslim population still exclude themselves from the formal financial chain due to religious prohibition of interest-based transactions for whom Islamic finance is the only way to inclusion. Bangladesh, one of the major Muslim countries in the world, is still to bring one-fourth of its total population under formal financial chain. At this backdrop, this chapter examines the empirical contribution of Islamic banking sector in financial inclusion condition as well as development scenario of Bangladesh.

scholarly journals Halal Money: Financial inclusion and demand for Islamic banking in Norway

2018 ◽  
Vol 5 (1) ◽  
pp. 205316801875762 ◽  
Author(s):  
Torkel Brekke
Keyword(s):  
World Bank ◽  
Research Program ◽  
Financial Inclusion ◽  
Islamic Banking ◽  
The West ◽  
Level Of Education ◽  
The World Bank ◽  
Financial Exclusion ◽  
The World ◽  
Muslims In The West

Financial inclusion is high on the agenda for governments as well as for organizations such as the World Bank. Research has pointed out that Muslims worldwide are less included in the formal financial system than non-Muslims, but there is no knowledge about the extent to which religious norms (most importantly the ban on interest on money) lead to financial exclusion among Muslims in the West. In this article I approach the issue of financial exclusion and inclusion through three interrelated questions that will be answered with data collected in Norway 2015 and 2016. The questions are: (a) To what extent do Muslims see conventional banking as a problem in their own lives? (b) Do level of education, age, national background or level of religiosity predict demand for Islamic banking? (c) Is demand for Islamic banking changing? This article is a first step in what should be a broader research program to find out whether and how religious norms cause financial exclusion of Muslims in the West.

scholarly journals POSITIONING ISLAMIC LEGAL THEORY IN THE DEVELOPMENT OF ISLAMIC FINANCE

JURISDICTIE ◽  
2019 ◽  
Vol 10 (1) ◽  
pp. 18
Author(s):  
Nuha Qonita
Keyword(s):  
Islamic Law ◽  
Legal Theory ◽  
New Product ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Modern Time ◽  
Islamic Legal Theory ◽  
Islamic Jurisprudence ◽  
The World

<p>Islamic finance continues to grow over the world, the development of technology plays a crucial role to support Islamic finance. The great innovation of technology may come to dig up the potential of Islamic financing, yet digital system needs for sharia compliance, both are in similar needs for sharia overviews regardless different opinions of ijtihad in this modern time. Emphasizing case by case of Islamic finance has been done by the sharia scholars in producing the new product of Islamic banking and financing. The Islamic jurisprudence however should consider the substence and maqasid form of sharia. The objective of this paper is to enlight some vital parts of Islamic legal theory as part of Islamic law in implementing sharia compliance. Furthermore, provide the role of legal system which takes a crucial place in implementing the system, it should be harmonized in the existing condition of Islamic finance. This paper is qualitative methods with deep analysis on Islamic legal theory among muslim scholars.</p>

scholarly journals Islamic banking

2021 ◽  
pp. 275-287
Author(s):  
Christian Castro
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Islamic Law ◽  
Islamic Banking ◽  
Investment Funds ◽  
Banking And Finance ◽  
Financial Products ◽  
The World ◽  
Globalized World ◽  
The U.S

In recent years the rise of Islamic banking has been one of the most important trends in the economic sphere, with an estimated 1.5 billion Muslims in the world, this arena has plenty of room for expansion. Conforming to Shariah (Islamic Law) puts a huge demand among Muslims looking for financial products and services that adhere to their beliefs. If it weren’t for the creation of such alter-natives to conventional banking and finance, Muslims would find it hard to participate in our globalized world without violating their religious principles. There are currently over 300 financial Institutions across the global sphere providing some type of Islamic financial product. According to some experts, the assets that are currently being managed under Shariah law, which range from investment to commercial banks and investment funds, are estimated to be no less than 300 billion. Other experts in the industry estimate the assets under mana-gement to be much larger. The FSA (Financial Services Authority), a regulator for financial services based out of London, estimates the total amount associated with Shariah banking to be as much as 500 billion. Even the U.S rating agency, S & P, estimates the sukuk (deed) market has reached over 75 billion and will likely be over 150 billion by the end of the decade. It used to be that Islamic fi-nancial products were more of a niche market but over time they are now considered mainstream, with many well-known interna-tional financial institutions battling to get a little piece of the pie.

scholarly journals ISU GLOBAL PEREKONOMIAN ISLAM: Telaah Kritis terhadap Tata Kelola dan Aktivitas Lembaga-lembaga Keuangan Islam

2016 ◽  
Vol 1 (2) ◽  
pp. 111
Author(s):  
Muhdi Kholil
Keyword(s):  
Financial Institutions ◽  
Islamic Finance ◽  
Islamic Banking ◽  
International Forum ◽  
Banking And Finance ◽  
Finance Industry ◽  
Financial Products ◽  
Economic Practice ◽  
The World ◽  
Islamic Economic

<p>Indonesia is to be known widely by the world, which has Islamic finance system different from most countries. Indonesia which is in the international forum of financial syriah known "orthodox" or conservative in the application of Islamic principles recognized the economic practice of Islam which is closer to the economic substance of Islam, and relatively completed all aspects of the economy. Islamic economic development not only in the sectors has been developed such as banking, capital markets and non-bank financial institutions other, but also in extended development of the microfinance sector,  social and financial practices of real business to meet Islamic principles.</p><p>The composition and transaction of Islamic financial products’ Indonesia is a fact that is not owned by other countries which are also developing Islamic banking and finance industry. No wonder, since the majority of developing countries in the world of sharia finance industry with the approach of imitation (mimicry) with conventional, and many experts doubt the originality/economic system of Islamic finance, both conventional and expert on Islamic scholars. But on many opportunities, from seminars, conferences and working group forum, many countries are aware that Indonesia has a different form of sharia industry, the application of Islamic finance that has another color.</p><p>Keyword: Economics, Sharia, Indonesia.</p>

Islamic Banking and Finance in India: A Kosher or Myth

2015 ◽  
Vol 1 (1) ◽  
pp. 01
Author(s):  
Aisha Badruddin
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Islamic Finance ◽  
Islamic Banking ◽  
South East Asia ◽  
Conventional System ◽  
Muslim Community ◽  
Banking And Finance ◽  
The World ◽  
The Global Financial Crisis

Islamic banking seems to be an unfamiliar concept in Indian economy. Besides having a huge potential, Islamic finance is considered to be infeasible and impractical in Indian conventional system of banking. The search for alternatives to conventional banking in the aftermath of the global financial crisis trained the spotlights on Islamic banking in many parts of the world. Today that Islamic banking has unfortunately been misunderstood in India as a religious charitable venture restricted to the country’s Muslim community. Despite its striking growth in other parts of world such as the Middle East, South East Asia (which chiefly include Malaysia and Indonesia) and Europe, it is yet to be positioned as a realistic alternative financial system and not a religious one. In this paper, an attempt is made to understand the underlying concept of Islamic banking and finance and erode some of the major misconceptions in the same context.

scholarly journals Challenges of Introducing Islamic Banking to the Global Financial Market

2018 ◽  
Vol 8 (3) ◽  
pp. 243
Author(s):  
Tahmoures A. Afshar ◽  
Majed R. Muhtaseb
Keyword(s):  
Financial Markets ◽  
International Monetary Fund ◽  
Financial Market ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Banking And Finance ◽  
The World ◽  
The International Monetary Fund ◽  
The Imf

In November 2015, the International Monetary Fund (IMF) decided to add Islamic finance to its monitoring of financial sectors around the world. The IMF traditionally has focused on conventional banking but recently it has become interested in Islamic banking and finance due to its phenomenal growth. Islamic banking assets exceed $2 trillion globally. This decision of the IMF has brought tremendous opportunity for Islamic banking constituents all over the world. However, many practitioners and supervisory authorities may not be aware of the fundamental differences between Islamic and conventional banking. This paper attempts to identify the major differences between the Conventional and Islamic Banking, and discuss the challenges of integrating Islamic banking and finance into the global financial markets.

scholarly journals KONSEP MAQASHID SYARIAH DALAM PENGEMBANGAN PRODUK LEMBAGA KEUANGAN ISLAM

2020 ◽  
Vol 2 (2) ◽  
pp. 120-133
Author(s):  
Husni Kamal ◽  
Arinal Rahmati
Keyword(s):  
Product Development ◽  
New Product Development ◽  
Financial Institutions ◽  
Islamic Law ◽  
Financial Institution ◽  
New Product ◽  
Islamic Banking ◽  
Teaching Principles ◽  
Innovative Products

Islamic law has been stipulated by Allah is for human advantage, both in worldly life and in the hereafter. In order to prove that Islamic economics remains relevant whenever and  wherever the objectives of maqashid shariah is needed to be implemented for creating  innovative products. By doing so, shariah financial institutions are able to compete with the conventional,  and at the same time they stay true to Islamic teaching principles. This article aims firstly to examine the concept of maqashid shariah on new product development of Islamic financial institution, and secondly to explore the suitability of shariah banking product with the principles of maqashid shariah. In nature, the purpose of the implementation of Shariah transactional system is for seeking human benefit both in this life and hereafter. Hence, the concept of maqashid shariah should be able to be integrated into Shari’ah banking so that its products can be hopefully broader. In short, through maqashid shariah, it creates   innovative products of shariah financial institutions.   Keyword: Maqashid Shariah, Islamic Financial, Islamic Banking.     Abstrak Setiap hukum yang ditetapkan Allah kepada ummatnya terdapat kemashlahatan baik didunia maupun di akhirat, untuk menjawab bahwa ekonomi Islam sesuai dengan kondisi zaman maka maqashid syariah sangat diperlukan untuk menciptakan produk yang inovatif sehingga lembaga keuangan syariah bisa bersaing dengan produk lembaga keuangan konvensional dan tidak bertentangan dengan prisnsip-prinsip Islam. Artikel ini bertujuan untuk mengkaji konsep maqashid syariah dalam pengembangan  produk lembaga keuangan islam, secara khusus, artikel ini juga melihat kesesuaian produk yang ditawarkan oleh perbankan syariah agar sesuai dengan konsep yang telah dituangkan dalam maqashid syariah, karena pada hakikatnya melakukan transaksi dengan sistem syariah bukan saja mencari keuntungan di dunia saja, namun juga untuk mencapai maslahah dunia akhirat, oleh karena itu, konsep maqashid syariah harus mampu di integrasikan kedalam perbankan syariah agar produk yang dihasilkan tidak kaku dan sempit sehingga terhambat terhadap perkembangan lembaga keuangan syariah. harapannya, dengan memahami konsep maqashid syariah maka diharapkan bisa menciptakan produk-produk inovatif di lembaga keuangan syariah.   Kata kunci: Maqashid Syariah, Keuangan Islam, Bank Syariah

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