scholarly journals The Application of Ju'alah in Islamic Finance: The Malaysian Perspective

2020 ◽  
Vol 7 (1) ◽  
pp. 29-41
Author(s):  
Ismail Mohamed ◽  
Mohd Rafede Mohd ◽  
Aishath Muneeza
Keyword(s):  
Capital Market ◽  
Islamic Finance ◽  
Specific Reference ◽  
Islamic Banking ◽  
Finance Industry ◽  
Potential Applications

Ju’alah is one of the least researched types of Shariah contracts used in Islamic finance. The objective of this paper is to explore the current and potential applications of Ju’alah with specific reference to Malaysian Islamic banking, takaful and the Islamic capital market. This paper establishes that there is potential for using Ju’alah in Islamic finance as a primary and/or secondary contract. It also establishes that Ju’alah can be used in takaful, though it is not being currently used for this in Islamic banking and the Islamic capital market in Malaysia. It is anticipated that the findings of this paper will improve understanding of the practice of Ju’alah in the Malaysian Islamic finance industry.

Bridging Islamic Juristic Differences in Contemporary Islamic Finance

2012 ◽  
Vol 26 (3) ◽  
pp. 313-337
Author(s):  
Younes Soualhi
Keyword(s):  
Dispute Resolution ◽  
Capital Market ◽  
Islamic Law ◽  
Middle Eastern ◽  
East Asian ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Finance Industry ◽  
Inherent Feature

Abstract This article is an attempt to formulate a viable Sharīʿah framework for juristic differences in contemporary Islamic finance. While acknowledging the legitimacy of juristic differences as an inherent feature of Islamic law, such differences could jeopardize a nascent Islamic finance industry, leading to what has come to be arbitrarily termed ‘Sharīʿah risk’ in Islamic finance. Two blocks appear to represent the two disputing sides since the launch of this industry, i.e., the Middle Eastern and South East Asian markets. Thus, this article aims to bridge differences in Islamic finance by proposing a framework and set of parameters that can be applied to all Islamic banking, Islamic capital market and takāful products. Apart from the outlined framework that aims to circumvent juristic disputes, this article concludes that juristic dispute resolution in Islamic finance will not be attainable until one can appreciate the legal and regulatory differences in which Islamic finance operates worldwide.

scholarly journals Potensi Keterdedahan Risiko Syariah Syarikat Pengendali Takaful Terpilih Di Malaysia

2016 ◽  
Vol 3 (2) ◽  
Author(s):  
Mohd Faiz Mohamed Yusof ◽  
Joni Tamkin Borhan ◽  
Nurhanani Romli
Keyword(s):  
Financial Markets ◽  
Capital Market ◽  
Qualitative Methodology ◽  
Qualitative Data ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Financial Industry ◽  
Finance Industry ◽  
Financial Products ◽  
Compliance Requirements

Nowadays, various Islamic financial products have been developed and have grown tremendously in the financial markets, including Islamic equity, Islamic banking and takaful. The Islamic finance industry has its own uniqueness compared to the conventional financial industry due to the Islamic finance industry has a need for Shariah compliance in Islamic finance industry as known as Shariah risk. Globally, Islamic capital market was faced incident of Shariah risk in the end 2007 when Sheikh Taqi Uthmani has declared that 85% of sukuk issuance in the market are non Shariah compliant in the end of 2007 and cause a decrease of sukuk issuance in the following years in 2008. There are also dispute cases in Islamic banking in Malaysia such as issue of contract Bay 'Bithaman Ajil (BBA) is not shariah compliant. The takaful industry in Malaysia is also exposed to Shariah risks due to the shariah compliance requirements in all operations and activities of the takaful operator. Therefore, this study will describe the key elements that results shariah risk in Islamic finance. The research will identified potential of shariah risk using a qualitative methodology based on research data from five informants who were experienced shariah compliance management in takaful operator. This study will analyze qualitative data using a computerized program Altas.ti 7. The study infers that there are potential of Shariah risk and incident of Shariah risk in activities and operation of selected takaful operator in Malaysia.

scholarly journals Analisis Rasch Pada Atribut Perbankan Syariah: Studi pada Generasi Milenial

2019 ◽  
Vol 5 (3) ◽  
pp. 145
Author(s):  
Anggiya Rossana ◽  
Egi Arvian Firmansyah
Keyword(s):  
University Students ◽  
Market Share ◽  
Rasch Analysis ◽  
Primary Data ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Banking Services ◽  
Finance Industry ◽  
Potential Customers

The presence of Islamic banking in Indonesia is one form of progress and development of the Islamic finance industry in Indonesia. However, for more than 20 years, Islamic banking has apparently not been able to grow optimally and experienced a slowdown in its growth. Islamic banks need to increase their market share and also need to identify which attributes are most considered by the potential customers, especially the millennials whose number is large. This study aims to find out which attributes are most considered in using Islamic banking services. This study uses primary data by distributing online questionnaires to 180 university students in Bandung, namely Unpad, ITB and UPI students. To analyze the data, Rasch analysis was used. The results of Rasch analysis show that cleanliness, friendliness, and Islamic principles turned out to be the most considered attributes in selecting Islamic banking in Indonesia. Given that these three attributes are the most considered, it is expected that Islamic banking strengthen these three aspects in order to increase the market of Islamic finance industry markets.

scholarly journals ??? ???? ??????? ??????? ?? ??????? ??????? ??? ??????? ????????? ?? ????????? ??????? ?? ??????: ????? ????? ?????? ?????

2016 ◽  
Vol 1 (2) ◽  
pp. 215
Author(s):  
Hatta Syamsuddin ◽  
Abdul Khaliq Hasan ◽  
Moh Muinudinillah
Keyword(s):  
Supervisory Board ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Finance Industry ◽  
Islamic Jurisprudence ◽  
Banking Business ◽  
Rules And Principles ◽  
Muslim Communities ◽  
Financial Transactions

The emergence of Islamic banking was considered as a response to the desire of Muslim communities to disassociate from usury (riba-based) system. The development of time increasing the diversity of financial transactions, both in trading and banking business, which has no provisions in the old sources of Islamic jurisprudence. This dangerous phenomenon was the reason for the importance of a Sharia Supervisory Board to ensure all of the banking transactions comply with the rules and principles of sharia. This research focused on the role of National Sharia Board and his methodology in the fatwa. This research uses analytical descriptive methodology. The limitations of this research were about: how the National Sharia Board played their roles in Indonesia and how the method applied by the National Sharia Board in issuing a fatwa. The research found that: the National Sharia Board in Indonesia has played their roles, especially in developing Islamic finance industry, ensuring financial and banking transaction comply with the rules and principles of sharia, and providing awareness and guidance to the Muslim communities. The issuing of fatwa on financial transactions was the authority of the National Sharia Board. The National Sharia Board hold on procedures, specific steps, and certain agreed methodology in issuing the fatwa. Nevertheless, there still some fatwas that caused controversy in the Islamic community

scholarly journals Sukuk Default Regulation in Malaysia and United Arab Emirates: Comparative Analysis

2019 ◽  
Author(s):  
International Journal of Fiqh and Usul al-Fiqh Studies
Keyword(s):  
Comparative Analysis ◽  
United Arab Emirates ◽  
Capital Market ◽  
Regulatory Framework ◽  
Court Decision ◽  
Islamic Finance ◽  
Moral Hazards ◽  
Finance Industry ◽  
Market Framework ◽  
The Right

The nascent Islamic finance industry is still facing the challenges of uncertainties in legal regimes, Sharī’ah interpretations, the right of investors, and remedies in default circumstances. The event of Sukūk default is one of the significant challenges faced by the Islamic capital market. The recent Dana Gas Sukūk default triggered by Sharī’ah compliance interpretations has shown the extent of danger that moral hazards could cause to the entire Islamic finance space. Scholars have argued that the Sharī’ah-compliant arguments witnessed in the industry were because of the nature of the capital market framework of any particular jurisdiction and were not significantly Sharī’ah issues. This study aims to carry out a brief comparative analysis of the default cases in Malaysia and the United Arab Emirates (UAE). The study compares the legal jurisdiction and regulatory framework in summary-background of the judges and court decision samples based on these structures and how they have influenced Sukuk default regulations in the jurisdiction. This study employs a comparative analysis by considering fundamental elements in the regulatory framework.

scholarly journals The Role of Musharakah in the Economic Development of Tehsil Dargai, District Malakand, Khyber Pakhtunkhwa, Pakistan

2019 ◽  
Vol 6 ◽  
pp. 80-97
Author(s):  
Suhail Ahmad ◽  
Ejaz Aslam ◽  
Prof. Dr. S. Ghiasul Haq ◽  
Prof. Dr. Mohd Ma'Sum Billah
Keyword(s):  
Response Rate ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Limited Data ◽  
Khyber Pakhtunkhwa ◽  
Banking And Finance ◽  
Finance Industry ◽  
Muslim Countries ◽  
Job Opportunities

Islamic finance industry has been growing for the last twenty years, both in Muslim and non-Muslim countries around the world. There are different modes of Islamic finance which provide job opportunities across the globe. In Pakistan, the contemporaneous growth of Islamic banking and finance is not different from other countries. Islamic banking and finance does not only provide employment for individuals, indeed it also offers various products and services to customers across the country. Musharakah is a form of business in Islamic finance that is being adopted rapidly by most of the customers in Islamic banking and finance institutions. Therefore, the purpose of this study is to examine the role of Islamic finance, mainly how Musharakah is playing its due role in creating employment and maintaining sustainable development projects which in turn are causes of the development of the economy, particularly of Tehsil Dargai. For this purpose, this study collected data through a questionnaire that was randomly distributed among 100 respondents in Tehsil Dargai, District Malakand, Khyber Pakhtunkhwa (KP), Pakistan and the response rate was 60%. We found that Islamic finance is rapidly growing in Dargai; indeed, people are practicing different modes of Islamic finance and Musharakah is the most popular form of Islamic finance in this area. This study utilizes limited data because it was only conducted in Dargai.

scholarly journals Contemporary Challenges Confronting Islamic Banking & Finance

2015 ◽  
Vol 55 ◽  
pp. 86-94
Author(s):  
Muhammad Asif Khan ◽  
Muhammad Waseem Shehzad ◽  
Muhammad Atif Khan
Keyword(s):  
Capital Market ◽  
Regulatory Framework ◽  
Western Society ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Reporting Standards ◽  
Financial Instruments ◽  
Tabular Form ◽  
Banking And Finance

The philosophy of Islamic economics is “brining economics in consonance with Shariah”, guiding Islamic banking and finance to abolish interest from operations, has reported a monumental growth, envisaged the most lucrative and unsusceptible segment of the economy. Islamic finance is undoubtedly flourishing worldwide entails trajectory development but at other front it encounters a number of impediments in development since its inception. The emphasis of this study is to encapsulate in tabular form, the contemporary problems and challenges Islamic finance has encountered during the span of last 28-years from 1988 to 2015. The austere Shariah compliance; regulatory and prudential challenges; misconception among western society about Islamic banking philosophy; unavailability of money and capital market for scant Islamic financial instruments; piercing competition; privation of Islamic banking and finance awareness; absence of uniform reporting standards; complexities of regulatory and supervisory issues; lack of central supervisory body, governance and dearth of consensus among Shariah scholars been the precarious challenges among many others. A unified central regulatory and supervisory mechanism required in converging sprinkled Islamic finance practices and to foster a synchronized and standardized regulatory framework consensus need to be developed among all Shariah scholars

scholarly journals Managing Shariah Non-Compliance Risk via Islamic Dispute Resolution

2019 ◽  
Vol 13 (1) ◽  
pp. 2 ◽  
Author(s):  
Maria Bhatti
Keyword(s):  
Dispute Resolution ◽  
Institutional Arrangements ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Legal Analysis ◽  
Normative Approach ◽  
Banking And Finance ◽  
Finance Industry ◽  
Governance Systems ◽  
Shariah Governance

This article discusses Shariah non-compliance risk as a form of operational risk intending to ensure that operations in the Islamic and banking finance industry comply with Shariah procedures. In the field of Islamic finance, Shariah non-compliance risk refers to the possibility that Islamic finance transactions may be challenged based on Shariah non-compliance. This article uses a comparative and normative approach as well as a legal analysis of the case of Beximco. The article proposes the management of Shariah non-compliance risk by augmenting the effectiveness of Shariah governance systems with Islamic banking and finance arbitration; arbitration should be an enforced part of Islamic finance institutional arrangements—as it always has been classically—to provide flexibility for dispute resolution. To this end, the article examines contemporary implementations of Shariah arbitration rules to assess how Shariah non-compliance risk can be better managed via Islamic dispute resolution procedures.

Sukuk as an Attractive Alternative of Funding and Investment in Tunisia

2015 ◽  
Vol 3 (1) ◽  
pp. 60
Author(s):  
Hajer Chermi ◽  
Yacin Jerbi
Keyword(s):  
Private Sector ◽  
Capital Market ◽  
Government Funding ◽  
Islamic Finance ◽  
Attractive Alternative ◽  
Special Focus ◽  
Financial Instruments ◽  
Key Factors ◽  
Finance Industry ◽  
The Past

During the past decade, the Islamic finance industry has witnessed significant developments, particularly in the field of Sukuk (Islamic bonds). Sukuk represent one of the most successful products in Islamic finance. They have attracted the attention of several investors and become increasingly popular in various markets worldwide. They have gained prominence as financial instruments serving both government funding through the issuance of sovereign sukuk and private sector funding through corporate sukuk. This paper starts by providing a brief overview on the sukuk structuring and on the major developments in the flourishing world Islamic capital market. It then investigates the Malaysian sukuk market, with special focus on the key factors contributing to its successful experience. The paper concludes by explaining the ways through which sukuk represent an attractive alternative of funding and investment for Tunisia, taking into account that Tunisia is preparing for its first issuance of sovereign sukuk in the second term of 2013. The promising potential sukuk is also demonstrated through comparing measures taken by the Tunisian and Malaysian governments. 

An analysis of the normative parameters of reward and risk in Islamic finance

2020 ◽  
Vol 12 (3) ◽  
pp. 303-323
Author(s):  
Mohamed Benaicha
Keyword(s):  
Design Methodology ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Content Type ◽  
Academic Literature ◽  
Finance Industry ◽  
Risk Principle ◽  
Descriptive Approach ◽  
Practical Implications

Purpose This study aims to define the parameters of the reward-risk principle in Islamic finance as established in the literature and discuss propositions that are presented on how such a principle is to be applied to Islamic banking products. Design/methodology/approach A descriptive approach is used to explore the normative parameters and criticisms of the application of reward-risk in Islamic finance. Findings The study finds that the principle of reward-risk is embodied in the multi-component concept of ʿiwaḍ (counter value) which must be evident in market transactions that involve commercial exchanges. The components include risk, costs, effort, value-adding and capital, all of which apply uniquely to different contractual forms of financing. Research limitations/implications The study uses academic literature and industry documents along with modest contact with prominent practitioners who provided general feedback on prevalent Islamic finance industry practices. Practical implications This study exposits the variety of approaches in applying the reward-risk principle and sheds light on the primary elements of the principle which will facilitate its greater consideration by the Islamic finance industry. Originality/value This study is a meaningful attempt at conveniently summing up and applying the parameters that are considered when discussing the scope of the reward-risk principle in Islamic finance.

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