scholarly journals EVOLVING MONETARY ECONOMICS IN ISLAMIC PERSPECTIVE

2021 ◽  
Vol 7 (2) ◽  
pp. 317-340
Author(s):  
Muhammad Ayub ◽  
M. Fahim Khan
Keyword(s):  
Monetary Policy ◽  
Islamic Law ◽  
Monetary Economics ◽  
Islamic Finance ◽  
Modern World ◽  
Public Confidence ◽  
Islamic Perspective ◽  
Banking And Finance ◽  
Finance Industry ◽  
Ethical Finance

The challenges facing the Islamic banking and finance industry include, inter alia, resolving the issue of ‘form over substance’, adopting value-based social and ethical finance, and reinforcing public confidence that its business and services conform to the principles of Shari’ah in both letter and spirit. These challenges can be faced only if Islamic finance is based on the money and monetary perspective of Islamic economics. An important aspect for discussion in this context is the issue of money creation. This paper is based on an analysis of the literature on conventional and Islamic economics and Islamic finance. It comprises observational and narrative research mainly because monetary policy from an Islamic perspective has not been implemented in any jurisdiction in the modern world. Its objective is thus to suggest how monetary policy might evolve from the perspective of Islamic law of contracts. It discusses an economic model in which a new theory of monetary economics could become a basis for evolving Islamic finance in its value-based perspective. It also discusses monetary economics and monetary policy from an Islamic perspective in the context of contemporary Muslim economies. The Islamic financial system must be based on the Islamic system of money, monetary economics and exchange principles. Hence, economists and policymakers may first focus on evolving monetary economics and policy from an Islamic perspective, to serve as a basis for structural reforms.

scholarly journals Sale with the temporary exclusion of usufruct

2018 ◽  
Vol 10 (1) ◽  
pp. 85-93
Author(s):  
Abdulbari Mashal ◽  
Amer Hajal ◽  
Om Kalthoum Majoul ◽  
Mir Riaz Ansary
Keyword(s):  
Design Methodology ◽  
Islamic Law ◽  
Added Value ◽  
Islamic Finance ◽  
Content Type ◽  
Finance Industry ◽  
Market Rate ◽  
Islamic Jurisprudence ◽  
Finance House ◽  
Associated Risk Factors

Purpose This paper aims to investigate sale with the temporary exclusion of usufruct, a format debated in classical Islamic jurisprudence. More specifically, it examines the application of this sale format in the diminishing partnership arrangement used by American Finance House LARIBA to finance house purchases. It analyzes the Sharīʿah issues and assesses the risks involved. Design/methodology/approach The research is qualitative, surveying and critically analyzing classical fiqh literature and contemporary juristic resolutions, as well as LARIBA’s financing documents. Finally, it systematically surveys the associated risk factors, first qualitatively, and then by quantifying them. Findings The research concludes that sale with the temporary exclusion of usufruct is a valid contract in Islamic law. When the usufruct is priced at market rate, the financing arrangement is genuinely Islamic and brings added value. Moreover, it is very effective in addressing risks for Islamic banks, particularly in countries with legal systems not designed to accommodate Islamic finance. Originality/value This study systematically examines all aspects of a contract that has not received sufficient academic attention, that has been underutilized by the Islamic finance industry and that is more fitting for implementation than many of the contracts currently being used.

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 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.

Social sukuk: A new mechanism to fund social services

2017 ◽  
Vol 5 (1) ◽  
pp. 69
Author(s):  
Saadiah Mohamed ◽  
Jaizah Othman ◽  
Othmar Lehner ◽  
Ruhaini Muda
Keyword(s):  
Social Services ◽  
Risk Sharing ◽  
Social Needs ◽  
Islamic Finance ◽  
Social Sector ◽  
Banking And Finance ◽  
Finance Industry ◽  
Financial Products ◽  
The Social ◽  
Asset Class

While the premise of Islamic finance embraces  the principles of maqasid al-shariah and risk sharing with  claims to social justice and welfare, the direct impact of the modern Islamic finance industry and its contribution to the social sector  has been limited. This paper examines the claim among critics that there is an inherent  weakness of the present day Islamic banking and finance in terms of its underdeveloped social sector and argues for the need for new models that will enhance a proliferation of shariah compliant financial products  for solutions in the social sector. The paper examines the emergence in Social finance of  social bonds as new financing tools targeting on  social needs and problems that otherwise would not be tackled.  This paper discusses  the benefits of  structuring such a shariah compliant product and  makes recommendations for structuring this new asset class  referred to in this paper  as social sukuk. 

scholarly journals The internal challenges facing Islamic finance industry

2016 ◽  
Vol 9 (2) ◽  
pp. 222-235 ◽  
Author(s):  
Abdulazeem Abozaid
Keyword(s):  
Product Development ◽  
Design Methodology ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Banking And Finance ◽  
Finance Industry ◽  
Development Methodology ◽  
Shariah Governance

Purpose The paper aims to highlight the challenges facing Islamic finance industry and outline the prospectus of what constitutes a sound Islamic banking product in terms of both its Shariah control and product development methodology. Design/methodology/approach The paper analytically addresses the internal challenges facing Islamic finance industry by highlighting, first, the deficiencies in the existing Shariah supervisory work and, then, the deficiencies in the product development methodology followed in Islamic banks. Findings Islamic banking and finance is facing some internal challenges which require immediate action. Although facing the external challenges may be beyond the capacity of the industry players, Islamic banks have no excuse to overlook or turn a blind eye to their internal challenges which can be overcome by enacting Shariah governance for both products and Shariah control and reforming the methodology of product development. Originality/value This paper highlights an issue that has not received the needed attention, and it proposes the necessary solutions to the problems it identifies.

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>

Part II Islamic Law and Contracts in Practice, 8 Derivatives and Islamic Finance

2020 ◽  
Author(s):  
Eisenberg David M
Keyword(s):  
Risk Management ◽  
Financial Institutions ◽  
Islamic Law ◽  
Islamic Finance ◽  
Futures Options ◽  
Finance Industry ◽  
Considerable Debate ◽  
Islamic Financial Institutions ◽  
Lack Of Knowledge

This chapter studies how conventional derivatives—especially futures, options, and swaps—have been or may be based on bay’ salam, bay’ ʻurbun, and other traditional Islamic transaction structures. Bridging the gap between traditional Islamic transaction structures and conventional derivatives continues to be among the most urgent challenges facing the global Islamic finance industry, not least to provide Islamic financial institutions with a crucial tool for risk management. Salam and ʻurbun clearly illustrate the nature of the challenge to create Shari’a-compliant derivatives. Paradoxically, it is their deviation from the standard conditions for a valid sale contract that allow them to function to some extent as proxies for conventional derivatives. Among jurists, a consensus (ijma’) emerged as to the validity of salam, although special conditions were imposed not only to minimize gharar (uncertainty) and the kindred contractual defect of jahl (lack of knowledge), but also to reduce the possibility of riba (unlawful gain). There is still considerable debate among the various schools of law as to whether ʻurbun constitutes a valid sale contract under the Shari’a.

scholarly journals U-2 The Juristic Decisions and Resolutions about Modern Islamic Finance and economics issued by Islamic Fiqh academy India

2020 ◽  
Vol 4 (2) ◽  
pp. 25-48
Author(s):  
Sajjad Ahmed ◽  
Muhammad Shahbaz Manj
Keyword(s):  
Islamic Law ◽  
Global Network ◽  
Islamic Finance ◽  
Modern World ◽  
Contemporary Society ◽  
Ethical Problems ◽  
Interfaith Relations ◽  
Collective Effort ◽  
Collective Method ◽  
Muslim Communities

 According to the Quran and Sunnah, the Sharī‘ah ruling for the new incidents derived by the process of Ijtihad. From the Sharī‘ah sources, ijtihad is a prerequisite for the survival of Islam law in a modern world. It plays a crucial role in applying Shari‘ah to contemporary society. Ijtihad is categorized into two types as individually as well as collectively. In the era of globalization and specialization, the collective method of ijtihad is preferably required to be embraced. Collective Ijtihad is a practical mechanism for determining the Shari‘ah’s opinion on modern issues facing Muslim communities (ummah) on a multiplicity of current issues. It explores the practical framework of this kind of ijtihad and its application by discussing the Islamic Fiqh Academy (IFA) India that practice it. The main objective of IFA was to provide solutions through a collective effort of religious scholars to solve the contemporary legal and ethical problems Muslim societies faced. IFA was established in 1989 in Dehli, so far successfully brought together a large number of religious scholars (ʿulamāʾ) and collaborates with a global network of several Islamic institutions with similar objectives. In the seminars discuss all matters from the perspective of Islamic law in a bid to find acceptable solutions. As of 2017 IFA has conducted 27 seminars in different cities of India whereas addressed almost 135 crucial issues such as Islamic Business contracts, Islamic finance, economics, medical ethics, insurance, divorce given by a drunkard and given in the state of intense anger, interfaith relations, and dialogues collective issues have been discussed and its decisions are valued all over the world. By discussing the IBF, the objective is to high light the contemporary collective Ijtihād in Fiqh of finance in light of the guidelines provided by the Sharī‘ah.

scholarly journals The Islamic Finance Industry and Grand Potential for Growth in the Contemporary Economy: Arousal for Dual Finances in Nigeria

2020 ◽  
Vol 8 (2) ◽  
pp. 1-9
Author(s):  
Nura Ahmad ◽  
Hashim Sabo Bello ◽  
Yunus Jibril Hassan
Keyword(s):  
Sampling Technique ◽  
Islamic Finance ◽  
Rapid Improvement ◽  
Significance Level ◽  
Finance Industry ◽  
Ethical Finance ◽  
Grand Potential ◽  
State Of The Economy ◽  
Convenience Sampling ◽  
Structured Questionnaire

The paper focuses on evaluating and comparing the justification of Islamic and conventional modes of finance in Nigeria. This study also intends to inspire the adoption of alternative ethical finance to harness its benefits in Nigeria. The acclaimed one hundred billion Sukuk bond launched by the Federal Government of Nigeria is just one of the critical plus Nigeria as a nation can benefit from Islamic finance. A structured questionnaire was distributed to the respondents in the Bauchi metropolis; thereby, the convenience sampling technique was used. Results were analyzed with Chisquare employed to test the hypothesis at a confidence level of 95% (0.05), that is, confidence and significance level, respectively. This study believed that Nigerians are quick to concern about their state of the economy. Therefore it’s suggested that there is an urgent need for everyone including the students of business and finance, the product developers for the emerging industry and banking personnel to have proper knowledge of the principles of Islamic finance vis-a-vis conventional finance about the essential requirements of different modes of finance and how they can be applied to various operations and services of banks and financial institutions in the dual economy. This paper further recommended that, when Islamic finance is properly instituted and practice as alternative ethical finance in the country, and more people apply for it, Nigeria economy would stand to be rejuvenated, boosted and made to be robust, embracing the Islamic financial system will present the best way the country’s economy can witness rapid improvement.

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