scholarly journals Shar¯ı‘ah Resolution and Islamic Finance: A Review

2021 ◽  
Vol 11 (01) ◽  
pp. 29-39
Author(s):  
Zakir Hossen Shaikh ◽  
◽  
Adel M Sarea ◽  
Abdelrahman Al-Saadi ◽  
Iqbal Thonse Hawaldar ◽  
...  
Keyword(s):  
Financial Institutions ◽  
Qualitative Method ◽  
New Products ◽  
Detailed Examination ◽  
Central Banks ◽  
Islamic Finance ◽  
Islamic Banks ◽  
Legal Response ◽  
Islamic Financial Institutions

Purpose: The purpose of this study is to look into the Shar¯ı‘ah resolution framework in Islamic finance and see how it may be improved. This paper is based on a detailed examination of previous research into the need for a worldwide Shar¯ı‘ah Resolution mechanism to be applied across all IFIs. Methodology: A detailed analysis of past studies on the necessity of a Shar¯ı‘ah Resolution framework to be implemented globally by all IFIs was used to develop the qualitative method. Findings: Measuring the level of fatwá disclosure by specific Islamic banks through central banks Shar¯ı‘ah judgements will add to the existing literature while also filling a gap. Significance: This study is noteworthy because it lays the framework for future researchers on the topic. Using a central bank to assess the extent to which certain Islamic banks have disclosed fatwá. Limitations: These articles’ implications may aid in the explanation of Shar¯ı‘ah-related concerns in Islamic finance. Shar¯ı‘ah resolution in Islamic finance will be a significant Shar¯ı‘ah resource for new products supplied by Islamic financial institutions, as well as any existing goods given to new clients and industry practitioners. Implications: The fatwá is the legal response to the present difficulties that have arisen in the community. fatwá are used to disseminate knowledge to Muslims in order to alleviate their difficulties and misconceptions. Any fatwá-related knowledge will have an impact on individuals, societies, and organizations . As a result, this paper examined the role of fatwás in sharing information and determining how far fatwás can educate society in resolving problems.

Sharia Compliant in Private Zakat Institutions of Riau

2020 ◽  
pp. 429-442
Author(s):  
Devi Megawati
Keyword(s):  
Financial Institutions ◽  
Supervisory Board ◽  
The Body ◽  
Islamic Banks ◽  
Body Of Knowledge ◽  
Islamic Financial Institutions ◽  
Primary Reference

This study aims to understand the role of Sharia Supervisors in the private Zakat Institution (LAZ) as well as other aspects of sharia compliance, such as Zakat fatwa on the perspective of Zakat officers. According to Decree of the Minister of Religion Number 333 / 2015 that LAZ as register must have a sharia supervisor. Sharia compliance of an institution could rely on the role of the sharia supervisory board (SSB). Some literature discussing this topic is still dominated study on Islamic financial institutions (IFIs), especially in Islamic Banks. Therefore this article will contribute to the body of knowledge, especially in the zakat literature. Data were gathered from five presiding officers of private zakat institutions in one province in Indonesia which consists of three presiding officers from provincial LAZ representative and two presiding officers from LAZ district. The study found that Sharia compliance in LAZ had many weaknesses such as lack of sharia control by sharia supervisors, a member of the sharia supervisory board who does not follow the latest issues about Zakat or the absence of competency requirements to be a sharia supervisor at LAZ and also did not make Zakat fatwa issued by MUI as the primary reference by zakat officer. This information will be useful for stakeholders, including supervisory authorities and regulators.

scholarly journals The Regulation of Islamic Finance in the United Kingdom

2010 ◽  
Vol 13 (1) ◽  
pp. 69-77 ◽  
Author(s):  
Jonathan Ercanbrack
Keyword(s):  
United Kingdom ◽  
Financial Institutions ◽  
Islamic Finance ◽  
Islamic Banks ◽  
Financial Industry ◽  
Religious Dimension ◽  
The United Kingdom ◽  
Islamic Financial Institutions

This article examines the unique risks associated with Islamic financial institutions and the secular state's reticence to directly regulate their religious dimension. It argues that the state's method of regulating the Islamic financial industry ignores special reputational risks associated with the religious and cultural distinctiveness of Islamic banks.

scholarly journals Islamic finance and the global financial crisis: an empirical study

2021 ◽  
Vol 3 (3) ◽  
pp. 62-69
Author(s):  
Fadwa Errami ◽  
Jamal Abnaha
Keyword(s):  
Financial Institutions ◽  
Global Economy ◽  
Islamic Law ◽  
Global Financial Crisis ◽  
The United States ◽  
Muslim World ◽  
Islamic Finance ◽  
Islamic Banks ◽  
Islamic Financial Institutions ◽  
The Global Financial Crisis

Islamic finance can no longer be dismissed as a passing fad or as an epiphenomenon of Islamic revivalism. Islamic financial institutions now operate in over 70 countries. Their assets have increased more than fortyfold since 1982 to exceed $200 billion. In 1996 and 1997, they have grown at respective annual rates of 24 and 26 per cent.1 By certain (probably overly optimistic) estimates, up to half of the savings of the Islamic world may in the near future end up being managed by Islamic financial institutions. The first Islamic banks were created in the 1970s, at the time when the aggiornamento of Islamic doctrine on banking matters was taking shape. At the time, Islamic banks were typically commercial banks operating on an interest-free basis. Today, as a consequence of broad changes in the political–economic environment, a new generation of Islamic financial institutions, more diverse and innovative, is emerging as the doctrine is undergoing a new aggiornamento. Perhaps the most important development has been the growing integration of Islamic finance into the global economy. There is now a Dow Jones Islamic Market Index, which tracks 600 companies (from inside and outside the Muslim world) whose products and services do not violate Islamic law. Foreign institutions such as Citibank have established Islamic banking subsidiaries, and many conventional banks – in the Muslim world but also in the United States and Europe – are now offering ‘Islamic products’ that are sometimes aimed at non-Muslims.

Musharakah Mutanaqisah home financing: issues in practice

2018 ◽  
Vol 9 (1) ◽  
pp. 91-103 ◽  
Author(s):  
Alam Asadov ◽  
Zulkarnain Bin Muhamad Sori ◽  
Shamsher Mohamad Ramadilli ◽  
Zaheer Anwer ◽  
Shinaj Valangattil Shamsudheen
Keyword(s):  
Financial Institutions ◽  
Current Mode ◽  
Fair Value ◽  
The Body ◽  
Islamic Finance ◽  
Islamic Banks ◽  
Periodic Review ◽  
Content Type ◽  
Finance Industry ◽  
Islamic Financial Institutions

Purpose This paper aims to examine the practical issues in the Musharakah Mutanaqisah (MM) financing and subsequently, recommends possible solutions to mitigate these issues and improve the current practice. Design/methodology/approach This paper analyses the theory and current practices of MM offered by Islamic banks. Findings It is suggested that Islamic financial institutions consider revaluation of property’s value to its fair value, especially during termination of MM contract and annual or agreed periodic review of the market value of the assets to determine the “rental” payments by the customer. It is also recommended that Islamic financial institutions should share all associated costs in performing the contract. Research limitations/implications Research findings reported in this paper contribute to the body of knowledge on MM in general and to the Islamic finance practices in Malaysia and abroad. Indeed, the Malaysia Central Bank (i.e. Bank Negara Malaysia) should form a special committee to look into the issues highlighted in this paper and recommend strict guidelines for Islamic financial institutions to improve their practices. Practical implications Islamic banks should extend the use of MM contract in automobile and trade financing where rent or profit could be easily identified and value of the asset is more certain. The regulators and Islamic financial standard setting authorities need to oversee the Shari’ah board decisions on MM contracts and keep the gates in the interest of ensuring a more viable and authentic Islamic finance industry. Originality/value This paper briefly views the current mode of MM contracts, specifically for home financing, and highlights the incompliance to Shari’ah requirements in exercising these contracts in practice.

scholarly journals The Role of Skills in Islamic Financial Innovation: Evidence from Bahrain and Malaysia

2020 ◽  
Vol 6 (3) ◽  
pp. 47 ◽  
Author(s):  
Jessie Poon ◽  
Yew Wah Chow ◽  
Michael Ewers ◽  
Razli Ramli
Keyword(s):  
Continuous Improvement ◽  
Financial Institutions ◽  
Service Innovation ◽  
Financial Innovation ◽  
Technical Skill ◽  
Islamic Finance ◽  
Islamic Financial Institutions ◽  
Negative Effect ◽  
The Relationship

A body of work has emerged that examines human capital from the perspective of skills to better understand the types of expertise that influence innovation. The relationship between skill and financial innovation, however, is poorly understood in the context of Islamic financial institutions (IFIs). IFIs are distinct from their conventional counterparts by their compliance with Shariah law. Based on a survey of IFIs in Bahrain and Malaysia, this paper examines the effect of different skills on IFI innovation. The findings indicate that while skill in Islamic finance positively influences innovation, skill in Shariah law does not. Cognitive-technical skill is also highly significant, but marketing skill has a negative effect. The results suggest that Islamic financial innovation relies on continuous improvement that sustains markets, product and service innovation. Sustaining innovation lends itself to abilities that are oriented towards problem solving and computation of Shariah and business risks. This favors skills of programming and expertise in Islamic finance over marketing and Shariah legal proficiency.

scholarly journals Model Pembiayaan Syariah Dalam Mengatasi Praktik Sistem Tebasan Di Sentra Padi Nasional

AL-TIJARY ◽  
2019 ◽  
Vol 4 (2) ◽  
pp. 81-94
Author(s):  
Nono Hartono
Keyword(s):  
Human Resources ◽  
Financial Institutions ◽  
Research Method ◽  
Islamic Law ◽  
Qualitative Approach ◽  
Islamic Finance ◽  
Islamic Financial Institutions ◽  
Long Time ◽  
Main Factors

The objectives of this study to identify the implementation of tebasan practices, analyze the contribution of the role of Islamic financial institutions and develop a sharia financing model to solve the practice of tebasan. The research method used with a qualitative approach, through interviews with farmers and Islamic financial institutions. The results showed that the practice of the tebasan in Indramayu had been carried out for a long time by the community, this was due to the lack of understanding of Islamic law which made the farmers continue to carry out the practice. In addition, the contribution of Islamic financial institutions to solved the practice has not yet existed. The absence of limited capital human resources and businesses that have large risks are the main factors of Islamic financial institutions have not contributed. Islamic finance which can be a solution to solve the practice of tebasan source non-commercial financing (Al-Qardhul Hasan) and commercial financing (Salam, Musyarakah or Mudharabah).

scholarly journals FEASIBILITY OF BAY SALAM FINANCE: A SURVEY OF THE OPINIONS OF STAKEHOLDERS

2018 ◽  
Vol 6 (1) ◽  
pp. 001
Author(s):  
Muhammad Tahir Manoori ◽  
Atiq-ur-Rehman Atiq-ur-Rehman ◽  
Muhammad Jamil ◽  
Muhammad Ishfaq
Keyword(s):  
Financial Institutions ◽  
Urban Areas ◽  
Formal System ◽  
Survey Questionnaire ◽  
Islamic Banks ◽  
Livestock Farming ◽  
Agriculture Sector ◽  
Islamic Financial Institutions ◽  
Spss Software

The present study aims to explore the potential application of Bai Salam (forward sale agreement) as substitute financial instrument in the agriculture sector of Pakistan. The conclusion is drawn through a survey questionnaire from 300 farmers and bankers in a district of Punjab. For analysis, we use SPSS software and presented the results by using descriptive methods. This study overall concludes the banker’s and farmer’s awareness, willingness, risks, hurdles and the role of institutions in the Salam promotion. The majority of the farmers are not aware of the Salam contract because the Islamic bank’s branch network is limited to urban areas and there is no proper promotion campaign launched by the Islamic banks for awareness about Salaam among the farmers. Bankers are reluctant to finance the tenants, orchards due to more operational risk for the bank. Bankers opinion that small farmers do not have personal securities which is not a solid reason because half of the sampled farmers take a loan from the formal system if they can provide securities to conventional interest-based institution why they can’t provide securities to Islamic financial institutions? There is a vast market for the Islamic Banks if they sincerely pay their attention towards forward sale contracts. The concept applies to all areas of agriculture and livestock farming to overcome financing problems and boost production. 

Islamic financing options for SMEs- role of Islamic banks

2018 ◽  
Vol 8 (3) ◽  
pp. 109-120
Author(s):  
Haouam Djemaa
Keyword(s):  
Small And Medium Enterprises ◽  
Islamic Finance ◽  
Islamic Banks ◽  
Total Employment ◽  
Islamic Financial Institutions ◽  
Term Basis ◽  
Small Medium Enterprises ◽  
Medium Enterprises ◽  
Domestic Products

Small Medium Enterprises (SMEs) have significant role in employment creation and growth of gross domestic products of developing country.  In developing countries, they represent the majority of employment. SMEs constitute the overwhelming majority of firms. Globally, SMEs make up over 95% of all firms, account for approximately 50% of GDP and 60%–70% of total employment. However, in order to grow and contribute more significantly to the economy, SMEs face some constraints. One of the main constraints faced by SMEs is the lack of finance. Islamic bank financing products may help to solve this problem. The Islamic  participatory schemes, such as mudarabah and musyarakah, integrate assets of lender and borrowers; therefore, they allow Islamic banks to lend on a longer-term basis to projects with higher risk-return profiles and, thus, to support economic growth.However, as Islamic banks try to avoid uncertainties, the mentioned schemes are not widely used. Therefore, support from government and academia needed to create innovation in the participatory financing scheme so that all related parties can share mutual benefits. The purpose of this paper is to investigate  the main challenges to Islamic finance for SMEs. This paper will help to deepen understanding of the concepts of Islamic finance as well as SMEs. In addition to evaluate how Islamic financial institutions can support SMEs.  Keywords: Islamic  Finance,Islamic Banks, Small and Medium Enterprises

The determinants of the choice of Islamic banks in Tunisia

2016 ◽  
Vol 34 (5) ◽  
pp. 710-730 ◽  
Author(s):  
Moez Ltifi ◽  
Lubica Hikkerova ◽  
Boualem Aliouat ◽  
Jameleddine Gharbi
Keyword(s):  
Financial Institutions ◽  
Demographic Characteristics ◽  
Islamic Finance ◽  
Islamic Banks ◽  
Content Type ◽  
Islamic Bank ◽  
Gender And Age ◽  
Islamic Financial Institutions ◽  
Selection Of

Purpose – The purpose of this paper is to determine the explanatory factors for the selection of Islamic banks and evaluate the moderating role of demographic characteristics. This study seeks to better understand these determinants in Tunisia, a country with a developing Islamic finance system and a culture different from those in other Muslim countries studied in the literature. Design/methodology/approach – The authors developed a two-sided approach: a quantitative survey and 12 semi-structured interviews based on four customer segments identified by the quantitative study. For the survey, data were collected from 180 Islamic bank clients in Tunisia. The factors adopted for the selection of an Islamic bank are service quality, trust, and compliance with Sharia (Islamic) law. The authors identified and measured the selection criteria using a factor analysis, regression analysis, and demographic characteristics analysis. Findings – Customers consider several factors while choosing an Islamic bank: the quality of service offered by the financial institutions, trust, and (especially) compliance with Sharia law. Moreover, gender and age appear to be the only moderators between the selection of an Islamic bank and these determinants. Practical implications – This study offers Islamic banks a better understanding of how Tunisian customers select financial institutions. These banks must consider the different determinants of choice in order to create value for consumers and prepare their marketing strategies. The authors identify four customer segments based on gender and age by which the banks may improve their positioning and market share, thus contributing to the development of Islamic financial institutions in Tunisia. Originality/value – This is the first study of its kind in Tunisia, where the market share of Islamic finance remains low. The study enriches the Islamic marketing literature on the quality of Islamic financial institutions’ service, trust, and compliance with Sharia law. It also tests demographic characteristics as moderators. The results and implications of this research can be applied to countries similar to Tunisia.

Part G Islamic Finance, 51 Corporate and Regulatory Issues

2015 ◽  
Author(s):  
Proctor Charles
Keyword(s):  
Financial Institutions ◽  
Islamic Finance ◽  
Islamic Banks ◽  
Regulatory Issues ◽  
Regulatory Standards ◽  
Islamic Financial Institutions ◽  
Standards And Guidelines ◽  
The Uk

This chapter examines corporate and regulatory issues which have arisen within the UK with respect to the authorization and business of Islamic financial institutions. It discusses the constitutional structure of Islamic banks; regulatory standards and guidelines; deposit-taking; collective investment schemes; and Islamic home finance.

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