scholarly journals Fatwa and Its Shariah Methodology in Islamic Finance

2018 ◽  
Vol 2 (1) ◽  
pp. 133-179
Author(s):  
Ahcene Lahsasna
Keyword(s):  
Corporate Governance ◽  
Key Words ◽  
Financial Institutions ◽  
Significant Role ◽  
Islamic Law ◽  
Islamic Finance ◽  
Board Members ◽  
Muslim Community ◽  
Islamic Jurisprudence ◽  
Islamic Financial Institutions

Abstract Fatwa plays a very significant role in Shariah by providing different resolutions and solutions to the Muslim community when it is needed to ensure the compliance with principles of Shariah and commends of God. It should be understood that fatwa is not confined to particular section in Islamic law but it covers the entire sections and subsection of Islamic law including business, finance and trade. Today, fatwa takes a different shape in Islamic finance; it is introduced and presented in the industry in the form of resolutions issued by Shariah board members who represent Shariah corporate governance body in the structure of the Islamic financial institutions. The resolution is further structured in the form of Shariah endorsement which is part and parcel of product approval as required by the regulators. The present paper discusses fatwa and its methodology in Islamic finance to ensure a sound process of issuing an accurate resolutions that comply with the rules and guidelines that have been set in Islamic jurisprudence. Key words: Fatwa, resolutions, methodology, sources of Shariah, Shariah board.

Pemakaian Prinsip Hibah Dalam Sistem Kewangan Islam Di Malaysia: Tumpuan Kepada Industri Perbankan Islam Dan Takaful

2012 ◽  
Author(s):  
Nasrul Hisyam Nor Muhamad
Keyword(s):  
Key Words ◽  
Financial Institutions ◽  
Islamic Law ◽  
Financial System ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Islamic Financial Institutions ◽  
Support Principle ◽  
Islamic Insurance ◽  
Inter Vivos

Hibah merupakan salah satu prinsip dalam muamalah Islam yang diamalkan di institusi–institusi kewangan Islam di Malaysia. Tujuan artikel ini adalah untuk membincangkan pemakaian prinsip hibah dalam Sistem Kewangan Islam di Malaysia, iaitu institusi perbankan Islam dan takaful. Bagi memperolehi data primer mengenai aplikasi prinsip hibah di dua institusi kewangan Islam tersebut, penulis telah menjalankan temu bual dengan individu yang berautoriti di Bahagian Syariah Bank Negara Malaysia, Jabatan Pematuhan Syariah di Etiqa Takaful Bhd dan Takaful Ikhlas Sdn. Bhd. Penulis mendapati bahawa prinsip hibah, walaupun tidak dianggap sebagai prinsip utama, namun ia diaplikasikan sebagai prinsip sokongan dalam aktiviti–aktiviti muamalah Islam di Institusi Kewangan Islam di Malaysia. Kata kunci: Hibah; sistem kewangan Islam; muamalah Islam; perbankan Islam; takaful; undang–undang Islam Hibah (gift inter vivos) is one of the principles of Islamic transaction that are applied at Islamic Financial Institutions in Malaysia. The purpose of this article is to discuss the application of hibah in Islamic banking as well as the takaful. In the collection of data on the application of hibah at these Islamic institutions, the writer has conducted interviews with authoritative persons at the Shariah Division Bank Negara Malaysia, the Shariah Compliant Department at Etiqa Takaful Bhd and the Takaful Ikhlas Sdn. Bhd. The writer found that even though hibah is not considered as a core principle, but it is applied as a support principle in Islamic transaction activities in the institutions of Islamic Finance in Malaysia. Key words: Gift inter vivos; Islamic financial system; Islamic transaction; Islamic banking; Islamic insurance; Islamic law

Part I Introduction, 1 Status of the Global Islamic Finance Industry

2020 ◽  
Author(s):  
Warde Ibrahim
Keyword(s):  
Financial Institutions ◽  
Significant Role ◽  
Islamic Finance ◽  
Trial And Error ◽  
Global Finance ◽  
Finance Industry ◽  
Complex Process ◽  
Islamic Financial Institutions ◽  
Political Economic

This introductory chapter provides an overview of Islamic finance. Modern Islamic finance did not come out of nowhere. It appeared as the result of specific historical circumstances in the 1970s, and later evolved through a complex process of trial-and-error. It was also shaped by broader competitive and political–economic factors. Although religion was by definition central to Islamic finance, other variables—political, economic, social, cultural, and demographic—also played a significant role. No longer confined to the outer fringes of global finance, Islamic finance has also gone mainstream. Most major financial institutions are now involved in one way or another in Islamic finance, as are global consulting, accounting, and information companies. Within the Islamic world, Islamic financial institutions have become major economic players.

Mushārakah—A Realistic Approach to the Concept in Islamic Finance and its Application to the Agricultural Sector in Pakistan

2014 ◽  
Vol 28 (1) ◽  
pp. 1-39
Author(s):  
Lutfullah Saqib ◽  
Kellie W. Roberts ◽  
Mueen A. Zafar ◽  
Khurram Khan ◽  
Aliya Zafar
Keyword(s):  
Financial Institutions ◽  
Agricultural Sector ◽  
Islamic Law ◽  
Lower Class ◽  
Islamic Finance ◽  
Financial Problems ◽  
Human Survival ◽  
Realistic Approach ◽  
Islamic Financial Institutions

Abstract Food is one of the basic necessities that is imperative for human survival. The majority of farmers related to agriculture belong to the lower class and are hence not in a position to fulfil their agricultural needs. Therefore, they must borrow from various sources, e.g., from individuals, organizations, and/or banks, using interest-based lending, which Muslims are prohibited from doing according to the Sharīʿah. Here the concept of mushārakah (participatory mode of finance) is the best option. The present work discusses the application of such transactions to overcome farmers’ financial problems. In this article, the concept of mushārakah is first elaborated in light of classical/contemporary Islamic law literature referring to its rules and regulations followed by a discussion on how mushārakah can be effectively applied to the agricultural sector. The concepts of muzāraʿah (temporary sharecropping contract), musāqah, diminishing mushārakah (al-mushārakah al-mutanāqisah), and customer agency are critically analyzed in such away to make these fit and viable for farmers and Islamic financial institutions.

scholarly journals Blockchain and Smart contract’s contributions to Zakat management system

2020 ◽  
pp. 15-24
Author(s):  
Dhiaeddine Rejeb
Keyword(s):  
Financial Institutions ◽  
Management System ◽  
Financial Sector ◽  
Distributed Database ◽  
Islamic Finance ◽  
Funding Model ◽  
Blockchain Technology ◽  
Smart Contract ◽  
Islamic Jurisprudence ◽  
Islamic Financial Institutions

Blockchain is an open distributed database that carries out transactions on an open decentralized ledger. It is a technology that will probably be the source of a huge digital change especially in the financial sector. The application of this technology has started to take its first steps recently and its importance is undeniable in an emerging and expanding field such as Islamic finance. In this context, the purpose of this article is to study the integration of the blockchain and one of its important components, namely the smart contract in the management of the compulsory Islamic charity the zakat. To do this, we have developed a funding model linking all the stakeholders in question and the diversities of blockchain technology. We were thus able to conclude huge benefits and technical contributions in this context which encourages Islamic financial institutions to develop more models likely to support this technology without ignoring  the compliance with the Islamic jurisprudence rules.

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.

scholarly journals PENGENTASAN KEMISKINAN DAN PENGEMBANGAN MASYARAKAT MELALUI MODEL KEUANGAN ISLAM BMT AL-ISHLAH CIREBON

2018 ◽  
Vol 9 (2) ◽  
pp. 101
Author(s):  
Muhammad Awaluddin Ardiansyah
Keyword(s):  
Financial Institutions ◽  
Poverty Reduction ◽  
Islamic Law ◽  
Financial Institution ◽  
Financial System ◽  
Islamic Finance ◽  
Islamic Financial Institutions ◽  
Islamic Economic ◽  
A Charge ◽  
The Right

Although in fact the conventional financial system has manifestly failed in the fair distribution of wealth, but Islamic financial system in Indonesia is not a strong alternative financial system. Market share of Islamic financial institutions are still low below 5% with growth of 34% in 2015. The data indicates the existence of problems in the implementation of the principles of Islamic finance though in terms of potential prospects. Islamic economic principles which have a charge values of justice, divinity, freedom and responsibility, the right should be a system of democratic economy in the economic empowerment of the poor. Some of the reasons based on the analysis of the field to be the cause of them; The first people are still accustomed to a conventional system that has been around longer, the second Islamic financial institutions are not ready completely adopt the Islamic financial system in particular lost Pofit product sharing (PLS), the third implementation of Islamic financial institutions require relatively high operating costs. On the above problems, the authors analyzed qualitatively descriptive of a theme study "Al-Islah BMT Cirebon as Islamic Financing Model for Poverty Reduction and Development". An analysis of the terms of the Muamalat Islamic law and court analyzes considering the author as a community development agency practitioners who use Islamic financial institutions Baitul Maat wa Tamwil (BMT) in technical operations. This simple paper notes that Islamic financial institutions in Indonesia has not fully practice the principles of Islamic finance because of certain interests. That has existed in Indonesia an Islamic financial institution which according to the principles of Islam in practice the empowerment of people out of poverty.

scholarly journals Legal Obstacles in Shari’ah Corporate Governance of Islamic Financial Institutions in Malaysia

2011 ◽  
Vol 24 (2) ◽  
pp. 179-182 ◽  
Author(s):  
Aishath Muneeza Aishath Muneeza
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Significant Role ◽  
Asia Pacific ◽  
Business Research ◽  
Research Conference ◽  
Islamic Financial Institutions ◽  
King Abdulaziz University ◽  
The Law

This paper was sent to be published in the Journal of King Abdulaziz University for Islamic Economics. Also, it was presented in different title( ) in the Asia-Pacific Business Research Conference in Malysia, February 2011. The researchers highlighted the significant role of the Shari’ah corporate governance in the effectiveness and stability of Islamic financial Institutions in Malaysia. They outline the roles of corporate governance (in both conventional and Islamic corporations) through which it can be directed, administered and controlled. However, they argue that Shari’ah corporate governance has different perspective and methodology. The Shari’ah corporate governance primary is based on the tenets of Islam as the primary law and then on other positive laws, such as laws regulating the interest of the directors and the stakeholders. They described the structure of shari’ah corporate governance in Malaysia in order to emphasize and underscore some legal obstacles in the Shari’ah corporate governance and suggest some practical solutions to reform absence in the law.

Executives’ observance of zakat among Islamic financial institutions: evidence from Bahrain and Malaysia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jessie P.H. Poon ◽  
Yew Wah Chow ◽  
Michael Ewers ◽  
Trina Hamilton
Keyword(s):  
Financial Institutions ◽  
Design Methodology ◽  
Change Agents ◽  
Islamic Finance ◽  
Board Members ◽  
Content Type ◽  
Financial Firms ◽  
Management Positions ◽  
The Board Of Directors ◽  
Islamic Financial Institutions

Purpose The purpose of this paper is to examine the influence of Shariah board members and managerial networking on zakat observance among executives of Islamic financial firms (IFFs) in Bahrain and Malaysia. Design/methodology/approach The methodology is based on surveys administered to 106 respondents and personal interviews conducted with individuals holding management positions in IFFs. Findings The paper finds that: networking among IFF executives in Bahrain positively influences their observance and perception of zakat in their firms; and higher representation of Shariah on the board of directors increases executives’ favorable perception and observance of zakat in Malaysia. Differences in findings may be explained by Bahrain’s global Shariah institutions where networking offers opportunities for socialization of zakat ethics. In Malaysia, on the other hand, Shariah directorship sets the pace and direction of zakat ethics. Originality/value The seminal work of DiMaggio and Powell (1991) on neo-institutional theory has drawn attention to executives’ agency in creating cognitive frameworks that help promote the development of firm standards and norms. However, application of the theory to Islamic finance is largely absent. This paper contributes to an empirical understanding of the theory by highlighting sources of IFFs’ social agency in the development of zakat norm and its observance, namely, managerial networking and Shariah directors as change agents.

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 Analisis Penerapan Islamic Good Corporate Governance (IGCG) pada Bank Pembiayaan Rakyat Syariah Hikmah Wakilah Banda Aceh

2019 ◽  
Vol 1 (2) ◽  
pp. 192-212
Author(s):  
Zainal Abidin
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Islamic Law ◽  
Financial Institution ◽  
Profit Maximization ◽  
Transaction Management ◽  
Good Corporate Governance ◽  
Strategic Role ◽  
Islamic Financial Institutions ◽  
Banda Aceh

The Syari'ah Financial Institution has a very strategic role in the efforts of developing a people's economy because the Shari'ah bank is oriented to benefits not only on profit maximization. The formulation of the problem in this paper is: How is the concept and application of Islamic Good Corporate Governance (IGCG) in Islamic Financial Institutions; and How the implementation of Good Corporate Governance in BPRS Hikmah Wakilah Banda Aceh. The purpose of writing is: To find out the concepts and application of Islamic Good Corporate Governance (IGCG) in Islamic financial institutions and also analyze the implementation of the concept of Islamic Good Corporate Governance (IGCG) in BPRS Hikmah Wakilah Banda Aceh. This study uses qualitative research methods, the approach taken is descriptive, namely to know and describe the reality of the events studied or research conducted on independent or single variables. Islamic Good Corporate Governance (IGCG) in Islamic Financial Institutions is very different as applied in conventional financial institutions. Islamic financial institutions always pay attention to aspects of legal sources, namely the Qur'an and the hadith, the principle of adherence to Islamic law is used as a basis in bermuamalah which does not contain elements of maisir, usury and gharar in every transaction. Management of PT. BPRS Hikmah Wakilah is in line with its vision and mission of providing services to the community, namely the shuttle system. So that customers who are small and medium entrepreneurs do not have to leave their place of business to deposit payments to the BPRS. Application of Islamic Good Corperate Governance at PT. BPRS Hikmah of Wakilah, namely with a system of transparency, trustworthiness and a guarantee mechanism for sharia compliance, so that BPRS Hikmah of time gets the trust of the community and stakeholders.

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