scholarly journals Opinions of Shaikh Ali Al- Qaradaghi in the Issues of Debt Arrears in IFIs A Comparative Study with Institutional Ijtihād

2021 ◽  
Vol 1 (2) ◽  
pp. 90-113
Author(s):  
Abdellah Ali Ahmed Al-Melahi
Keyword(s):  
Comparative Study ◽  
Financial Institutions ◽  
Financial Industry ◽  
Liquidated Damages ◽  
Difference Of Opinion ◽  
Foreign Currencies ◽  
Islamic Financial Institutions ◽  
Almost All ◽  
Bad Debt ◽  
Financial Penalty

Almost all the transactions done by Islamic financial institutions comprise of debts which are measured in local or foreign currencies. This study aims at presenting and discussing opinions of Sh. Shaikh Ali Al- Qaradaghi in issues related to debt arrears settlement as faced by IFIs and prioritizing its usage. The study will discuss the overall principles of debts in general, and about the bad debts in particular. Also, the study discussed standards and Shari’ah pronouncements about debts and arrears settlement issued by organizations and Shari’a boards which focus on issuing pronouncements and standards in the Islamic financial industry. Also, the study discussed opinion of Sh. Ali AlQaradaghi about debts arrears and comparing it with opinions of ijtihād organizations as per the sequence arranged by the researcher. The study found that difference in opinions is existing while dealing with a procrastinating debtor, but for insolvent debtor, so there is no difference of opinion between Shaikh Ali and other except Shariah Standards of Bank Negara Malaysia with no different treatment between a procrastinating and insolvent debtor. The study further arrived at that acceleration of installments and alternatives to bad debts are based on four aspects: acceleration of remaining installments, compensation due to harm of inflation during the arrears, imposing financial penalty, and liquidated damages. This is concerning all the ijtihād bodies. However, Shaikh Ali’s view goes around two aspects: acceleration of remaining installments and compensation due to harm caused by hyperinflation. The study found that there is 71% homogeneity in all the solutions between the opinions of Shaikh Ali and other bodies, and 50% homogeneity for the solution of compensation for harm of inflation. The researcher presented some recommendations, and some of the important ones are working towards unifying the alternatives at least in one country, subsequential treatment of treating bad debt starting from partial acceleration of installments in tandem with the harm of inflation, and finally going for harm of inflation which can be adopted by those who take the view of Shaikh Ali.

scholarly journals IMPLEMENTATION OF RAHN IN SHARIA GOLD FINANCING AT MODERN ISLAMIC FINANCIAL INSTITUTIONS (CASE STUDY IN BANK BRI SYARIAH BRANCH OF PEKANBARU).

Hukum Islam ◽  
2018 ◽  
Vol 18 (1) ◽  
pp. 40
Author(s):  
AHMAD MAULIDIZEN
Keyword(s):  
Data Collection ◽  
Financial Institutions ◽  
Field Research ◽  
Islamic Banking ◽  
Financial Industry ◽  
Collection Method ◽  
Data Collection Method ◽  
Islamic Financial Institutions

Islamic Financing Products have started to grow rapidly in the current banking and financial industry at this time. This situation can be seen through the increase of Islamic banking assets for several years, in addition to the inclusion of more institutions offering Islamic products. Sharia Gold Pawn Products is the delivery of marhun (collateral goods) from the rahin (customers using mortgage financing) to the bank as a guarantee of part or all of the debt. This research is field (field research) with data collection method through observation, interview and documentation study in data collection. The author concludes that the application of Rahn's contract on Sharia gold mortgage financing at Bank BRI Syariah has been in accordance with the National Sharia Board Fatwa and there are several things that must be improved so as not to conflict with Sharia principles

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.

واقع الصناعة المالية الإسلامية عبر العالم

2018 ◽  
Vol 5 (1) ◽  
pp. 597-624
Keyword(s):  
Economic Development ◽  
Financial Market ◽  
Financial Institutions ◽  
Islamic Banking ◽  
International Level ◽  
Financial Industry ◽  
Positive Growth ◽  
Islamic Financial Institutions ◽  
Asset Size ◽  
Shed Light

ملخص: شهدت الصناعة المالية الإسلامية على مدى العقود الثلاثة الأخيرة تطورات هامة، على مستوى نمو الأصول والموجودات وكذلك على مستوى الانتشار الجغرافي والدولي، وبرزت أيضا كأحد مجالات المنافسة والتأثير على السوق المالي وأصبحت تساهم في التنمية الاقتصادية التي شهد نموها دوليا اتجاها إيجابيا من خلال العديد من المؤسسات المالية الإسلامية. يهدف البحث إلى تسليط الضوء على ما حققته الصناعة المالية الإسلامية ومدى انتشارها على المستوى الدولي مع إعطاء بعض النماذج للصناعة المالية الإسلامية في الدول الإسلامية وغير الإسلامية. الكلمات المفتاحية: الصناعة المالية الإسلامية، الصيرفة الإسلامية، الصكوك، الصناديق الإسلامية، التكافل. Abstract Over the last three decades, the Islamic financial industry has witnessed significant developments, both in terms of asset size and geographical spread. It has emerged as one of the areas of competition and has played a role in influencing the financial market and contributing to economic development which has witnessed positive growth due to the efforts of many Islamic Financial Institutions. The research aims to shed light on the achievements of the Islamic financial industry and its spread at the international level, while giving some examples to the Islamic financial industry in Islamic and non-Islamic countries. Keywords: Islamic Financial Industry, Islamic Banking, Sukuk, Islamic Funds, Takaful.

scholarly journals SOME NOTES ON IFRS CONVERGENCE AND THE ISLAMIC FINANCIAL INDUSTRY

2018 ◽  
Vol 7 (1) ◽  
pp. 1
Author(s):  
Ratna Mulyany
Keyword(s):  
Financial Institutions ◽  
Financial Reporting ◽  
Service Industry ◽  
Accounting Standards ◽  
Islamic Finance ◽  
Financial Industry ◽  
Financial Reporting Standards ◽  
Islamic Financial Institutions ◽  
Worldwide Phenomenon ◽  
Accounting Convergence

IFRS Convergence has been a worldwide phenomenon with most of countries in the world are adoptingIFRS instead of their national accounting standards. At the same time, the Islamic finance is gaining its popularity in the present world with the increasing acceptance by international community. In relation to these two phenomena, there have been concerns that the establishment of Islamic financial institutions together with its own unique characteristics will impede the achievement of the global accounting convergence. Furthermore, the promulgation of accounting standards by Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), which is intended to fulfil the unique features of Islamic Financial Industry is viewed as a challenge to the International Financial Reporting Standards (IFRS), which is promoted by the convergence agenda. Numerous complex issues emerge as result of the dilemmatic position of IFIs in retaining its distinct Shari’ah principles, while attempting to be part of the global financial system through adopting the IFRS. This study aims to describe some notes relating to the IFRS convergence and the development of Islamic finance. The objective is to outline the issues, not necessarily to resolve them, and to consider the implications they have for pursuing IFRS convergence in the context of Islamic financial service industry.

scholarly journals Islamic Finance Industry in the Middle East and North Africa: Ways out of the Exogenous Crisis

2021 ◽  
Vol 14 (1) ◽  
pp. 62-91
Author(s):  
S. Yu. Babenkova
Keyword(s):  
Financial Institutions ◽  
Global Economy ◽  
Banking Sector ◽  
Good Opportunity ◽  
Arab Region ◽  
Finance Industry ◽  
The Social ◽  
Islamic Financial Institutions ◽  
Almost All ◽  
Restrictive Measures

For almost a decade the world has been struck by two global financial crises – the crisis of 2008–2009 and the ongoing socio-economic crisis caused by the COVID–19 pandemic. Although these crises continue to have a serious impact on the global economy, they differ in terms of root causes and timing of action. The crisis of 2020 affected almost all spheres of society, not only financial organizations suffered, but, first of all, small and medium–sized entrepreneurs whose business had to be temporarily suspended or closed completely.The programs of anti–crisis measures taken by the governments of different countries practically do not differ from each other in their conceptual component, declaring financial injections into the banking sector or the social sector as priority measures to support the population as priority measures, taking into account the capabilities of the Digital Industry 4.0 mechanisms to a small extent, including the case of providing the necessary financial assistance to all economic entities.The work of Islamic financial institutions is directly related to real business, therefore, in the case when small and medium–sized enterprises do not have financial and other opportunities, including in the case of restrictive measures introduced by governments, to interact with their financial institutions, the financial regulators of the country together with the management of banks should develop a number of plans for overcoming the current situations, taking into account the goals of Sharia (Maqasid al–Shari’ah).The list of standard anti�crisis products for the financial market is confined to social Sukuk, Qard al–Hasan, Zakat, Waqf, however, taking into account the fact that it is crisis situations that provide a good opportunity for the development of new directions (products, services), the market of Islamic financial instruments needs to switch to FinTech solutions, especially since the forecasts of the countries of the Arab region on this direction show positive dynamics and tremendous potential.

scholarly journals THE NATURE OF RISK IN ISLAMIC FINANCIAL INSTITUTIONS

2017 ◽  
Vol 2 (1) ◽  
Author(s):  
Putri Reno Kemala Sari
Keyword(s):  
Risk Management ◽  
Financial Institutions ◽  
Financial Distress ◽  
Primary Sources ◽  
Financial Industry ◽  
Financial Organization ◽  
Islamic Financial Institutions ◽  
New Interpretation ◽  
Recommendation Strategy ◽  
New Evidence

Islamic financial institutions are a risky business and several risk factors have been identified as critical to ensure that the Islamic financial institutions position remain intact amid the intense competition in the industry. The survival and success of a financial organization depends critically on the efficiency of managing risks. More importantly, good risk management is highly relevant in providing better return to the stakeholders. In addition, prudent risk management by financial institutions is the hallmark to avoid financial distress that could lead to financial crisis. This research aims to identify the types of risk in Islamic Financial Institutions. This research is using qualitative method to collect and analyze the data through direct observation and documentation study. The findings in this study offers a new interpretation of the primary sources that significantly introduce substantial new evidence and findings that would be beneficial for players in the Islamic industry, including policymakers and regulators to develop, enhance and improve the Risk Management. Furthermore, the study hopes to contribute in terms of recommendation strategy to strengthen and knowing the risk of the Islamic Financial Institutions so as to increase the overall competitiveness in the Islamic Financial Industry.

scholarly journals HOW FEASIBLE A CONVERTIBLE IJARAH CONTRACT FOR SME’S FINANCING: A SIMULATION APPROACH

2019 ◽  
Vol 5 (2) ◽  
Author(s):  
Zuliani Dalimunthe ◽  
Akhmad Syakhroza ◽  
Mustafa Edwin Nasution ◽  
Zaafri Ananto Husodo
Keyword(s):  
Financial Performance ◽  
Financial Institutions ◽  
Economic Performance ◽  
Business Sector ◽  
Simulation Approach ◽  
Short Term ◽  
Islamic Financial Institutions ◽  
Main Input ◽  
Almost All

Islamic financial institutions have relied for decades on margin-based contracts toprovide financing for the business sector, despite the basic idea that Islamic financeis expected to provide an equity-based or a profit and loss sharing (PLS) contract.This fact raises the need to encourage the use of a margin-based instrument with aninnovative scheme that allows for conversion of the contract into a PLS-based contract.Moreover, we propose a convertible ijarah contract to fill this need. A convertible ijarahcontract is an ijarah (rent) contract that is convertible to a PLS contract according tothe Islamic financier’s decision. In this study, we simulate three scenarios of projectfinancing with (a) murabaha as a margin-based contract, (b) musharaka as a PLScontract and (c) a convertible ijarah contract. The aim is to evaluate whether theconvertible ijarah contract will provide a higher return for the financier compared to theother contracts. The main input of the simulation is nine sectors of Indonesian SMEs’financial performance. We found that when the financial performance of IndonesianSMEs was measured by short-term financial performance, the convertible ijarahcontract outperformed the murabaha contract for all sectors but did not outperformthe musharaka contract, except for low-margin sectors. However, when the financialperformance of Indonesians SMEs was measured by long-term economic performance,we found that the convertible ijarah contract outperformed the murabaha contract andmusharaka contract for almost all sectors.

scholarly journals Islamic finance: An Attractive New Way of Financial Intermediation

2013 ◽  
Author(s):  
Munawar Iqbal
Keyword(s):  
Financial Institutions ◽  
Financial Intermediation ◽  
Financial Instruments ◽  
Financial Industry ◽  
Successful Operation ◽  
A Value ◽  
Islamic Financial Institutions ◽  
Market Needs ◽  
Conventional Banks ◽  
Basic Features

Financial intermediation is a value-enhancing service. Banks are among the most important financial institutions in a modern economy for that service. Conventional banks use rates of interest (charged to clients and paid to depositors) on both the assets and the liabilities sides. Since interest is prohibited in Islam, Islamic financial experts have developed a number of financial instruments that avoid any involvement in interest. They take the form of either risk-and-reward sharing or trading in commodities/assets to price assets. In this paper we describe the basic features of the most important among these financial instruments. Even though Islamic banks emerged in response to market needs of Muslim clients, they are not religious institutions. Like other banks, these are profit seeking institutions, simply following a different model of financial intermediation. While it is the preferred way of banking for one fifth of humanity, it offers a wider choice of financial products to all by generating a number of benefits for the society. The successful operation of Islamic financial institutions has proven that this new model of financial intermediation is not only viable, but in many aspects, it is rather superior to the conventional model. The appealing features of the Islamic model have attracted world-wide attention. Islamic financial industry which started as a niche market in early 1970s in the Middle East has made a place for it in more than fifty countries around the globe and has grown into a multi-trillion dollars industry. This paper attempts to explain the basic features of this fascinating model.  

Shari’ah issues, challenges, and prospects for Islamic derivatives: a qualitative study

2016 ◽  
Vol 8 (2) ◽  
pp. 168-190 ◽  
Author(s):  
Muhammad Rizky Prima Sakti ◽  
Ahmad Syahid ◽  
Mohammad Ali Tareq ◽  
Akbariah Mohd Mahdzir
Keyword(s):  
Financial Institutions ◽  
Foreign Currency ◽  
Risk Mitigation ◽  
Financial Industry ◽  
Structured Interviews ◽  
Content Type ◽  
Banking And Finance ◽  
Finance Industry ◽  
Derivative Instruments ◽  
Islamic Financial Institutions

Purpose The purpose of this study is to investigate shari’ah scholars’ views and experiences pertaining the shari’ah issues, challenges and prospects in Islamic derivatives. Specifically, this paper critically examines the criticisms toward conventional derivative instruments and the controversies surrounding underlying contracts and current Islamic derivative products. Design/methodology/approach This study uses qualitative methods to form a deeper understanding of shari’ah scholars’ perception and experience on Islamic derivatives. Semi-structured interviews were conducted with five shari’ah scholars who are currently working in Islamic financial institutions in Malaysia and Singapore. This study used phenomenological techniques for its data analysis. Findings This study has found that shari’ah scholars are aware of the shari’ah issues surrounding Islamic derivatives and have provided comprehensive insight on the solution to these issues. It was found that it is important to take into account the derivatives instruments in Islamic financial industry because of the need for hedging and risk mitigation within Islamic financial institutions. Nonetheless, the study has also found that the use of wa’ad contracts to structure Islamic profit rate swaps and foreign currency exchanges are problematic because of it having features of bay’ al-kali’ bil-kali (the sale of one debt for another). Originality/value This study is one of few studies that highlight the shari’ah issues of Islamic derivatives in Islamic banking and finance industry. This paper is of value in discussing risk management and Islamic derivatives in Islamic financial institutions and how there are many issues under the investigation process, particularly issues related to controversial underlying contracts and products.

scholarly journals ANALISIS FIQH MUAMALAH TENTANG HYBRID CONTRACT MODEL DAN PENERAPANNYA PADA LEMBAGA KEUANGAN SYARIAH

2014 ◽  
Vol 10 (2) ◽  
Author(s):  
Ali Amin Isfandiar
Keyword(s):  
Financial Institutions ◽  
Hybrid Models ◽  
Islamic Banks ◽  
Financial Industry ◽  
Contemporary View ◽  
Islamic Financial Institutions ◽  
Financial Transactions

This paper is intended to analyze philosophically about the existence of a hybrid contract (english) or al-‘Uqûd al-Murakkabah (Arabic) or multiakad (Indonesia). Search focused on the opinion of scholars of hadith and fiqh (muamalah), as well as its application in Islamic Financial Institutions. This is important, because, in the form of a single contract is not able to respond to contemporary financial transactions which always move and are affected by the financial industry both nationally, regionally and internationally. By using qualitative and literature method, the study concluded that, firstly, fiqh muamalah contemporary view of the hadith related to contract hybrid models lead to the editorial about the ban of bai’ataini fi bai’atin (two sale and purchase in the sale), ban of shafqataini fi shafqatin (two agreements in the deal) and the prohibition of bay’ and the salaf (sale and purchase agreement and ordering of goods), secondly, the construction of contract hybrid models in Islamic banks is addressed to the construction of al- ‘Uqûd al-Mutaqâbilah (dependent or conditional contract), which implemented on Guarantee Bank (BG), and al-‘Uqûd al-Mujtami'ah (same type contract), which implemented on the Housing Financing.

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