scholarly journals Islamic banking

2021 ◽  
pp. 275-287
Author(s):  
Christian Castro
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Islamic Law ◽  
Islamic Banking ◽  
Investment Funds ◽  
Banking And Finance ◽  
Financial Products ◽  
The World ◽  
Globalized World ◽  
The U.S

In recent years the rise of Islamic banking has been one of the most important trends in the economic sphere, with an estimated 1.5 billion Muslims in the world, this arena has plenty of room for expansion. Conforming to Shariah (Islamic Law) puts a huge demand among Muslims looking for financial products and services that adhere to their beliefs. If it weren’t for the creation of such alter-natives to conventional banking and finance, Muslims would find it hard to participate in our globalized world without violating their religious principles. There are currently over 300 financial Institutions across the global sphere providing some type of Islamic financial product. According to some experts, the assets that are currently being managed under Shariah law, which range from investment to commercial banks and investment funds, are estimated to be no less than 300 billion. Other experts in the industry estimate the assets under mana-gement to be much larger. The FSA (Financial Services Authority), a regulator for financial services based out of London, estimates the total amount associated with Shariah banking to be as much as 500 billion. Even the U.S rating agency, S & P, estimates the sukuk (deed) market has reached over 75 billion and will likely be over 150 billion by the end of the decade. It used to be that Islamic fi-nancial products were more of a niche market but over time they are now considered mainstream, with many well-known interna-tional financial institutions battling to get a little piece of the pie.

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>

scholarly journals Banking Governance: Whats Special About Islamic Banks?

2015 ◽  
Vol 31 (4) ◽  
pp. 1621 ◽  
Author(s):  
Faten Ben Bouheni ◽  
Chantal Ammi
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Islamic Law ◽  
Banking Industry ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Implicit Contracts ◽  
Conventional Banks ◽  
The U.S ◽  
The Eu

Recent turmoil and financial institutions failures in the U.S and in the EU have led to a renewed interest in corporate governance. Thus, the ultimate decisions taken to out of the crisis were to review the mechanisms of banking governance. The Islamic banking may use the same governance mechanisms as a conventional bank, in addition to the Shariah boards, the Shariah review unit, the Islamic International Rating Agency (IIRA) and, the Islamic Financial Services Board (IFSB) like main bodies of monitoring the Islamic Banking industry. In contrast to the conventional banks, the Islamic banks are based on the active participation of public policy institutions, regulatory and supervisory authorities, and Shariah authorities. These institutions collectively monitor the performance of the firm and its faithfulness and commitment to explicit as well as implicit contracts. Islamic banking designates banking activities, which are conforming to Islamic law (Shariah) and guided by Islamic economics. In particular, Islamic law prohibits usury and payment of interest (Riba), it also prohibits investing in businesses that are considered unlawful. And the competitiveness of many of Islamic products and the PLS principle attract Muslim and non-Muslim investors.

scholarly journals Towards New Sharia Governance for Islamic Financial Institutions

2021 ◽  
Vol 18 (1) ◽  
pp. 39-58
Author(s):  
Abdulazeem Abozaid
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Financial Institution ◽  
Islamic Banking ◽  
Banking And Finance ◽  
Finance Industry ◽  
Regulatory Authorities ◽  
Governance Model ◽  
Islamic Financial Institutions ◽  
Shariah Governance

Since its inception a few decades ago, the industry of Islamic banking and finance has been regulating itself in terms of Sharia governance. Although some regulatory authorities from within the industry, such as Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and Islamic Financial Services Board (IFSB), the Islamic banking and finance industry remains to a great extent self-regulated. This is because none of the resolutions or the regulatory authorities' standards are binding on the Islamic financial institution except when the institution itself willingly chooses to bind itself by them. Few countries have enforced some Sharia-governance-related regulations on their Islamic banks. However, in most cases, these regulations do not go beyond the requirement to formulate some Sharia controlling bodies, which are practically left to the same operating banks. Furthermore, some of the few existing regulatory authorities' standards and resolutions are conflicted with other resolutions issued by Fiqh academies. The paper addresses those issues by highlighting the shortcomings and then proposing the necessary reforms to help reach effective Shariah governance that would protect the industry from within and help it achieve its goals. The paper concludes by proposing a Shariah governance model that should overcome the challenges addressed in the study.Pada awal berdiri, Lembaga Keuangan Syariah merupakan lembaga keuangan yang menerapkan Hukum Syariah secara mandiri dalam sistem operasionalnya. Ia tidak tunduk pada peraturan lembaga keuangan konvensional, sehingga dapat terus berkomiten dalam menerapkan Hukum Syariah secara benar. Selanjutnya, muncullah beberapa otoritas peraturan yang berasal dari pengembangan Lembaga Keuangan Syariah. Diantaranya adalah Islamic Financial Services Board (IFSB) dan Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). Hal ini tidak menyimpang dari kerangka peraturan Hukum Syariah, sebab standar peraturan dan keputusan yang dikeluarkan ditujukan khusus untuk Lembaga Keuangan Syariah saja. Beberapa Negara telah menerapkan peraturan tata kelola Hukum Syariah pada Bank Syariah mereka. Namun dalam banyak kasus, peraturan yang diterapkan tidak mampu mengontrol Lembaga Keuangan Syariah tersebut secara penuh. Sehingga, secara praktis proses pengawasan diserahkan kepada lembaga keuangan yang beroperasi. Akan tetapi, beberapa standar dan keputusan yang dikeluarkan oleh sebagian pemangku kebijakan bertentangan dengan keputusan yang dikeluarkan oleh beberapa akademi Fiqh. Artikel ini ditulis untuk menyoroti permasalahan yang timbul pada tata kelola Lembaga Keuangan Syariah, khususnya kekurangan yang tampak pada sistem tata kelola. Kemudian, penulis akan mengajukan usulan tentang efektifitas tata kelola Lembaga Keuangan Syariah yang bebas dari permasalahan.

scholarly journals Dimensi Charity Perbankan Syariah

2020 ◽  
Vol 1 (2) ◽  
pp. 162-169
Author(s):  
Saiful Bahri
Keyword(s):  
Financial Institutions ◽  
Islamic Law ◽  
Descriptive Analysis ◽  
Islamic Banking ◽  
Way Of Life ◽  
Simple Method ◽  
The World

There are too many words of Allah in the Qur'an regarding donations and alms, at the same time it states that this charity instrument is a fundamental and principal variable in Islamic law which is actually a way of life. The urgency of charity is not only for individuals, but also very useful for financial institutions such as Islamic banking. With the intensification and extensification of charity, it is imperative that these financial institutions gain good blessings in the world, especially for bankers in the afterlife. With a simple method, namely descriptive analysis, this study describes as few facts as the authors know and understand in order to become a source of inspiration for the next good.

Seeking specific relief in cases of Islamic banking in Malaysia – an analysis

2018 ◽  
Vol 60 (2) ◽  
pp. 325-341
Author(s):  
Aishath Muneeza
Keyword(s):  
Financial Services ◽  
Islamic Law ◽  
General Rule ◽  
Islamic Banking ◽  
Content Type ◽  
Legal Principles ◽  
Banking And Finance ◽  
Muslim Countries ◽  
Library Research ◽  
Civil Codes

Purpose Often, the application of specific relief to Islamic banking is unspoken and unwritten. However, few studies suggest that legislation on specific relief needs amendment to cater for the effective application of Islamic banking and finance in the country and proposing the idea to introduce an Islamic Specific Relief Act. This paper aims to understand the application of specific relief to Islamic banking in Malaysia. This paper will look at the application of specific relief in Malaysia and discuss the extent of its application to Islamic banking cases reported in Malaysia from 1983 to 2015. The study will shed light on the general types of specific relief from Malaysian and Islamic law perspectives to conclude whether the provisions of Malaysian specific relief law invoked in courts in Islamic banking cases are in line with the general principles of Sharīcah. To further support this, evidence from various commercial civil codes of Muslim countries have been discussed to analyse these provisions from a more practical perspective. Design/methodology/approach This is a legal exploratory study primarily focussed on library research. Findings When it comes to Islamic banking, federal legislations dealing with commercial matters are applicable. For example, in Islamic banking products, if the land is the subject matter, then National Land Code 1965 shall be applied, and when dealing with Islamic banking agreements, the provisions of Contracts Act 1950 shall be followed. This has been highlighted as a problem faced by Islamic financial services in the case of Tan Sri Abdul Khalid Ibrahim v. Bank Islam Malaysia Berhad and other cases where the judge referred Engku Rabiah and quoted that in Islamic banking transactions, “the transactions entered by the parties may be Sharīcah-compliant in the first place, but upon enforcement of the contracts, the court may make orders and decisions that may side line the Islamic legal principles”. This happens when the substantive laws applicable to Islamic banking are incompatible with Islamic law. Fortunately, the analysis of the relevant sections of Specific Relief Act 1950 in this research proves that the provisions reviewed are in line with Sharīcah. However, to further enhance the operation of specific relief, the granting of specific relief could be made a general rule rather than an exceptional rule available with stringent rules. The research revealed that Specific Relief Act (1950) is expressly referred and discussed only in three cases reported from 1983 to 2015. There are only two specific sections of Specific Relief Act (1950) that have been deliberated in the reported case law on Islamic banking: provisions related to granting of a mandatory injunction and specific performance of contracts. Originality/value It is anticipated that this paper will assist to comprehend the importance of converging law and Sharīcah in legislations to attain Sharīcah compliance and will help to realise that not all conventional legislations are Sharīcah non-compliant.

scholarly journals Shortcomings and proposed reforms in the existing shariah governance of islamic banking

2020 ◽  
Vol 2 (1) ◽  
pp. 15-34
Author(s):  
Abdulazeem Abozaid
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Banking And Finance ◽  
Finance Industry ◽  
Regulatory Authorities ◽  
Islamic Financial Institutions ◽  
Shariah Governance

Since its inception a few decades ago, the Islamic banking and finance industry has been self-regulated with regards to Shariah governance. Despite the existence of certain regulatory authorities from within the industry, such as Accounting and Auditing for Islamic Financial Institutions (AAOIFI) and Islamic Financial Services Board (IFSB), none of their resolutions or standards are effectively binding. Few countries have enforced some rules related to Shariah-governance. Still, in most cases, these rules did not go beyond the requirement of formulating Shariah controlling bodies, which is practically left to the banks themselves. Islamic banks are almost left to choose or dismiss their Shariah controllers, and no clear criteria are set by any authority to ascertain the proper qualifications of the Shariah controllers. Moreover, some of the Shariah standards and fatwas are found to conflict with the established resolutions issued by Fiqh academies. These matter point to the deficiencies in the existing Shariah governance and hence the need to address them.

scholarly journals THE CONCEPT AND APPLICATION OF HIBAH AS A FINANCIAL INSTRUMENT FROM THE MALAYSIAN LEGAL PERSPECTIVE: AN ANALYSIS

2020 ◽  
Vol 28 (1) ◽  
pp. 227-252
Author(s):  
Rusni Hassan ◽  
Nor Azdilah Mohamad Zaizi
Keyword(s):  
Financial Institutions ◽  
Islamic Law ◽  
Legal Issues ◽  
Islamic Banking ◽  
Financial Instrument ◽  
Banking And Finance ◽  
Wealth Management ◽  
Legal Perspective ◽  
Islamic Financial Institutions ◽  
Popular Subject

The principle of hibah (gift) is a popular subject in the Islamic law of administration, relating to wealth management. Hibah is a solution to deliver wealth to non-heirs apart from the wasiyyah (bequest) or faraid (succession) systems. However, in the broader context of wealth management in Malaysia, hibah has also been used as a financial instrument in the Islamic financial institutions’ products and services. Based on that, the legality and enforcement of hibah with regards to the related applicable laws in the Malaysian legal system might be affected in two different situations. First, the conflict of jurisdiction may be arising from the fact that the matter of the classical hibah concept will be under the jurisdiction of the classical hibah concept will be under the jurisdiction of the States, whilst the commercial hibah which has been structured with the Islamic banking and takaful products and services established by the Islamic financial institutions, will be under the Federal government. The scarcity of literatures discussing hibah from the perspective of Islamic banking and finance contributes to the limited understanding and awareness among the society on this matter. In view of that, this study explores and analyse the concept and application of hibah as the financial instrument in the Islamic banking and takaful products and services. This study also analyzes some relevant Shari’ah and legal issues on the application of hibah in the Islamic banking and takaful products and services, which are currently practiced by the Malaysian Islamic financial institutions. This is done by assessing relevant statutes and decided cases. This article finally provides recommendations to improve and enhance the application of hibah as an Islamic banking and takaful products and services in Malaysia.

scholarly journals Usury (Riba) and the Place of Bank Interest in Islamic Banking and Finance

2009 ◽  
Author(s):  
M. Raquibuz Zaman
Keyword(s):  
Financial Institutions ◽  
Islamic Banking ◽  
Banking And Finance ◽  
The World

This paper examines the concept of usury or Riba as was understood at the time of the Prophet of Islam and his contemporaries in Mecca and Medina, and what differing interpretations of the term developed in succeeding centuries in Muslim populated countries of the world. It gives a brief summary of the concept of usury in Judaism and Christianity and how this term is equivalent of Riba in Islam. It demonstrates that Riba and interest are not synonymous terms, and that what Islam forbids is usury and not interest. It asserts that, although some interests are usurious, the claim by the contemporary Islamic Banking and Financial institutions, IBFIs, that these institutions are “Islamic” because the term is not used in their transactions, is misleading at best. It ends with the proclamation that true IBFIs are not only feasible, but also are inevitable to serve the needs of the Muslims around the world.  

Application of Statutes of Limitations to Islamic Banking: The Case of Malaysia

2020 ◽  
Vol 17 (1) ◽  
pp. 56-69
Author(s):  
Aishath Muneeza ◽  
Zakariya Mustapha
Keyword(s):  
Qualitative Research ◽  
Financial Institutions ◽  
Research Methodology ◽  
Islamic Law ◽  
Islamic Banking ◽  
Legal Action ◽  
Qualitative Research Methodology ◽  
The Right ◽  
Limitation Of Action ◽  
Insight Into

Limitations of action designate extent of time after an event, as set by statutes of limitations, within which legal action can be initiated by a party to a transaction. No event is actionable outside the designated time as same is rendered statute-barred. This study aims to provide an insight into application and significance of Limitations Act 1950 and Limitation Ordinance 1952 to Islamic banking matters in Malaysia as well as Shariah viewpoint on the issue of limitation of action. In conducting the study, a qualitative research methodology is employed where reported Islamic banking cases from 1983 to 2018 in Malaysia were reviewed and analysed to ascertain the application of those statutes of limitations to Islamic banking. Likewise, relevant provisions of the statutes as invoked in the cases were examined to determine possible legislative conflicts between the provisions and the rule of Islamic law in governing the right and limitation of action in Islamic banking cases under the law. The reviewed cases show the extent to which statutes of limitations were invoked in Malaysian courts in determining validity of Islamic banking matters. The limitation provisions so referred to are largely sections 6(1)(a) and 21(1) Limitations Act 1953 and section 19 Limitation Ordinance 1953, which do not conflict with Shariah viewpoint on the matter. This study will prove invaluable to financial institutions and their customers alike in promoting knowledge and creating awareness over actionable event in the course of their transactions.

Islamic Banking and Finance in Theory and Practice

2005 ◽  
Vol 22 (2) ◽  
pp. 69-86 ◽  
Author(s):  
Abdus Samad ◽  
Norman D. Gardner ◽  
Bradley J. Cook
Keyword(s):  
Financial System ◽  
Primary Objective ◽  
Theory And Practice ◽  
Islamic Banking ◽  
Relative Importance ◽  
Islamic Banks ◽  
Equity Financing ◽  
Banking And Finance ◽  
Financial Products ◽  
Islamic Bank

This paper’s primary objective is to identify the relative importance of various Islamic financial products, in theory and in practice, by examining the financing records of the Bank Islam Malaysia (Berhad) and the Bahrain Islamic Bank. Currently, seven available Islamic financing products are considered viable alternatives to interest-based conventional contracts: mudarabah (trust financing), musharakah (equity financing), ijarah (lease financing), murabahah (trade financing), qard al-hassan (welfare loan), bay` bi al-thaman al-ajil (deferred payment financing), and istisna` (progressive payments). Among these financial products, mudarabah and musharakah are the most distinct. Their unique characteristics (at least in theory) make Islamic banks and Islamic financing viable alternatives to the conventional interest-based financial system. The question before us is to determine the extent of mudarabah and musharakah in Islamic financing in practice. The data are as follows: the average mudarabah is 5% of total financing, and the average musharakah is less than 3%. The combined average of mudarabah and musharakah for the two Islamic banks is less than 4% of the total finance and advances. The average qard al- hassan is about 4%, while istisna` does not yet exist in practice. Murabahah is the most popular and dominates all other modes of Islamic financing. The average use of murabahah is over 54%. When the bay` bi al-thaman al-ajil is added to the murabahah, the percentage of total financing is shown to be 2.68%. This paper also explores some possible reasons why these two Islamic banks appear to prefer murabahah to mudarabah and musharakah.

Sign in / Sign up

Export Citation Format

Share Document