... the traditional Islamic culture predominates, with Qur’anic Law playing an active role in the day-to-day life in the country. ARAB WORLD VIEW: An Arab worldview is based upon six concepts: atomism, faith, wish versus reality, justice and equality, paranoia and the importance of family over self: · Atomism. Arabs tend to see the world and events as isolated incidents, snapshots, and particular moments in time. This is a key psychological feature of Arab culture. Westerners look for unifying concepts whereas Arabs focus on parts, rather than on the whole. It also means the Western concept of cause and effect is rarely accepted by Arabs who may not necessarily see a unifying link between events. They do, however, maintain a long-term memory over actions and events. It is important to point out that it is memory, not necessarily history that is important. · Deep belief in God. Arabs usually believe that many, if not all, things in life are controlled by the will of God (fate) rather than by human beings. What might appear as fatalism initially is more deeply a belief in God's power, sovereignty, active participation in the life of the believer, and authority over all things (business transactions, relationships, world events, etc.). · Wish versus reality. Arabs, much more so than Westerners, express emotion in a forceful, animated and exaggerated fashion. Their desire for modernity is contradicted by a desire for tradition (especially Islamic...
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...This paper will explore crucial judicial developments and legislative reforms within each of the traditions of Common law, Civil law, Islamic law and International law and how the key elements have forged the evolutionary journey towards uniformity of rules. Similarities and stark differences in the approach of the four abovementioned legal systems will be noted in an effort to verify which, if any, of the legal systems have achieved uniformity of rules. The extent to which uniformity of rules was lacking originally will also be examined. To inform the analysis of ‘uniformity of rules’ the Oxford Dictionary definition for uniform will be used. ie ‘not varying; the same in all cases and at all time’.[1] Therefore by extrapolation the understanding of ‘uniformity of rules’ will be taken to mean that the same rules should be applied to the same or, perhaps similar set of circumstances and by so doing the same outcomes should be achieved. This broad yet specific and quite literal conjecture will be used as a frame of reference for the following discussion. In England prior to the Norman Conquest of 1066 AD local customary law prevailed. At this time customary law could be viewed as perhaps being uniform to the extent that it was the type of law applied throughout the land however, customs differed from one locality to the next. Subsequently, there was no consistency in customary rules across the board per se, nor in how they were applied.[2] Cook et al suggest that...
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...TRANSACTIONS IN ISLAMIC LAW I TUTORIAL QUESTIONS 2 Mahal al-‘Aqd – Subject Matter of Contract: 1. (i) A Proton Waja car belonging to Saiful was stolen in April 2004 from a parking lot in Kuala Lumpur. Saiful lodged a report with the police promptly, but was not successful in recovering the vehicle. In June 2004, he gifted the car the whereabouts of which was still unknown to his friend Azhar. The car was found intact in July 2004. Upon being demanded by Azhar to handover the car, Saiful refused to deliver the car arguing that the previous contract of gift was not valid. Discuss. (7 marks) Sem I, 2004/2005 2. (i) Islamic law prescribes that the subject matter of a contract should fulfil certain conditions. State these conditions, and out of these, describe the two conditions that the subject matter should be identified with certainty and be capable of being readily delivered. (7 marks) Sem II, 2004/2005 3. Decide the validity of these contracts with the reasons for their validity or otherwise. (i) Iman sold a personal computer to Abu, but she was unsure about its specifications. (3 marks) (ii) Bank A sold a house to Aminah with two options of payment: RM20,000 if the payment is to be made in two years, or RM30,000 if the payment is to be made in 3 years, and it was accepted by Aminah. (3 marks) (iii) Abu paid a diver for 10 kg of fish that he will catch from Pedu lake. (3 marks) (iv) Omar pays a diver for whatever he may catch for him from Pedu lake on next Friday...
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...Authority in Islamic Law: The Islamic Law of Inheritance in Modern Muslim States Yasir Billoo This working paper is hosted by The Berkeley Electronic Press (bepress) and may not be commercially reproduced without the permission of the copyright holder. http://law.bepress.com/expresso/eps/12 Copyright c 2003 by the author. Change and Authority in Islamic Law: The Islamic Law of Inheritance in Modern Muslim States Abstract In traditional Islamic law, the sole repositories of law were the individual muslim scholars and their schools of law, not the Muslim state. This tradition has continued until today, even in the most modern Muslim states. In light of a fast-paced, modern world and heightened international scrutiny of Islamic law, reforms must be made in the traditional system. This paper suggests that the best reform would be to treat the traditional Islamic law as a common law for all Muslim states. With that foundation, the legislatures of those nations can bring about change in their respective countries, while keeping intact the authenticity and authority of the law. The scholars would be repositories of only this common law, further developing undeveloped principles and issuing opinions with which the legislature can work, and the states would be the repositories of modern state law. It is through this readjustment of the Islamic legal structure that the law will retain any relevance in the lives of its followers. Change and Authority in Islamic Law: The Islamic Law...
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...* Principles of Islamic banking Islamic banking refers to a system or banking activity that is consistent with the Islamic jurisprudence [arab. fiqh] based on the principles of the Sharīʿah. Literally, it may be translated with “Path to the water of source”, rendering the “right” way that Allah has carved out for all Muslims. Main sources of the the Sharīʿah are the Qur’an and the Sunnah. Basic aims of the Sharīʿah are the spread of wisdom and welfare through transferring faith including beliefs and practices. In addition, in the past centuries Islamic religious scholars and jurists have been developing its practical application [arab. fatwa] to a system of instructions; some of them find their way into the constitutions of Arabic countries like Kuwait. Today Islamic jurisprudence is a code of conduct that on the one hand regulates the relationship between Allah and the mankind [arab. ʿibādāt] and on the other hand the economic and interpersonal relationship between individuals [arab. mu’amāt]. Since the entire legal framework of Islamic banking is codified in the Sharīʿah, every Islamic bank in the GCC region and the majority of the remaining Islamic banks worldwide have an in-house Sharīʿah -board that audits the compatibility of the banks’ products and services with the restrictions imposed by the Islamic law. In the following, the main principles of Islamic banking are explained. * Prohibition of riba, gharar and maysir (Qur’an 4:161) The first and most important feature...
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...About Al Baraka | | Al Baraka Islamic Bank B.S.C. (c) - Bahrain (AIB - Bahrain) established 1984 in Bahrain and up the years has pioneered the development of Islamic banking and finance. The Bank is registered with the Bahrain Ministry of Industry &, Commerce CR no. 14400 and is licensed by Central Bank of Bahrain (CBB) as an Islamic Retail Bank, with an authorized capital of US$ 600 Million, of which US$ 122 Million has been issued and fully paid.AIB - Bahrain is one of the Banking Units of Al Baraka Banking Group's (ABG). ABG is a Bahraini Joint Stock Company listed on Bahrain and Dubai stock exchanges and one of the well-known leading international Islamic banks. It has been rated by Standard & Poor's as BBB- with a short-term rating of A-3. ABG offers retail, corporate and investment banking and treasury services strictly in accordance with the principles of the Sharia'a. The authorized capital of ABG is US$1.5 billion, while the total equity amounts to about US$ 1.8 billion. The Group has a wide geographical presence in the form of subsidiary banking Units in 14 countries, which in turn provide their services through more than 400 branches. These banking Units are Jordan Islamic Bank/ Jordan, Al Baraka Islamic Bank - Bahrain, Al Baraka Bank Limited/ Pakistan, Banque Al Baraka D'Algerie/ Algeria, Al Baraka Bank Sudan/ Sudan, Al Baraka Bank Ltd/ South Africa, Al Baraka Bank Lebanon/ Lebanon, Al Baraka Bank Tunisia/ Tunisia, Al Baraka Bank Egypt/ Egypt, Al Baraka...
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...RISK MANAGEMENT IN ISLAMIC BANKING AND FINANCE: THE ARAB FINANCE HOUSE EXAMPLE Bilal A. Fleifel A Thesis Submitted to the University of North Carolina Wilmington in Partial Fulfillment of the Requirements for the Degree of Master of Business Administration Cameron School of Business University of North Carolina Wilmington 2009 Approved By Advisory Committee Howard Rasheed Cetin Ciner William H. Sackley Chair Accepted By DN: cn=Robert D. Roer, o=UNCW, ou=Dean of the Graduate School & Research, email=roer@uncw. edu, c=US Date: 2010.01.21 15:02:51 -05'00' ________________________ Dean, Graduate School TABLE OF CONTENTS TABLE OF CONTENTS ..................................................................................................... ii ABSTRACT........................................................................................................................ vi ACKNOWLEDGMENTS .................................................................................................. vii DEDICATION .................................................................................................................. viii LIST OF TABLES .............................................................................................................. ix LIST OF FIGURES...............................................................................................................x GLOSSARY .............................
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...History banks Part 1 changes in executive mgt and shariah advisory board Qualification of top mgt and mgt team Part 2 changes in banking philosophy or principles Mision vision obj corporate strategy Part 3 changes in banking practices and practical application of islamic bank Implement islamic or not Trading activities Product Annual reports Donation Sponsorship Part 4 problem Effect Solution Financial statement PART ONE Board of Directors | | Mr. Salah Mohd I Al Jaidah Chairman | | Dr. Saleh Jameel Malaikah Deputy Chairman | | | | Dr. Fouad Hayel Saeed Director | | Mr. Shahzad Shahbaz Director | | | | Mr. Subrata Kumar Mitra Director | | Mr. Syed Maqbul Quader Director | | | | | | | | | Dato’ Dr Md Khir Bin Abdul Rahman Independent Non Executive Director | | Dato’ Noorazman Bin Abd Aziz Independent Non Executive Director | | | | Dato' Sri Dr. Muhammad Shafee Bin Muhammad Abdullah Independent Non Executive Director | | | | Management Team | | | Datuk Mohamed Azahari Kamil Chief Executive Officer | | | | | | Roslan Hj Shafiei Chief Operating Officer | | | Abdul Latif Bujang Masli Chief Financial Officer | | | | | | Sharifah Normah Acting Head, Risk Management | | | Azidy Bin Daud Treasurer | | | | | | Faris Yahya Head, Investment Banking | | | Zamri Shariff Head, Asset...
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...Islamic Banking: Answers to Some Frequently Asked Questions 9 ISLAMIC DEVELOPMENT BANK ISLAMIC RESEARCH AND TRAINING INSTITUTE ISLAMIC BANKING: ANSWERS TO SOME FREQUENTLY ASKED QUESTIONS Mabid Ali Al-Jarhi and Munawar Iqbal Occasional Paper No.4 1422H 2001 Mabid Al-Jarhi and Munawar Iqbal 10 Islamic Banking: Answers to Some Frequently Asked Questions 11Mabid Al-Jarhi and Munawar Iqbal 12 Islamic Banking: Answers to Some Frequently Asked Questions 13 FOREWORD In the last quarter of a century, there has been a great interest in the Islamic banking system both at private and public levels. There is an earnest and widespread desire to understand the system. Academicians, bankers and general public, all, have some genuine questions and concerns. Policy makers in the monetary and financial sectors of the IDB member countries have also often asked the Islamic Research and Training Institute (IRTI) some basic questions of theoretical and practical importance about the elimination of interest from the national economies of Muslim countries and the transformation of the prevailing conventional system to an Islamic one. Some of these questions reflect a desire to understand the basic concepts of Islamic finance while others relate to the creation of an enabling environment through macroeconomic reform and structural adjustments that are needed to establish the Islamic financial system and the complications that arise when an effort is made to bring about the transformation...
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..............................................7 3. Understanding Riba ...........................................................10 3.1 A world shaped by Riba.................................................... 10 3.2 What is Riba? ................................................................. 11 4. The Misunderstanding of Riba............................................20 4.1. Religious reformism and capitalism ................................... 20 4.2 The Islamic Reformers ..................................................... 23 4.3 The followers of Reda ...................................................... 27 4.4 The misunderstanding of Riba an-nasiah today.................... 28 4.5 Equating Riba to interest in a loan ..................................... 33 4.6 Islamic Banking .............................................................. 34 4.6.1 Islamic Banks are banks ............................................. 34 4.6.2 Murabaha: what it is and what it is not ......................... 38 4.6.3 How the Islamic Bank’s version of the contract of Murabaha came into being ................................................................. 41 4.6.4 The danger of making principles out of contracts............ 46 4.7 The Stages of the “Islamisation” process ............................ 48 4.8 On the methodology of modernism .................................... 49 5. Understanding Paper Money ..............................................54 5.1 Paper money backed by gold and...
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...1.0 Abstract Islamic Finance is an abstract concept until the first half of the twentieth century. In Malaysia, it has been almost three decades when the first Islamic bank makes its debut. Islamic banks have to compete with its competitors which is a conventional banks which have longer history than Islamic banks. For this competition, Islamic Finance have to know the awareness, understanding and perceptions of Malaysians towards it. Islamic Finance not only available for Muslims, but it also available for non-Muslims as well. In Malaysia, 40% of the population is non-Muslims and hence non-Muslims market is equally important to Islamic Finance (Bashir & Mail, 2011; Latiff, 2007). The purpose of this research is to examine the level of awareness, understanding and perceptions of Muslims in Malaysia of Islamic Banking products and services. In additional, this study also aims to investigate if any demographic influence it’s means the structure of population of the awareness, understanding and perceptions of Islamic Finance products and services among Muslims in Malaysia. A total of 50 respondents from different course and carrier in Unikl are selected for the purpose of this study. For the analysis, we used the primary data and Secondary data was adopted to analyse the results. The results show that more than half of the respondents are aware of the Islamic Finance in Malaysia but they do not aware of most of the products and services offered by Islamic banks. Muslims understanding...
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...Islamic Finance is a financial system that doesn’t work like other conventional banking systems. It follows the Islamic law, Shariah, which doesn’t allow certain aspects of a normal banking system such as usury and speculation. There are some main principles to be followed in Islamic banking. First of all, it prohibits interest, or Riba. Riba is forbidden in Islam, and therefore Islamic banking system adopts the principle of profit and loss sharing. It also prohibits uncertainty, gambling, and prohibits certain products and industries such as alcohol and tobacco. Islamic Finance needs to be in accordance with the Shariah. All products and contracts follow Islamic principles that conventional financial systems do not, such as interest and risk sharing, and uncertainty. Conventional financial systems have never worked this way and it worked for them for many years until they were hit by the financial crisis. The crisis had a minimal impact on the Islamic financial systems because they did not comply with all the factors that created the crisis in the first place. There were 3 main factors in the creation of the financial crises. First, subprime loans, which was lending to certain people who did not have a good credit history and were bound to default. The banks than charged them with higher rates that increased their risk of defaulting. Secondly, there was securitization, which was creating securities from un-liquid assets. This process is used by banks to create securities from...
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...THE AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILIPPINES, AUTHORIZING ITS CONDUCT OF ISLAMIC BANKING BUSINESS, AND REPEALING FOR THIS PURPOSE PRESIDENTIAL DECREE NUMBERED TWO HUNDRED AND SIXTY-FOUR AS AMENDED BY PRESIDENTIAL DECREE NUMBERED FIVE HUNDRED AND FORTY-TWO (CREATING THE PHILIPPINE AMANAH BANK) Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:: WHEREAS, the State, in Section 20, Article II of the Constitution, encourages private enterprise and provides incentives to needed investments; WHEREAS, under the Constitution, the use of property bears a social function so that the consequences in law also must be defined by policy objectives related to property rights in productive enterprises; WHEREAS, toward this end, the Government has committed itself to the establishment of an Islamic bank that operates within a legal framework permitting the investors or participants the rights to equitable or beneficial share in the profits realized from financing productive activities and other operations: Now, therefore. THE CHARTER OF THE AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILIPPINES Section 1. Title. - This Act shall be known as "The Charter of the Al-Amanah Islamic Investment Bank of the Philippines." ESTABLISHMENT AND FUNCTIONS Section 2. Name, Domicile and Place of Business. - There is hereby created the Al-Amanah Islamic Investment Bank of the Philippines, which shall be hereinafter called the Islamic Bank.ts principal...
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...Islamic Banking and Finance: History Development Slide #1 Some Issues History Of IBF Development of IBF -Overview- 2. Islamic Banking and Finance: History and Development History and Development of IBF in Bahrain Full Fledged IB vs. IB windows • Word ‘bank’ comes from the word ‘banco’ - A table or a bench on which Italian money-changers used to display their monies and records and conduct their transactions History of Islamic Banking and Finance • Arabic financial and economic system preIslam – Trading based arrangements were common • Bay’ al-musawamah (bargaining) • Bay’ al-muzayadah (auctioning) • Bay’ al-amanah (trust sale) – Al-murabahah (resale with profit) – Al-tawliyyah (resale at cost) – Al-wadiah (resale at loss or below cost) History of IBAF- (2) – Barter trade was common – Al-sarf (money exchange) • Lack of standardization – for e.g., 10 grams of gold in coin form = 15 grams of gold in bracelet form – Institutionalization of riba – Widespread gharar and maysir – Monopoly, fraud and economic injustice was common History of IBAF- (3) • With the advent of Islam, – Eradication of riba institutions and practices – Eradication of gharar transactions – Institutionalization of fair and equitable markets • No monopoly, fraud • Standardization of money and commodity exchanges – Hadith on the six commodities – Islamization of many business organizations and institutions • Mudarabah, musyarakah, salam, muzara’ah (sharecropping or partnership...
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...tenPOTENTIAL ISLAMIC CERTIFICATES FOR RESOURCE MOBILIZATION MOHAMED EL-HENNAWI* 1. INTRODUCTION The development of financial instruments has become an essential ingredient for the economic development of Islamic countries, most of which are underdeveloped. The absence of these instruments, together with the problem of limited resources and skills which are necessary to cope with the growing investment needs, tends to hinder the development process of these countries. Islamic countries need to stimulate higher domestic savings rates and to efficiently channel the savings into productive investments, as a precondition for accelerating economic growth. This calls for the development of relatively advanced financial markets with all the relevant components, such as new financial institutions, securities markets, etc. Islamic banks, national and international, have recently come into existence to play an important intermediary role in pooling savings, especially from small investors, and channelling them into productive investments. This role has been constrained, to a great extent, by the absence of capital markets and financial instruments based on shari'ah. Islamic banks, therefore, have embarked on a serious effort to develop their own instruments for mobilizing the funds of the Islamic Ummah and using them to foster economic and social development of the ummah. To be more specific, some of these banks suffer from excess liquidity, for which no suitable placements...
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