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Governance, Risk, and Compliance Handbook: Technology, Finance, Environmental, and International Guidance and Best Practices by Anthony Tarantino

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CHAPTER 43

ISLAMIC FINANCE

Sabah M. Ali Mahmoud

43.1 INTRODUCTION

(a) General

(b) Basis of Shariah Rules

(c) General Shariah Principles

43.2 SHARIAH BUSINESS RULES

(a) Trade 579

(b) Contracts in Shariah

43.3 USURY (RIBA) AND INTEREST

(a) Prohibition of Usury

(b) Interest

43.4 ISLAMIC FINANCE

(a) Development and Expectations

(b) General Principles

(c) Investment Products

(i) Deposits (Wadiah)

(ii) Investment Finance (Mudarabah)

(iii) Partnership (Musharakah)

(iv) Resale Contracts (Murabahah)

(v) Lease to Own (Ijarah)

(vi) Fabrication Finance (Istisna'a)

(vii) Bonds (Sukuk)

(viii) Islamic Equity Funds

(ix) Benevolent Loans (Qard Hassan)

(x) Sales Contracts (Bay')

(xi) Joint Liability (Takaful)

43.5 JORDAN ISLAMIC BANK FOR FINANCE AND INVESTMENT

(a) Background and Incorporation

(b) Ideological Concepts and Objectives

(c) Investment Functions and Products

(i) Deposits

(ii) Profit and Loss Sharing Certificates (Quradh/Mudharabah)

(iii) Joint Ventures (Musharakah)

(iv) Sales (Bay'ou)

(v) Fabrication Finance (Istisna'a)

(vi) Lease to Own (Ijarah)

(vii) Foreign Investments

(d) Commercial Papers

(i) Bank Guarantees

(ii) Letters of Credit

(iii) Discounting Commercial Papers

43.6 CONCLUSIONS

NOTES

REFERENCES

43.1 INTRODUCTION

(a) GENERAL

In today's world dominated by globalization, technological and communications advances, expanding world trade, and investments, there seems to be a resurgence of the application of basic principles of shariah in Muslim countries, particularly in financial ...

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