Islamic Finance Why It Makes Sense For You Understanding Its Principles And Practices 2nd Edition

Islamic finance has been growing faster than conventional finance for most of the past decade. It has done this on a model of finance that rejects interest and promotes profit sharing. How is this possible? Yet the wealth potential of Islamic finance is far from being its most attractive feature. What is most compelling about Islamic finance are its ethical principles and strong corporate governance based on Shariah law. This SECOND EDITION explains and updates how conventional financial products work — from mortgages and leases to trade finance and insurance — before delving into their Islamic versions and contains three new topics on microfinance, the ethical company and wealth successionAbout the Authors Daud Vicary Abdullah has been in the finance and consulting industry for more than 40 years, and has focused solely on Islamic finance since 2002. At Hong Leong Islamic Bank, he was instrumental in transforming an Islamic banking window into a full-fledged Islamic banking subsidiary. Today, he helms INCEIF (International Centre for Education in Islamic Finance), the global university for Islamic finance set up by Bank Negara (Central Bank of Malaysia) in December 2005. He is also a frequent speaker and commentator on matters relating to Islamic finance. Keon Chee is a senior executive in Singapore where he oversees the wills, trusts and corporate services businesses in his firm. He has many years' experience in investment research, derivatives, financial training and insurance. He obtained an MBA from Columbia University and an LL.B (Hons) from the University of London, and enjoys using his broad background in helping clients with their estate planning needs. He is also co-author of the best-selling Make Your Money Work For You.

Though small in comparison with conventional finance, Islamic finance is at the threshold of serious expansion, growing at between 15 20 per cent a year. Yet the wealth potential of Islamic finance is far from being its most attractive feature. What is most compelling about Islamic finance are its ethical principles and strong corporate governance based on Shariah law. This book explains how conventional financial products work from mortgages and leases to trade finance and insurance before delving into their Islamic versions.

Though small in comparison with conventional finance, Islamic finance is at the threshold of serious expansion, growing at between 15–20 per cent a year. Yet the wealth potential of Islamic finance is far from being its most attractive feature. What is most compelling about Islamic finance are its ethical principles and strong corporate governance based on Shariah law.This book explains how conventional financial products work—from mortgages and leases to trade finance and insurance—before delving into their Islamic versions.

The first book to offer comprehensive coverage of Islamic finance and banking and its applications to the rest of the world, now fully revised and updated The ongoing international financial crisis has reignited debate over the development of a risk-sharing financial system, such as that required in Shariah Law. An Introduction to Islamic Finance: Theory and Practice, Second Edition highlights the core principles of risk sharing in Islam, arguing that a risk-sharing financial system is exactly what we need to promote greater financial stability. Providing comprehensive coverage of the fundamental theory behind Islamic finance and banking, according to the core concepts of Shariah law, authors Zamir Iqbal and Abbas Mirakhor clearly explain the distinct features of an Islamic financial system and how it compares with traditional financial models. Addressing the myriad important developments that have taken place in recent years, this second edition looks to the future, addressing emerging issues sure to influence future developments in Islamic finance. Explores the unique features of an Islamic financial system, how they compare to more traditional financial systems, and how they could improve them Discusses all the most recent developments and emerging issues in Islamic finance Updated with the latest developments, trends, innovations, and statistics, this new edition features additional chapters on the financial crisis, globalization, non-bank financial institutions, and recent developments in Takaful (Islamic insurance) The first edition of An Introduction to Islamic Finance established the book as the market leader, and this newly revised and updated second edition incorporates the most recent developments in this booming financial sector, including financial stability, globalization, and non-banking financial institutions.

This book is the result of a decade teaching of Islamic finance course to business graduates (Bachelor and Master classes). This book is written with a clear focus on learning of Islamic banking & finance by accounting, banking, business and finance students/professionals. This book is divided into five parts. Part-1 presents an update on Islamic finance, why and how Islamic banking started; What is current status; Meaning and prohibition of Riba (Interest & Usury) as reported in revealed books (Bible and Qur'an); business models under Islamic financial services industry; principles of Islamic financial system, similarities and differences with conventional finance industry, and challenges being faced by the nascent industry.Part two is about asset-backed financing provided by IFIs. It includes trading (selling) modes of financing including Murabaha (ch.2), Salam, and Istisna'a; it also includes rental-based financing product-Ijarah financing. Chapter 2,3,4,5 include sales and rental-based financing. Part three of the book deals with profit and loss sharing modes of financing including Musharakah, diminishing Musharakah and Mudarabah. A special section is devoted to discussing the causes of lesser application of Musharakah in operations of IFIs, in addition to Shari'ah rulings and financial impact. Chapter seven is about Diminishing Musharakah; a form of gradually declining partnership between an IFI and clients; generally used to finance real estates. Under diminishing Musharakah, the basic Shari'ah rulings, Islamic house financing, comparative study of conventional and Islamic mortgages and installment calculation under different assumptions for house financing are presented. Chapter eight is about Mudarabah. Chapter nine presents various types of deposits collected by IFIs and profit-sharing mechanism. Concepts of daily product and weight-age based profit systems are elaborated.Part four of the book presents special topics in Islamic Finance. In this part areas of liquidity management, Islamic insurance, currency system, substance & form, and challenges to Islamic finance industry are elaborated. Under Islamic capital market (liquidity management) two dedicated chapters have been included; each for equities and sukuk. Chapter 12 elaborates briefly the concept of Islamic insurance covering multiple areas including Shari'ah guidelines, takaful (insurance) models, and role of insurance company, in addition to illustrative financial calculations. Chapter-13 addresses the issue of preference for 'legal form over economic substance' by critically evaluating the selected Islamic finance contracts Last chapter identifies the challenges [potentially hurdles in sustainability, growth and expansion of the industry]. The fifth edition is the outcome of encouraging response by the academic community to earlier editions. In this edition, due attention has been given to present material in a reader-friendly mode in addition to a thorough review of content, exercises and figures. Title of the book changed by adding prefix of 'fundamentals' to reflect the nature of work (as text book). In this edition, the chapter on Islamic finance: an update is revised thoroughly; and by insertion of specific contents including principles and business models of Islamic financial system, in addition to brief presentation of challenges. Besides, Islamic capital market is re-written by including an evaluation of methodologies used in creation of Shari'ah universes of stocks. Also, a new chapter included to present the application of 'form over substance' principle to industry practices. Updated figures on the global volume of assets, application of financial products; regional shares, etc. are also part of this edition. Also, more examples included in the text to make the concept clear. An increased number of multiple-choice questions and mini cases are also forming part ofthe updated edition. I welcome readers' Feedback.

This book is result of five years teaching of Islamic finance course to MBA Finance students. This book is written with a clear focus on learning of Islamic banking & finance by accounting, banking, business and finance students/professionals. Resources available, so for, on the subject have focused on legal side and very negligible work is available on financial front for a common user. This book is written in financial perspective and author has focused upon financial impacts, generated by application of Islamic financial laws. However a summary of Islamic commercial laws of each chapter has been provided. Author has adopted balance sheet method to inculcate the knowledge; hence, understanding of elementary balance sheet is recommended to get maximum out of this book. This book is divided into five parts. Part-1 presents an update on Islamic finance. Part two is about asset backed financing provided by IFIs. It includes trading (selling) modes of financing including Murabaha, Salam and Istisna'a; it also includes Ijarah financing. At the start of part two, summary of Shari'a rulings about sales is reported. Part three of the book deals with profit and loss sharing modes of financing including Musharaka, diminishing Musharaka and Mudaraba. A special section is devoted to discuss the causes of lesser application of Musharaka in operations of IFIs, in addition to Shari'a rulings and financial impact. Chapter seven is about Diminishing Musharaka; a form of gradually declining partnership between an IFI and clients; generally used to finance real estates. Under diminishing Musharaka, I have discussed the basic Shari'a rulings, Islamic house financing, comparative study of conventional and Islamic mortgages and installment calculation under different assumptions for house financing. Chapter eight is about Mudaraba. Under this scheme of financing IFIs provide capital to financially weak but skilful people to do the business and share outcome with IFIs. Part four is about deposits management. Part five of the book presents special topics in Islamic Finance. In this part areas of liquidity management and Islamic insurance are discussed. Under Islamic capital market two dedicated chapters have been included; each for equities and Sukuk. Chapter 12 is dedicated for Islamic insurance. Last chapter has focused on challenges to Islamic finance industry. Third edition is definitely outcome of very encouraging response by academic community to earlier editions. In this edition due attention has been given to present material in reader friendly mode in addition to thorough review of content, exercises and figures. In this edition Islamic capital market is re-written by including separate chapters on equities and Sukuk. Also a special chapter is devoted to Islamic insurance. Updated figures on global volume of assets, regional shares, equity funds and Sukuk are also part of this edition. Also more examples included in the text to make the concept clear. In appendix guidance for establishment of Islamic bank and appointment of Shari'a advisor as provided by local central bank is included. Increased number of true/false, multiple choice questions and mini cases are also forming part of updated edition. This book is useful for MBA/BBA students as a three credit hour course as well as for banking/finance students and practitioners of Islamic banking & finance. It is also useful for accounting & finance professionals, trainers in Islamic banking, regulators, investors, corporate managers and general public, interested in understanding Islamic finance. I hope this book will serve its purpose through imparting knowledge of Islamic banking & finance among accounting, business and finance graduates as well as practitioners of Islamic financial system, investors and general public.