Islamic Banking & Finance
The course, which covers Muslim economies and Islamic Finance, Banking and Insurance, seeks to explore ways in which Muslims have sought to give effect to creating an equitable and just society.
In this regard the key underlying principles of Islamic finance enunciated by Muslim jurists over time include:
In this regard the key underlying principles of Islamic finance enunciated by Muslim jurists over time include:
- Prohibition of usury (riba), now commonly accepted to include all forms of interest.
- Backing by a tangible asset, so as to avoid ‘speculation’ (gharar).
- Risk to be shared amongst participants.
- Limitations on sale of debt and financial assets and their use as collateral.
- Prohibition of finance for activities deemed incompatible with shari‘ah Law (haram), such as alcohol, conventional financial services, gambling and tobacco.
Modern Islamic finance emerged in the mid-1970s with the founding of the first large Islamic banks and finance houses. The mode chosen to ensure compliance with the Shari ’ah was to have a board of scholars to opine on any products and instruments to be marketed. Gradually this has become the hallmark of Islamic Financial Institutions and having a credible shari‘ah board or at least access to a recognised shari‘ah opinion has become an indispensable feature of the whole industry.
The course is designed to explore the rise of Islamic finance, examine some of the Islamic financial instruments in detail, look at developments in capital market instruments and chart the progress of Takaful (Islamic Insurance) products.
The course is structured over two semesters and divided into the following topics:
First Semester
Economics with special reference to Muslim countries (4 Sessions)
Keynote address on economics of Muslim countries
Islamic banking (5 Sessions)
Keynote address on fiqh al mu‘amalat
Second Semester
Islamic capital markets (5 sessions)
Keynote address on the issues covered
Takaful - Islamic insurance (4 sessions)
Keynote address on Takaful
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