INCEIF Knowledge Repository (INCEIF University)
Not a member yet
1768 research outputs found
Sort by
The Basel accords, financial turmoil and Islamic banks
No full textThe primary case of the worldwide collossal failures of financial institutions-banks in particular-in the wake of the 2007-2008 turmoil was the heightened lure of leverage gains that led them to expand credit beyond what the volume and quality of their capital assets warranted. The devastation led to a major policy shift in finance at the national and international levels, with a focus on capital adequacy that financial institutions must observed for their own safety as well as the wider social interest. It was felt that a stringent and regular watch was needed make adequacy norms work. The Basel Committee on Banking Supervision (BCBS) developed what are known as Accords (agreements) defining capital and its adequacy for banks to limit the risks that can take within reasonable confines. Incidentally, it is worth noting that Malaysia was in a sense pre-emptive in revamping its own regulatory framework. Also, the Islamic Financial Services Board (IFSB) was alert in announcing some new standards. This paper briefly takes stock of these developments with a view to seeing how far the Accords are needed for Islamic banks in view of the arrangements that are already in place
Developmental trends of global Islamic finance
No full textIslamic finance is a tested and a trusted concept in the world today. Both Muslims and non-Muslims, irrespective of the faith convictions are adopting it. The financial crises of global economy have been proving the viability and sustainability of Islamic finance. However, it shall not be forgotten that once there was time in which the world questioned about the practicability of Islamic finance. There were also times at which Islamic finance was associated with terrorism financing and it was perceived that due to Islamic phobia which triggered after September 9/11, the growth of Islamic finance will be inhibited. Looking back to these times, there are people who still keep wondering on how Islamic finance has emerged as an alternative to the conventional finance which has been accepted as the only way of financing for a long period of time. As such, it is imperative to understand the developmental trends of global Islamic finance with the newly emerging challenges pausing as threats to the sustainability of the global Islamic finance industry. It is anticipated that this paper will help us understand the global development of Islamic finance from its inception up until now
Muslim contribution to economics
No full textAfter discussing the Gracco-Roman economics, Joseph Schumpeter in his Magnum Opus, History of Economic Analysis, states that: "So far as our subject is concerned we may safely leap over 500 years to the epoch of St. Thomas Aquinas (1225-74) whose Summa Theologica is in the history of thought what the south-western spire of the Cathedral of Chartres is in the history of architecture.
Takaful: concept, history, development, and future challenges of its industry
No full textMutual help and guarantee have been the ordinary practice of tribal Arabs even before the advent of Islam in Arabia. A similar but refined concept was reinforced by the Qur'an to be adopted by Muslims. It was widely applied in their daily lives. When the Muslims extended their trade by sea to the Far East, the concept of mutual assistance became more prominent and organised to protect their ships, merchandise and even lives from all sorts of dangers and mishaps. The practice by these merchants to put aside a sum of money before setting sail to the Far East for trade as a fund to compensate any loss incurred by any of them became the most prominent practice that led to the birth of what is today known as marine insurance. To circumvent some of the shari'ah non-compliant practices of mainstream insurance is the introduction of the concept of donating part of the participants' contribution which forms the special fund to compensate losses. From then on, the takaful operators started to emerge, first in Sudan and later in other parts of the Muslim world. Several models have been formulated, namely mudarabah, modified mudarabah, wakalah and wakalah-waqf. The success of the takaful companies around the world has also been strongly influenced by the recent upsurge in the petroleum price that has led to the unprecedented increase in sovereign and private wealth. The recent emergence of "re-takaful" companies add up further to the rapid growth in takaful operators and funds. Despite the success stories, there are a number of serious challenges facing takaful and "re-takaful" operators which are worth noting
Combinations of contracts in Islamic commercial law and its application in Islamic financial services in Malaysia
No full textThis study examines the concept of combination of contracts in Islamic commercial law and its application in the Malaysian Islamic financial services. Combination of contracts encounters some juridical issues by virtue of the three prohibiting ahadith mentioned by the Prophet (s.a.w.). The ahadith stated that the Prophet (s.a.w.) prohibited combining two sales in one sale, loan and sale, as well as two transactions in one transaction. Many debates have been raised among classical and contemporary Shari'ah scholars regarding the interpretation of these ahadith and the types of contracts that are combinable or non-combinable. Given the fact that these issues remain obfuscated, therefore this study is commenced. In so doing, this study employs two research methodologies; content analysis of Islamic jurisprudence's sources and case studies. The result of the study demonstrates that combination of contracts is generally permitted in Islamic commercial law, as long as there is no Quranic verse or Prophetic tradition that prohibits the combination. Concerning the understanding of three ahadith reported, they must be interpreted within specific context ..
Maldives to establish Islamic finance center
No full textCapital Market Development Authority has drafted a proposal to establish an Islamic Finance Center in the Maldives which will not only act as a Islamic banking and finance capacity building institute, but it will also act as to further expand Islamic finance industry in the Maldives and in the South Asian Association for Regional Cooperation (SAARC) region
Meeting expectations: the roles and responsibilities of Shari'ah scholars in Islamic finance
No full textIslamic finance uses the Shari'ah as the backbone of its system. The Shari'ah not only contains the principles and foundations upon which the financial system is established, but alos provides guidance for setting the industry's direction. Practically speaking, it is the Shari'ah scholars, in their role as interpreters of the Shari'ah, who are charged with guiding the industry. They have a key role to play in maintaining the credibility and integrity of the industry by requiring Islamic financial institutions (IFIs) to adhere not only to the Shari'ah's technical requirements but to its values and principles as well..
Towards an economic theory of Islamic finance regulation
No full textIslamic finance has several comparative advantages over conventional finance. Since they are related to efficiency, stability and other macroeconomic benefits, they cannot be easily internalized by Islamic bankers. Islamic bankers have no incentive to stick to the Islamic finance paradigm and instead tend to mimic conventional finance. Regulation is therefore required to modify their behavior in order to allow the Islamic finance industry to enjoy its advantages. This paper attempts modify the economic theory of bank regulations towards that aim
The impact of working capital management on the profitability of Shariah-compliant and non-Shariah firms: the case of Malaysia
No full textThis paper examines the impact of working capital management on the firm's profitability using retun on equity as its core determinant. Using a sampe of ninety listed Malaysian Shariah-compliant and non-Shariah firms react differently to similar firm specific variables. By employing static panel data estimation technique, we document that although the Shariah-compliant firms are subject to certain restrictions, they still efficiently compete with their conventional counterparts in terms of profitability by sustaining a higher return on equity. This might be attributed to better management of their receivables as well as a higher and better inventory turnover as per our empirical results. Thus, it can be assumed that Shariah restrictions have not impeded the performance of Shariah-compliant firms; rather it has helped them in some respects if not all
New strategic directions to be formulated for Islamic capital market development in Maldives
No full textThe Capital Market Development Authority (CMDA), the Maldivian regulatory authority for the Islamic capital market (ICM), has stared work to formulate the ICM Strategic plan 2015-20. The primary strategies formulated include: enhance the depth of Islamic capital market products and services, strengthen the Capital Market Shariah Advisory Committee