INCEIF Knowledge Repository (INCEIF University)
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The fiqh characterization of ijarah mawsufah fi al-dhimmah: an analysis of juristic views
No full textThe application of the Shari'ah principle of ijarah mawsufah fi al-dhimmah (forward lease) can be traced back to the early days of Islam. It is derived from the original contract of ijarah (lease), which has been widely used in the structuring of Islamic financial transactions to cater for various Muslim and non-Muslim needs over time. Thus, the classical books of Islamic jurisprudence have amply discussed its applications in various forms according to the prevailing circumstances. Today, ijarah mawsufah fi al-dhimmah is applied in the offering of various services in the Islamic finance industry relating to education, medical treatment, tourism, hajj and 'umrah, among others. Nevertheless, its applications involve a number of Shari'ah issues concerning the advance rental payment, the subject matter of the contract and its fiqh characterization. The primary purpose of this paper is accordingly to examine the key Shari'ah issues arising in the current applications of ijarah mawsufah fi al-dhimmah in the Islamic finance industry and to determine their juristic stance. Since ijarah mawsufah fi al-dhimmah shares the characteristics of both ijarah and salam (forward sale), this paper also aims to examine the most relevant contract applicable in ijarah mawsufah fi al-dhimmah
Developing Islamic finance in the framework of maqasid al-Shari'ah: understanding the ends (maqasid) and the means (wasa'il)
No full textThe paper aims to investigate the dimensions of maqasid al-Shari'ah in Islamic finance by exploring the ends (maqasid) and the means (wasa'il). Those would clarify the nature and goals of Islamic finance as well as its directional development. Using literature in English and Arabic sources in the area of maqasid al-Shari'ah, as well as from the reading of the primary sources (the Qur'anic texts/nusus), the paper attempts to delineate the dimensions that would constitute the ends (maqasid) and the means (wasa'il) in Islamic finance. The paper explicates three specific ends (maqasid) in Islamic finance, namely wealth circulation, fair and transparent financial practices and justice at the micro- and macro-level. To achieve those ends, the Shari'ah provides means (wasa'il) such as facilitating financial contracts, establishing values and standards and instituting social responsibility. The findings of this paper will give insights on the ends (maqasid) and the means (wasa'il) in Islamic finance based on the maqasid al-Shari'ah discourse. It could be used as a reference in understanding the nature of Islamic finance and in developing a sound and solid Islamic finance based on the Shari'ah
Crime and police personnel in Malaysia: an empirical investigation
No full textThe economic theory on crime behavior proposed by Becker (1968) suggests that an increase in the number of policemen can deter crimes. However, recent studies found a positive relationship between police personnel and crime rates. The purpose of the present study is to investigate the effect of police personnel on 15 categories of crime rates in Malaysia for the period of 1973 to 2005 by using the vector error-correction model. Our results suggest that 8 categories of crime rates support Becker’s crime economic theory, while 6 categories of crime support the ‘long-run natural rate of crime’ hypothesi
Problematic issues of takaful models and their implications for the takaful surplus: a critical juristic analysis
No full textAlthough three decades or more have elapsed since the emergence of takaful industry, a period in which this industry has received wide acceptance and witnessed a great development in its operations and products, the takaful models that are being implemented in it have not been free of many juristic and technical problems. This is an agreed upon fact among Shari'ah scholarly authorities and practitioners alike; these problems concerns mainly the ownership and distribution of the surplus. This situation urged some Shari'ah institutions of worldwide scholarly authority (such as the International Fiqh Academy, one of the agencies of OIC) to call for the need of more research in order to develop a new model that would overcome the defects of the existing models that are in use in takaful industry, be more compliant with the Shari'ah rules and fulfilling its objectives, and in harmony with the legislative regimes governing the insurance sector in the countries that are more receptive to takaful insurance. In light of the above, the present article examines the most critical Shari'ah issues that have been raised against the existing donation or tabarru'-based takaful models (such as the nature of donation, the transformation of donation relationship between the insured and the tabarru' fund into an exchange relationship, considering the surplus as profit in the mudarabah model though it is in no way an addition to the capital, the legitimacy of the distribution of surplus among the insured and the takaful company, the ownership of the fund, etc.). The article also looks into some of the technical problems facing takaful insurance, such as including the accounting basis of insurance coverage, agency problems, etc. Special attention has been given to issues pertaining to the surplus, given the fact that it is the most problematic matter in takaful industry on which there has been much debate and controversy; in which respect the article has shown that the existing applied models have not been able to provide proper solutions. Finally, the article examines critically the wadi'ah-based model proposed by the International Shari'ah Research Academy for Islamic Finance (ISRA), thus evaluating, amending and developing it in such a way as would make it juristically more sound and capable of overcoming the problematic issues of the existing models
Islamic norms, the excel formula and home financing models
No full textThis paper adds to the series of writings on Islamic home financing presented and published by the author since February 2010. It spells out certain norms Islamic banks must observe in home financing and demonstrates that the conventional model based on an Excel formula does not meet the stated norms. It may well be emphasized that in Islam the question of observing these norms arises before, and not after, the selection of the formula; additional juristic requirements may only follow subsequently. Is it not then strange many Islamic banks are using the formula to determine the periodic instalment payments in their home financing programs? The paper finds, for example, the popular Musharakah-Mutanaqisa Partnership (MMP) Islamic home financing model to be non-compliant with the stated norms. It presents a new model―the Zubair Diminishing Balance Method (ZDBM) ― and argues that the alternative is not only fully observant but is superior to the MMP model on some other counts as well
A review of unemployment and labor force participation rate: evidence from Sweden, United State and urban China
No full textThe purpose of this paper is to review the empirical study of the long-run relationship between unemployment rates and labor force participation rates in the Sweden, United State and urban China. In Sweden, Osterholm (2010) investigated whether unemployment and labor force participation is an issue that has important implications for theory, empirical modeling & policy in labour and macroeconomics. On the other hand Liu (2011) analyzed pattern and trends in labor force participation rate & employment in urban for the past few decade in China. Emerson (2011) did the study for United States on unemployment and labour force participation. While Emerson (2011) and Osterholm (2010) results leads us to question the empirical relevance of the unemployment invariance hypothesis for the United States and Sweden, Liu (2011) provided comprehensive and more up-to-date study on topic with extension in examining employment, type of decomposition to shed light on the source of gender difference
The currency risk exposure of non-financial firms in ASEAN-4: an assesment using stock returns and cash flow methodologies
No full textThe study of currency exposure in the context of small open economies such as the ASEAN-4 region is important in view of the higher degree of openness of the economies and the progressive growth of the Islamic finance industry. This study examined the presence of currency exposure in a sample of 405 listed non-financial corporations from Indonesia, Malaysia, Singapore and Thailand over a duration of 18 years from 1993 to 2010. This study is different from previous studies as it combines two assessment methods, i.e., the cash flow (CF) and stock returns (SR) approaches. Furthermore, this study covers two major events of the financial crises ..
Auditor independence: where is it?
No full textWe are in doubt on whether the book editors will ever publish this article that questioning the degree of auditor independence. We have repeatedly heard from colleagues (and foes) that papers that touched this issues has been sidelined by unseen upper hands from being accepted in academic publications. However, we choose to remain steadfast to express our concern about auditor indepence. In this article attempt to, albeit in a small scale, discuss and report an objective assessment of this pertinent concept
Islamic capital markets: a comparative approach
No full textThe book begins with an introductory chapter of founding thoughts of markets, asset prices, risk, uncertainty, and risk sharing. The risk-sharing philosophy runs throughout the book. The first three chapters provide the foundation. Chapter 4 through 12 examine each Islamic capital markets or conventional market and products. The final chapter, in providing an overall conclusion, examines the role of government in developing capital markets, specifically, Islamic capital markets
A critical study on Shari'ah compliant and Shari'ah based products in Islamic banking
No full textThis paper aims at analyzing the concept of Shari'ah compliant and Shari'ah based products in existing Islamic banking Institutions. The paper would shed more lights on the differences between both concepts. The main argument which is premised on the notion that the products may be Shari'ah compliant but not fully Islamic is vehemently deficient due to the fact that if the product is Shari'ah compliant and is less Islamic, then it is basically contrary to proper and true concept of Shari'ah. It is incontrovertible that Shari'ah is the system of law based on the commandment of Allah and the submission to such law would permit someone to be recognized as "Muslim" A believer in Islam. However, such kind of contradictions certainly shows the presence of shortcomings in such products, or in process of making them compliant to Shari'ah. Therefore, this study is a qualitative design, which addresses lacuna of the idea of Shari'ah complaint may be of less Islamic ethics. It will also examine the approach used by the Prophet peace be unto him- to reform the financial systems during his era. The paper will conclude by offering four alternative approaches on Shari'ah compliant parameters viz.; 'Aqd approach, Maqasid approach, Reporting approach, and Legal documentation of contract approach. In addition, this paper will explains the relationships among the various approaches, as some stand as dependent parameters, while the other stand as independent parameter. The study will offer suggestions for future research