INCEIF Knowledge Repository (INCEIF University)
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Issues in waqf and zakat management
No full textAn overview of the challenges ahead for the continued growth of the industry is to be found in this chapter. These issues are faced by every new marketplace, where new securities are issued. How these issues are faced with creative resolutions will provide the pathway for this market to prosper in the future
Managing corporate waqf in Malaysia: perspectives of selected SEDCs and SIRCs
No full textWaqf is described as an act of dedicating a corpus of property or financial assets in perpetuity for the cause of Allah SWT. The ownership of the property or assets is transferred to Allah SWT, but the benefits are dedicated to the poor, sick, marginalized segments of society, or any other virtuous causes. Waqf institutions are among several instruments instituted in Islam to combat poverty and enhance societal welfare. Waqf provides the material infrastructure and creates a source of revenue for use in, among other things, social welfare enhancing activities, both at the family, community, and state levels. Corporate waqf is defined as a type of waqf where the mawq'f (waqf assets) are in the form of shares issued and managed by a corporate entity. Corporate waqf utilizes the application of waqf principles in a corporate setting. Corporate waqf is more than a charitable and philanthropic act by a business entity, but is an initiative to combine the concept of waqf and apply it to achieve business and corporate objectives. Consequently, it intends to redefine the role and function of business organizations in today's society by "giving back" and reaching out to the community. This study tries to gauge the level of awareness and willingness of State Economic Development Corporations (SEDCs) and State Islamic Religious Councils (SIRCs) to be involved in corporate waqf initiatives. The study found that, in general, the SEDCs are receptive of the idea of corporate waqf entities managing and enhancing the values of waqf assets and waqf properties; however, this must be done within the current legal framework. The study also found a lack of coordination between the SEDCs and SIRCs in making decisions on waqf related matters. It is suggested that the state government, through its departments/agencies, play a facilitative role in ensuring the efficient development of waqf assets or properties
Harnessing social and financial capital through social impact partnerships and enterprise waqf fund
No full textThe slides highlight: 1) there is synergy between waqf and social impact bond/partnership (SIP); 2) enterprise waqf fund can support SIP based on venture philanthropy principles; 3) initiatives can be taken to address risks and to facilitate the development of a SIP ecosystem
Administration of zakat on wealth in Maldives
No full textFor Muslims zakat is obligatory and different jurisdictions in the world have different mechanisms to administer it. Maldives is a hundred percent Muslim country and zakat administration in the country is unique. As such the objective of the paper is to discuss the zakat administration in Maldives with special reference to zakat al mal and to discuss the challenges facing the existing way of zakat administration. The paper also includes ways to overcome the challenges. No literature on this area in Maldives could be found and as such reference to primary materials such as unpublished statistics, reports, brochures have been made. It is hoped that this paper will encourage further
research on this area in Maldives
Application of law of evidence to Islamic banking with special reference to Malaysia
No full textThis research aims to deal with the law of evidence invoked in Islamic banking cases reported in Malaysia from 1983 to 2015 and determine whether the invoked provisions of the statute in the case law have any conflicts with Islamic law that are threatening the development of Islamic banking in Malaysia. The methodology used in this research is assessing the implication by studying the provisions of the law of evidence that has been invoked in the reported case law. It is evident from this research that following are the evident conflicts found in the Evidence Act 1950. In this arena, the following changes are significant for sustaining Islamic banking in Malaysia. Expert opinion under Section 45 of the Evidence Act 1950 should be amended such that in Islamic banking, under this Act, expert opinion can be sought by the court. The rule and exceptions of parol evidence in Sections 91 and 92 of the Evidence Act 1950 need to be amended such that in Islamic banking matters, anything that is contrary to Shariah is mentioned in the contract; this amendment will be an exception to the parol evidence rule on the grounds that the written Islamic contract can be amended or set aside depending on the circumstances of the case
Shariah compliance via blockchain and smart contract - the case for Islamic credit card
No full textShariah compliance is the raison d'etre for the existence of the Islamic banking and finance industry. Shariah compliance is achieved by meeting not only the prerequisites of the pillars and conditions of the Shariah contract used, but ensuring that the underlying asset as well as the underlying purpose of entering into such a contract is in compliance with the Shariah. Compliance with Shariah ensures that the rights of the contractual parties are protected and contractual obligations are met out in a responsible and lawful manner. The advent of financial technology (fintech) introduces important innovative infrastructure into the realm of Islamic finance. The recent Ernst & Young report on Banking in Emerging Markets (2017) acknowledged the importance and need for the Islamic banking and finance industry to adapt and embrace the Fintech revolution. The report noted that the impact of Fintech could potentially draw an additional 150 million customers to the Islamic banking sector by 2021
The leverage decision of firms - a comparative analysis between Shari'ah compliant and Shari'ah non-compliant firms
No full textCapital structure which is the mixture of debt and equity capital of a company is very important since it is related to the ability of the company to fulfil the needs of its stakeholders. The main competing theories, which attempts to understand how financing decisions are made, that have emerged and developed over the last decades are the Trade-Off Theory and the Pecking Order Theory. Trade-Off Theory predicts that firms should balance the tax benefits of debt against the cost of debt, therefore firms should have an optimal capital structure. In contrast, Pecking Order Theory does not imply that firms capital structure decision is driven by the notion of optimal ..
Islamic banking in Malaysia: the changing landscape
No full textThe banking industry in Malaysia is dominated by conventional banks, with Islamic banks accounting for roughly one-fifth. In addition, the Islamic banking sector is overwhelmingly in the hands of conventional banks, thanks to their Islamic subsidiaries which outnumber the "wholesome" Islamic banks whose market share of the Islamic banking business is on the decline. In this equation, the Islamic subsidiaries of conventional banks have an upper hand, as they can ride on the coattails of their parents which gives them a competitive edge - while the stand-alone domestic Islamic banks and foreign-owned full-fledged Islamic banks have to fend for themselves. The Islamic subsidiaries of conventional parents are in the driver's seat actively leading the industry, while the wholesome Islamic banks have apparently taken the backseat, which may not augur well for the future of Islamic banking that is currently stuck in the initial stage of product differentiation. It is likely that the Islamic subsidiaries of conventional banks will continue to "Islamise" their conventional products, with wholesome Islamic banks passively following suit, rendering the transition from Shari'ah-compliant products to Shari'ah-based products somewhat elusive
Determinants of performance of Islamic banks in GCC countries: dynamic GMM approach
No full textThe main objective of this study is to identify the main determinants of the Islamic banks' performance in Gulf Cooperation Council (GCC) regions. The research uses both static model (fixed effects and random effects) and Generalized method of Moments (GMM). The data for this study are obtained from the annual reports of 29 Islamic banks from GCC countries using Bankscope database for the period from 2005 to 2013. The empirical findings reveal that Islamic banks' specific factors such as the equity financing and bank size are positive and statistically significant to the profitability of Islamic banks. The operating efficiency ratio is negatively and statistically significant to return on asset
Application of conventional benchmark in Islamic wealth management
No full textLIBOR (London Interbank Overnight Rate) is a rather recent concept, even if English banks had been in banking business for many decades before the invention of LIBOR as the world's favorite benchmark for cost of money. LIBOR emerged in the 1980s to serve as a benchmark to account for interest rate risk when a surge in the use of futures contracts began to trouble lending decisions. Futures have been offered since 1972, and by the 1980s had become a major risk-hedging instrument in the developed countries. Due to the absence of a reliable benchmark back then, a solution was sought from the Bank of England. The banking industry trade group, the British Bankers' Association, launched LIBOR with the dollar, the yen and the pound sterling to have LIBOR serve as the benchmark