The document provides an overview of a presentation on recent issues in Islamic finance and the modern economy. The presentation covers the main principles of Islamic finance including a ban on interest (riba), promotion of fairness and equity, profit and loss sharing, and the zakat mechanism. It also discusses the differences between Islamic finance and conventional finance which allows interest, as well as governance, growth, human capital development issues, and La Trobe University's role in and plans for its new Master of Islamic Banking and Finance program.
Islamic banking has grown significantly in recent decades, reaching $300 billion globally. This growth has been spurred by the large Muslim population worldwide and interest from conventional banks. Islamic banking prohibits interest and gambling, and requires profit/loss sharing and sharia compliance. It offers alternatives to conventional financing through modes like joint ventures, leasing, and Islamic bonds. Major milestones in its development include the Islamic Development Bank in 1975, the AAOIFI in 1990, and the IFSB in 2002.
The document discusses trends in the global Islamic finance industry, prospects for its sustainability, and key challenges. It notes that Islamic finance has grown to nearly a $1 trillion industry spread across 70 countries, with some regions like the Gulf seeing exceptional growth. While initially faith-driven, Islamic finance is becoming institutionalized and seen as a parallel system that can complement conventional finance. The prospects for sustainability are promising due to growing investments across hubs and recognition of Islamic finance's appeal beyond religion. However, challenges remain around further developing regulatory frameworks and adapting innovative products without compromising sharia principles.
The Islamic finance industry has grown significantly in recent decades. It is currently estimated to be worth around $700 billion but is expected to reach $1.4 trillion by 2010. Islamic finance first developed in the 1960s and gained momentum in the 1970s due to oil wealth. It faced early criticisms for not having interest rates but responded that returns are determined after investment based on actual profits. The industry continued growing through the 1980s and 1990s as more institutions offered Islamic products. It was impacted by the 2008 financial crisis but overall fared better than conventional finance due to its risk-sharing principles. Looking ahead, forecasts show continued strong growth in Islamic finance as interest grows in both Muslim-majority and Western countries.
ISLAMIC BANKING AND FINANCE: MALAYSIA’S EXPERIENCE AND ACHIEVEMENTSbrighteyes
ISLAMIC BANKING AND FINANCE: MALAYSIA’S EXPERIENCE AND ACHIEVEMENTS 13 June 2006
Victoria University of Wellington
Presented by:
Bakarudin Ishak
Director
Islamic Banking and Takaful Department Bank Negara Malaysia
This was the presentation made at Government Brennen College, Thalassery, Kerala, India; in the Seminar organized by the Islamic History Department on 27th October, 2014.
Fundamental of Islamic Banking - Framework of Islamic Financial SystemMahyuddin Khalid
This document provides an overview of the development of Islamic banking and finance in Malaysia. It discusses the historical milestones and stages of development of Islamic banking, takaful (Islamic insurance), the Islamic capital market, and the roles of the Shariah Advisory Council and Labuan International Offshore Financial Centre in developing the Islamic financial system. The framework established in Malaysia has served as a model for the development of comprehensive Islamic financial systems internationally.
1) Pakistan was one of the first countries to implement Islamic banking in the 1960s and 1970s, with the founder of Pakistan calling for an Islamic banking system when establishing the State Bank of Pakistan in 1948.
2) Egypt started the first modern Islamic bank, called Mit Ghamr Savings Bank, in 1963 based on profit-sharing principles without interest. It succeeded in attracting many depositors and financing local projects until being shut down for political reasons in 1967.
3) Malaysia established Tabung Haji in 1962 as the first Islamic bank in Asia to help Muslims save for the hajj pilgrimage, and it remains an important Islamic financial institution today.
Islamic finance current, future trends and challengesHosam alden
This document summarizes the current state of Islamic finance, future opportunities, and challenges. It discusses how Islamic finance emerged in the 1960s and has grown significantly in recent decades, with over $200 billion in assets currently. The key principles of Islamic finance are outlined, including prohibitions on interest and risk/profit sharing. Common instruments like murabaha, ijara, mudaraba and musharaka are described. Norms around avoiding riba (interest), gharar (uncertainty), and encouraging mutual cooperation are also covered. The document concludes that while Islamic finance remains a niche market globally, prospects for growth are strong given demand from Muslims worldwide and opportunities to channel savings ethically. However, it also faces challenges from differences
Islamic banking has grown significantly in recent decades, reaching $300 billion globally. This growth has been spurred by the large Muslim population worldwide and interest from conventional banks. Islamic banking prohibits interest and gambling, and requires profit/loss sharing and sharia compliance. It offers alternatives to conventional financing through modes like joint ventures, leasing, and Islamic bonds. Major milestones in its development include the Islamic Development Bank in 1975, the AAOIFI in 1990, and the IFSB in 2002.
The document discusses trends in the global Islamic finance industry, prospects for its sustainability, and key challenges. It notes that Islamic finance has grown to nearly a $1 trillion industry spread across 70 countries, with some regions like the Gulf seeing exceptional growth. While initially faith-driven, Islamic finance is becoming institutionalized and seen as a parallel system that can complement conventional finance. The prospects for sustainability are promising due to growing investments across hubs and recognition of Islamic finance's appeal beyond religion. However, challenges remain around further developing regulatory frameworks and adapting innovative products without compromising sharia principles.
The Islamic finance industry has grown significantly in recent decades. It is currently estimated to be worth around $700 billion but is expected to reach $1.4 trillion by 2010. Islamic finance first developed in the 1960s and gained momentum in the 1970s due to oil wealth. It faced early criticisms for not having interest rates but responded that returns are determined after investment based on actual profits. The industry continued growing through the 1980s and 1990s as more institutions offered Islamic products. It was impacted by the 2008 financial crisis but overall fared better than conventional finance due to its risk-sharing principles. Looking ahead, forecasts show continued strong growth in Islamic finance as interest grows in both Muslim-majority and Western countries.
ISLAMIC BANKING AND FINANCE: MALAYSIA’S EXPERIENCE AND ACHIEVEMENTSbrighteyes
ISLAMIC BANKING AND FINANCE: MALAYSIA’S EXPERIENCE AND ACHIEVEMENTS 13 June 2006
Victoria University of Wellington
Presented by:
Bakarudin Ishak
Director
Islamic Banking and Takaful Department Bank Negara Malaysia
This was the presentation made at Government Brennen College, Thalassery, Kerala, India; in the Seminar organized by the Islamic History Department on 27th October, 2014.
Fundamental of Islamic Banking - Framework of Islamic Financial SystemMahyuddin Khalid
This document provides an overview of the development of Islamic banking and finance in Malaysia. It discusses the historical milestones and stages of development of Islamic banking, takaful (Islamic insurance), the Islamic capital market, and the roles of the Shariah Advisory Council and Labuan International Offshore Financial Centre in developing the Islamic financial system. The framework established in Malaysia has served as a model for the development of comprehensive Islamic financial systems internationally.
1) Pakistan was one of the first countries to implement Islamic banking in the 1960s and 1970s, with the founder of Pakistan calling for an Islamic banking system when establishing the State Bank of Pakistan in 1948.
2) Egypt started the first modern Islamic bank, called Mit Ghamr Savings Bank, in 1963 based on profit-sharing principles without interest. It succeeded in attracting many depositors and financing local projects until being shut down for political reasons in 1967.
3) Malaysia established Tabung Haji in 1962 as the first Islamic bank in Asia to help Muslims save for the hajj pilgrimage, and it remains an important Islamic financial institution today.
Islamic finance current, future trends and challengesHosam alden
This document summarizes the current state of Islamic finance, future opportunities, and challenges. It discusses how Islamic finance emerged in the 1960s and has grown significantly in recent decades, with over $200 billion in assets currently. The key principles of Islamic finance are outlined, including prohibitions on interest and risk/profit sharing. Common instruments like murabaha, ijara, mudaraba and musharaka are described. Norms around avoiding riba (interest), gharar (uncertainty), and encouraging mutual cooperation are also covered. The document concludes that while Islamic finance remains a niche market globally, prospects for growth are strong given demand from Muslims worldwide and opportunities to channel savings ethically. However, it also faces challenges from differences
lThis presentation includes the historical background of steps taken to implement Islamic Financial system in Pakistan. it also highlights the current challenges, probems and solutions
This document summarizes the historical development of Islamic banking from its origins in early Islamic civilization to the modern era. It discusses:
1) The beginnings of Islamic banking practices dating back to early Islamic history, with merchants conducting basic banking transactions.
2) The establishment of the first modern Islamic banks in the 1960s-1970s, starting with local savings banks in Egypt and then the Dubai Islamic Bank.
3) The growth and spread of Islamic banks globally from the 1970s onward, with many new banks being founded and conventional banks establishing Islamic windows. Regulatory bodies for Islamic finance also formed during this period.
Islamic finance has existed for over 1500 years but saw renewed growth starting in the 1960s. While not fully developed, it provides alternatives for devout Muslims who were previously locked out of many traditional financial vehicles. Islamic finance aims to comply with Sharia law, as determined by religious scholars. Some key differences from conventional finance include a prohibition on interest and a focus on asset-based transactions rather than currency-based loans. While similar financial outcomes can be achieved, Muslims see a distinction in the method used.
The document discusses Islamic finance and its growth. It provides details about a conference held by the National Bureau of Asian Research on Islamic finance in Southeast Asia. It summarizes the opening and closing keynote addresses which discussed linking Asia and the Middle East through sukuk markets, building a financial architecture through research, and managing regulatory challenges. The document also provides background on Islamic financial principles and the opportunities it provides through interregional linkages and new investment opportunities.
The document discusses several key international institutions in Islamic finance:
1. The International Islamic Financial Market (IIFM) works to standardize Islamic capital and money market products and documentation.
2. The International Islamic Liquidity Management Corporation (IILM) aims to enhance cross-border investment flows and financial stability in Islamic finance. It is headquartered in Kuala Lumpur and governed by several central banks.
3. Other organizations mentioned include the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB) which issues standards and guidelines for the industry.
This document provides an overview of the framework of the Islamic financial system. It begins with definitions of Islamic banking as a banking system that complies with Shariah (Islamic law). It then discusses the historical development of Islamic banking globally and locally in Malaysia in three phases from 1963-2010. Key events and milestones are highlighted. The document also outlines the framework and functions of Islamic banks, and compares features of conventional versus Islamic banks. Finally, it provides definitions and principles of Takaful (Islamic insurance) and highlights the history of the Takaful industry in Malaysia.
This document is a project report submitted by Rashida Ansari to her professor Nishikant Jha on the topic of Islamic banking. It includes an introduction outlining the objectives and methodology of the project. The project provides information on the history and concepts of Islamic banking, which prohibits interest and is based on profit and loss sharing. It also discusses the sources and uses of funds for Islamic banks and provides examples of Islamic banking practices in various countries.
The document outlines an Islamic finance workshop held in Dakar, Senegal in November 2013. It discusses the origin and principles of Islamic finance, which are based on ethical values of preserving faith, life, intellect, wealth and posterity for all. Islamic finance prohibits interest (riba) and involves profit/loss sharing and mark-up for trade financing. The outline discusses the growth of the global Islamic finance industry, including segments like Islamic banking, sukuk bonds, funds and microfinance. It notes the industry has grown to over $1 trillion in assets, with the majority in banking and located in the Middle East and Southeast Asia, though Africa is an emerging market.
The document provides an overview of Islamic banking including:
1. It discusses the history of Islamic finance which originated over 1500 years ago and saw growth during classical periods but declined under colonial rule before reviving in the 1960s.
2. It describes the inception of modern Islamic banking with the Dubai Islamic Bank in 1975 and the challenges it faced in a system dominated by interest-based conventional banking.
3. It highlights the success of Islamic banking with over 300 financial institutions managing $500-800 billion in funds and increasing recognition from international organizations.
The document discusses the principles of Islamic financial systems. It covers topics such as the fundamental principles of Islam like tawhid (unity of God), khilafah (vicegerency), and adalah (justice). It also discusses maqasid al-shariah (objectives of shariah), the strategy of Islamic economics, differences between conventional and Islamic financial systems, principles of Islamic banking like prohibition of interest and risk sharing, and objectives of seeking human welfare through allocating resources in accordance with Islamic teachings.
The search for alternatives to conventional
banking in the aftermath of the global financial
crisis trained the spotlights on Islamic banking
in many parts of the world.
- ThoughPaper by Infosys
The document provides an overview of Islamic banking, including its key concepts, history, differences from conventional banking, common financial contracts and products, future landscape, and challenges. The main points covered are:
1. Islamic banking is based on Sharia principles which prohibit riba (interest), gharar (uncertainty), and maisir (gambling). It aims to be asset-backed and promote risk-sharing.
2. Islamic banking has existed since the birth of Islam but modern Islamic banks first emerged in the 1960s-1970s. There are now over 600 Islamic banks worldwide managing over $1.4 trillion in assets.
3. Islamic banking differs from conventional banking in that it is based on partnership
Islamic banking provides financial services that adhere to Islamic law and avoid interest. It differs from conventional banking by prohibiting riba, or usury. The three main principles of Islamic banking are profit and loss sharing, asset backing, and the avoidance of uncertainty. Islamic banks also emphasize ethical investing and equitable distribution of wealth.
The document provides an introduction to Islamic banking, including its foundations in Islamic principles and prohibition of riba (interest). It discusses key concepts like sharia compliance, profit and loss sharing, and permissible financing structures. The summary also notes that Islamic banks operate under both sharia and country-specific banking laws and regulations.
The document presents an overview of various economic systems including capitalism, socialism, mixed economies, and the Islamic economic system. It discusses some of the key principles and concepts of each system, as well as potential issues or criticisms. Major sections include descriptions of permissible and prohibited activities in Islamic finance, along with challenges and opportunities in the Islamic finance industry.
This document summarizes an Islamic banking conference presentation about the common perceptions of Islamic banking, the current state of Islamic finance globally, and its future prospects. The presentation discusses how Islamic banking differs from conventional banking in avoiding interest and being asset-backed. It provides an overview of the growth of Islamic financial institutions and products around the world and their projected continued expansion in the future.
The document discusses major challenges facing Islamic banking and finance, including building capacity and awareness, developing proper legal and regulatory frameworks, addressing issues from globalization, establishing accounting and auditing standards, and ensuring compliance with Islamic principles prohibiting interest, speculative risk, and sinful activities. It emphasizes the need to build talent and expertise through education and training to strengthen the foundations and allow further growth of the industry.
This document provides an overview of Islamic banking in Malaysia. It begins by defining Islamic banking according to the Organization of Islamic Conference as banking activities based on Islamic law (Shariah) that follow the principles of fiqh muamalat. The document then outlines the objectives of Islamic banking and explains the need for Islamic banking in Malaysia's financial system. It provides details on the implementation of Islamic banking in Malaysia, including the establishment of the first Islamic bank in 1983. The document also compares Islamic banking to conventional banking and summarizes the various Islamic financial instruments available in Malaysia.
Dokumen tersebut membahas tentang ijtihad dan mujtahid. Ia menjelaskan bahwa ijtihad adalah pengerahan segala daya untuk menghasilkan hukum syara' dari dalil-dalilnya. Ijtihad memiliki dasar hukum dari Al-Quran dan hadis. Objek ijtihad adalah hukum syara' yang tidak memiliki dalil qath'i. Seorang mujtahid harus memenuhi syarat-syarat tertentu seperti memiliki pen
lThis presentation includes the historical background of steps taken to implement Islamic Financial system in Pakistan. it also highlights the current challenges, probems and solutions
This document summarizes the historical development of Islamic banking from its origins in early Islamic civilization to the modern era. It discusses:
1) The beginnings of Islamic banking practices dating back to early Islamic history, with merchants conducting basic banking transactions.
2) The establishment of the first modern Islamic banks in the 1960s-1970s, starting with local savings banks in Egypt and then the Dubai Islamic Bank.
3) The growth and spread of Islamic banks globally from the 1970s onward, with many new banks being founded and conventional banks establishing Islamic windows. Regulatory bodies for Islamic finance also formed during this period.
Islamic finance has existed for over 1500 years but saw renewed growth starting in the 1960s. While not fully developed, it provides alternatives for devout Muslims who were previously locked out of many traditional financial vehicles. Islamic finance aims to comply with Sharia law, as determined by religious scholars. Some key differences from conventional finance include a prohibition on interest and a focus on asset-based transactions rather than currency-based loans. While similar financial outcomes can be achieved, Muslims see a distinction in the method used.
The document discusses Islamic finance and its growth. It provides details about a conference held by the National Bureau of Asian Research on Islamic finance in Southeast Asia. It summarizes the opening and closing keynote addresses which discussed linking Asia and the Middle East through sukuk markets, building a financial architecture through research, and managing regulatory challenges. The document also provides background on Islamic financial principles and the opportunities it provides through interregional linkages and new investment opportunities.
The document discusses several key international institutions in Islamic finance:
1. The International Islamic Financial Market (IIFM) works to standardize Islamic capital and money market products and documentation.
2. The International Islamic Liquidity Management Corporation (IILM) aims to enhance cross-border investment flows and financial stability in Islamic finance. It is headquartered in Kuala Lumpur and governed by several central banks.
3. Other organizations mentioned include the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB) which issues standards and guidelines for the industry.
This document provides an overview of the framework of the Islamic financial system. It begins with definitions of Islamic banking as a banking system that complies with Shariah (Islamic law). It then discusses the historical development of Islamic banking globally and locally in Malaysia in three phases from 1963-2010. Key events and milestones are highlighted. The document also outlines the framework and functions of Islamic banks, and compares features of conventional versus Islamic banks. Finally, it provides definitions and principles of Takaful (Islamic insurance) and highlights the history of the Takaful industry in Malaysia.
This document is a project report submitted by Rashida Ansari to her professor Nishikant Jha on the topic of Islamic banking. It includes an introduction outlining the objectives and methodology of the project. The project provides information on the history and concepts of Islamic banking, which prohibits interest and is based on profit and loss sharing. It also discusses the sources and uses of funds for Islamic banks and provides examples of Islamic banking practices in various countries.
The document outlines an Islamic finance workshop held in Dakar, Senegal in November 2013. It discusses the origin and principles of Islamic finance, which are based on ethical values of preserving faith, life, intellect, wealth and posterity for all. Islamic finance prohibits interest (riba) and involves profit/loss sharing and mark-up for trade financing. The outline discusses the growth of the global Islamic finance industry, including segments like Islamic banking, sukuk bonds, funds and microfinance. It notes the industry has grown to over $1 trillion in assets, with the majority in banking and located in the Middle East and Southeast Asia, though Africa is an emerging market.
The document provides an overview of Islamic banking including:
1. It discusses the history of Islamic finance which originated over 1500 years ago and saw growth during classical periods but declined under colonial rule before reviving in the 1960s.
2. It describes the inception of modern Islamic banking with the Dubai Islamic Bank in 1975 and the challenges it faced in a system dominated by interest-based conventional banking.
3. It highlights the success of Islamic banking with over 300 financial institutions managing $500-800 billion in funds and increasing recognition from international organizations.
The document discusses the principles of Islamic financial systems. It covers topics such as the fundamental principles of Islam like tawhid (unity of God), khilafah (vicegerency), and adalah (justice). It also discusses maqasid al-shariah (objectives of shariah), the strategy of Islamic economics, differences between conventional and Islamic financial systems, principles of Islamic banking like prohibition of interest and risk sharing, and objectives of seeking human welfare through allocating resources in accordance with Islamic teachings.
The search for alternatives to conventional
banking in the aftermath of the global financial
crisis trained the spotlights on Islamic banking
in many parts of the world.
- ThoughPaper by Infosys
The document provides an overview of Islamic banking, including its key concepts, history, differences from conventional banking, common financial contracts and products, future landscape, and challenges. The main points covered are:
1. Islamic banking is based on Sharia principles which prohibit riba (interest), gharar (uncertainty), and maisir (gambling). It aims to be asset-backed and promote risk-sharing.
2. Islamic banking has existed since the birth of Islam but modern Islamic banks first emerged in the 1960s-1970s. There are now over 600 Islamic banks worldwide managing over $1.4 trillion in assets.
3. Islamic banking differs from conventional banking in that it is based on partnership
Islamic banking provides financial services that adhere to Islamic law and avoid interest. It differs from conventional banking by prohibiting riba, or usury. The three main principles of Islamic banking are profit and loss sharing, asset backing, and the avoidance of uncertainty. Islamic banks also emphasize ethical investing and equitable distribution of wealth.
The document provides an introduction to Islamic banking, including its foundations in Islamic principles and prohibition of riba (interest). It discusses key concepts like sharia compliance, profit and loss sharing, and permissible financing structures. The summary also notes that Islamic banks operate under both sharia and country-specific banking laws and regulations.
The document presents an overview of various economic systems including capitalism, socialism, mixed economies, and the Islamic economic system. It discusses some of the key principles and concepts of each system, as well as potential issues or criticisms. Major sections include descriptions of permissible and prohibited activities in Islamic finance, along with challenges and opportunities in the Islamic finance industry.
This document summarizes an Islamic banking conference presentation about the common perceptions of Islamic banking, the current state of Islamic finance globally, and its future prospects. The presentation discusses how Islamic banking differs from conventional banking in avoiding interest and being asset-backed. It provides an overview of the growth of Islamic financial institutions and products around the world and their projected continued expansion in the future.
The document discusses major challenges facing Islamic banking and finance, including building capacity and awareness, developing proper legal and regulatory frameworks, addressing issues from globalization, establishing accounting and auditing standards, and ensuring compliance with Islamic principles prohibiting interest, speculative risk, and sinful activities. It emphasizes the need to build talent and expertise through education and training to strengthen the foundations and allow further growth of the industry.
This document provides an overview of Islamic banking in Malaysia. It begins by defining Islamic banking according to the Organization of Islamic Conference as banking activities based on Islamic law (Shariah) that follow the principles of fiqh muamalat. The document then outlines the objectives of Islamic banking and explains the need for Islamic banking in Malaysia's financial system. It provides details on the implementation of Islamic banking in Malaysia, including the establishment of the first Islamic bank in 1983. The document also compares Islamic banking to conventional banking and summarizes the various Islamic financial instruments available in Malaysia.
Dokumen tersebut membahas tentang ijtihad dan mujtahid. Ia menjelaskan bahwa ijtihad adalah pengerahan segala daya untuk menghasilkan hukum syara' dari dalil-dalilnya. Ijtihad memiliki dasar hukum dari Al-Quran dan hadis. Objek ijtihad adalah hukum syara' yang tidak memiliki dalil qath'i. Seorang mujtahid harus memenuhi syarat-syarat tertentu seperti memiliki pen
AL- IJTIHAD LA YANQUD BI IJTIHAD AND IZA IJTAMA’A AL-HALAL WA AL- HARAM GHALA...an nur
This document provides an introduction to legal maxims in Shariah law. It discusses the development of rules in early Islamic history and the role of legal maxims. Two key maxims are then examined in more detail:
1) "Ijtihad is not negated by ijtihad" which means that a ruling derived from diligent effort (ijtihad) to understand Islamic sources cannot be invalidated by another jurist's ijtihad, unless it contradicts clear evidence. This maxim originated from the companions of the Prophet Muhammad.
2) "When the permissible and impermissible occur together, the impermissible takes precedence" which provides guidance when situations involve both allowed and prohibited elements. The document
Teks tersebut membahas tentang latar belakang provinsi Nusa Tenggara Barat, Indonesia. Provinsi ini terdiri dari pulau Lombok dan Sumbawa, dengan ibu kotanya di Mataram, Lombok. Mayoritas penduduknya berasal dari suku Sasak dan memeluk agama Islam. Teks ini juga menjelaskan tentang rumah adat, pakaian adat, tarian tradisional, kerajinan, upacara adat, dan alat musik yang berasal dari Nusa Tenggara Barat.
This document discusses the history and prohibition of riba (usury) in Islam. It begins by explaining how riba originated from goldsmiths in ancient times issuing receipts for gold and silver deposits and lending excess funds for a fee. It then summarizes the four phases by which the prohibition of riba was gradually revealed to Muslims through the Quran and hadiths. Finally, it provides definitions of riba from Islamic sources and discusses how the final prohibition was revealed just before the Prophet's death, establishing a clear distinction between trade and riba.
This document compares and contrasts different economic systems including capitalism, socialism, communism, and the Islamic economic system. It outlines key principles of each system such as private ownership, profit motive, and egalitarianism. It also discusses flaws like lack of moral limitations in capitalism and loss of individual incentive in socialism. The Islamic system focuses on distribution of wealth, guaranteeing basic needs, and prohibiting interest while encouraging investment. The document recommends positive economics to analyze actual behavior and normative economics to prescribe how behavior should be.
This document provides an overview of key concepts from Chapter 5 on the time value of money. It discusses compound interest and future value, explaining how money grows over time with compounding. It also covers present value and how to determine the current value of future cash flows. Additionally, the document defines annuities and how to calculate future and present values of annuity streams. It explores other topics like amortized loans, effective interest rates, and perpetuities. The overall purpose is to explain fundamental time value of money principles for valuing financial instruments with cash flows that occur over multiple time periods.
Hukum Islam memiliki beberapa karakteristik khusus yang membedakannya dari hukum umum. Tiga karakteristik pentingnya adalah bersifat universal dan abadi, tidak memberatkan manusia, serta mengatur semua aspek kehidupan manusia untuk kemaslahatan mereka di dunia dan akhirat.
Time Value of Money: Islamic & Conventional PerspectiveLaila Azhan
This document discusses the differences between riba (interest) and the time value of money concept from Islamic and capitalist perspectives. It notes that riba involves the addition of excess to loans or debts as interest, while the time value of money concept recognizes the difference in value between money received now versus in the future. Islam views money as a medium of exchange and commodity for purchasing goods and services, but not as a capital that has intrinsic time value. Capitalism allows money to be lent, invested, and treated as a capital with time value. The document provides references on the prohibition of riba in Islamic finance and reconciling this with time value concepts.
The document provides an overview of Islamic finance and banking. It defines Islamic finance as financial business that complies with Shariah (Islamic law) and avoids elements like interest, gambling, and uncertainty. It discusses the history and concepts of Islamic banking, highlighting that relationships are based on profit and loss sharing rather than debt. Common Islamic banking products and contracts are explained such as Murabahah, Mudarabah, Musharakah, Ijara, Salam and Sukuk. The global growth of the industry is summarized. In conclusion, it is stated that Islamic banking has grown significantly in the last 40 years while adhering to risk-sharing models of finance.
Growth of economy thorough islamic banking Hamail A Ahmed
Islamic banking originated from partnerships established by the Prophet Muhammad where capital, labor, and entrepreneurship were combined to share profits and losses. Islamic banks in Pakistan include Meezan Bank, Habib Bank, and Bank of Khyber. Despite Indonesia being majority Muslim, Islamic banking assets only account for 5% of total banking assets, showing room for growth. The Indonesian government aims to increase this to 15% by 2023 through various strategies. Key advantages of Islamic banking include prohibiting interest and speculation, emphasizing real economic activity, and profit/loss sharing. However, issues related to liquidity management, asset valuation, and monetary policy implementation remain challenges for Islamic banking.
A detailed presentation on the theme, concept and benefits of Islamic Banking. The statistics however are old as the author presented it way back in 2005.
Islamic banking is gaining popularity globally as an interest-free alternative to conventional banking that complies with Sharia (Islamic law). Some key financing models used in Islamic banking include Mudarabah (profit-loss sharing), Murabahah (cost-plus sale), and Ijarah (leasing). While Islamic banks operate similarly to conventional banks in mobilizing deposits and allocating funds, they prohibit interest and invest funds using Sharia-compliant contracts. The emergence of Islamic banking has provided an innovative financial system, though it faces challenges in developing new products to better compete with conventional banks.
This document provides an overview of Islamic banking systems. It defines Islamic banking as financial institutions that operate according to Islamic economic and financial principles. The objectives of Islamic banking are outlined as offering financial services, facilitating stable money value, promoting economic development, equitable resource distribution, and profit/loss sharing. A brief history of Islamic banking development is given, including the establishment of the first Islamic banks in Somaliland in 2012. Differences between Islamic and conventional banking systems are mentioned.
The global Islamic finance industry has grown rapidly over the past decade and now manages over $1 trillion in assets. Several factors are driving continued growth, including increased capital from Muslim-majority countries, the rise of Islamic multinationals, and growing retail demand. While the industry has potential to tap into the large Muslim population worldwide, it still needs to educate customers and differentiate itself more from conventional finance. Regulatory challenges and a lack of skilled professionals could hamper further expansion.
This document discusses Islamic microfinance cooperatives as a means to meet the financial needs of communities. It provides an overview of microfinance and its evolution, then discusses Islamic microfinance models including village banks, qard al-hasan, and the Grameen Bank model. The cooperative movement and credit unions are examined as viable structures for Islamic microfinance. The document presents the case study of Al Barakah Multi-purpose Cooperative Society in Mauritius, which operates as an Islamic microfinance cooperative providing various financial products and services in accordance with Islamic principles. Challenges and opportunities for projects with Al Barakah are also mentioned.
Islamic Banking: Inclusion in the Indian Banking SectorIOSR Journals
Innumerable changes have been witnessed in the Indian banking sector since last six decades. Various generations of financial sector reforms has changed the face and complexion of the Indian Banking Sector which is adopting various innovative practices with the focus on inclusive growth. Islamic banking is one such practice which is being considered in full fledged manner which otherwise has been practiced in an informal way. Islamic banking has set its foot on the path of rapid growth throughout the globe and India could not be isolated from it, looking at immense potential. The 1st Ernst & Young World Islamic Banking Competitiveness Report 2011 presented at the 18th Annual World Islamic Banking Conference stated that Islamic banking assets with commercial banks globally will reach US$1.1 trillion in 2012, a significant jump of 33% from their 2010 level of US$826 billion. The conventional banking as practiced by the Indian banking sector in its present form does stand in the way of the principles of Islamic banking which prohibits transaction on the basis of interest and operate on profit and loss based on Islamic principles. Introduction of interest free banking will require a lot of changes in the Banking Regulation Act.
Islamic banking provides interest-free banking that complies with Shariah law. It distinguishes itself from conventional banking by being asset-backed and avoiding interest, gambling and excessive uncertainty. The presentation provided an overview of Islamic banking principles and operations, including how it has grown in Pakistan and internationally in recent years. Islamic banking aims to achieve well-being for all in accordance with divine guidance.
The document provides an introduction to Islamic microfinance. It discusses the differences between Islamic and conventional microfinance, highlighting that Islamic microfinance is based on risk-sharing partnerships rather than interest-bearing loans. Various Islamic microfinance products are described, including modes based on trade, partnership, and rental. The progress and growth of Islamic banking internationally and in Pakistan is also summarized.
The document provides an introduction to Islamic microfinance. It discusses the differences between Islamic and conventional microfinance, highlighting that Islamic microfinance is based on risk-sharing partnerships rather than interest-based lending. Various Islamic microfinance product structures are described, including modes based on trade, partnership and rental. The progress and growth of Islamic banking globally and in Pakistan is also summarized.
Risk-Sharing in Islamic Finance: Implications for Financial StabilitySDGsPlus
1) Islamic finance has grown rapidly over the past decades and now totals around $1 trillion in assets globally, with continued prospects for expansion.
2) Islamic banks were not directly exposed to toxic assets during the financial crisis, and studies found their profitability was less impacted due to risk-sharing business models.
3) However, Islamic financial institutions were still impacted by real economic effects like increased loan losses and some sukuk defaults.
The document provides an overview of Islamic finance and banking. It begins with definitions of Islamic finance and an introduction to Islamic banking principles. It then contrasts conventional and Islamic banking, outlining some key differences such as the prohibition of interest in Islamic banking. The document outlines several principles of Islamic finance including risk sharing and ensuring economic activities are permissible. It also defines several common Islamic financial instruments and provides a brief history of Islamic banking since the 1960s.
The document provides an overview of Islamic finance and banking. It begins with definitions of Islamic finance and an introduction to Islamic banking principles. It then contrasts conventional and Islamic banking, outlining some key differences such as the prohibition of interest in Islamic banking. The document outlines several principles of Islamic finance, including risk sharing and economic activity. It also describes some common Islamic financial instruments and the history of Islamic banking since the 1960s.
This document discusses opportunities for Islamic finance in Australia. It provides an overview of Crescent Investments Australasia, which focuses on Shariah compliant wealth management products. It notes that Australia's Muslim population is growing and represents over $3 billion in household purchasing power. The document outlines what Islamic finance entails, including prohibiting interest and emphasizing profit/loss sharing and asset-backed transactions. It acknowledges legislative challenges around taxation but highlights opportunities in areas like Islamic superannuation funds, which could represent $3-6 billion in assets. Overall the document argues there is significant potential to expand Islamic finance in Australia.
Islamic banking has grown rapidly over the last decade to become a more than $2 trillion industry globally. It provides several key advantages over conventional banking, including promoting financial justice by sharing profits and losses between lenders and borrowers, increasing financial inclusion for Muslims, reducing investments in industries like alcohol and gambling, strengthening financial stability by taking a more cautious approach, and emphasizing ethical and moral values. As the demand for Islamic banking increases, over 50,000 new professionals will be needed in the industry in the coming years.
The document outlines various Islamic investment and financing structures including debts-based structures like murabaha, bai al-inah, and bay salam; equity-based structures like musharakah and mudarabah; leasing structures like ijara and ijara-wa-iqtina; and services like hawala and kafala. It provides details on how each structure works in accordance with Shariah principles like risk-sharing and prohibition of interest.
Similar to Islamic finance-presentation-surabaya (20)
1. Recent Issues in Islamic
Finance and Modern
Economy
Presented by:
Associate Professor Ishaq Bhatti
School of Economics and Finance
Faculty of Law and Management
E-Mail: i.bhatti@latrobe.edu.au
2. Islamic Finance and Modern Economy
Plan of Presentation (Two Parts)
1. Main principles of Islamic Finance –Ban Riba, +Equity,
profit loss sharing & Zakat Mechanizm
2. Difference between IF and Conventional Finance (Riba),
+regulations, Basel, ISO
3. Shariah Compliancy
4. Governance of Islamic Finance / Funds –Shariah
5. Global growth in IF – An eye view!
6. Human capital development – An Issue!
7. La Trobe’s role in human capital development in IF
8. LTU’s MIBF program and future plans
9. Question & Answer session
2
3. Islamic Finance and Modern Economy
1. Main Principles of IF
A) Complete ban on Riba or Usury
–
• Traditionally complete ban on interest based
financial activities
• Charging interest is immoral, it gives steady
payment to the lender regardless of the
financial situation of the market and the
borrower – one way traffic!
• Profit - MA function of (inflation, service
charges - subjective time value of money)
3
4. Islamic Finance and Modern Economy
B) Promotion of Paradigm of Fairness and
Equity
• Equitable distribution of wealth and economic
resources within the community
• Depositing into the bank is like shareholder in a joint
venture
• Local Govt & Community responsibility: Shelter,
Food & employments
• Time value of money – Math
4
5. Islamic Finance and Modern Economy
C) Profit and Loss Sharing
• Liabilities are shared between borrower and
lender
• IF operates on partnership bases. Proportional
distribution of profit and loss between
borrower & lender
• Facilitate productive investments
• Shared Risk between borrower and lender
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6. Islamic Finance and Modern Economy
D) Zakat Mechanism
• Zakat Sytem – required distribution of wealth from
top to bottom (Profit & Zakat – two way!)
• A fund set up out of the 2.5% annual contribution
from accumulated financial assets of individual,
communities – required by Shariah law which seeks
to encourage the distribution of wealth to poor and
needy in the community.
• Eliminates poverty and encourage investments and
the circulation of money and goods & services in the
market place
• Leads to sustainable economic & financial growth
6
7. Islamic Finance and Modern Economy
2. IF differ from conventional finance
Islamic Finance Conventional Finance
-No interest, Ban on Riba -Riba Based (Human history of
-Asset based suffering) -
-Ban on trading assets which is NOT -Debt based
owned by the trader -Encourage short selling
- IF limits investments to Shariah -Basel I, II, ISO standard
compliance (Regulatory body???) -Conventional finance allows any
- Ban on short selling investments generally without
reference to community impacts
- Prohibits harmful investment
- High risk High return, Low risk low
e.g.: smoking, sex, drugs, weaponry
industry return
-Weaponry industry
- Objective is community welfare -
-Theory of Global maximization – the primary objective is to maximise
7
8. Islamic Finance and Modern Economy
IF v/s Riba based CF
• Barkah of IF – continues growth during Khilafat-e-
Rashda and after ward in Islamic Societies till 13th
centuries –Spain, Mughals, Othman’s etc – All faith
happily lived together in one neighborhood, harmony,
peace, love global eco growth
• Curse of Ribah – Suffering of humanity, division in
human society, poor, rich, religion, race, colour,
language – Curse of colonialization, WW I, WWII,
Game of greed, as a result current global financial
crises!!!
8
9. Islamic Finance and Modern Economy
3. Shariah Compliancy
• Islamic Jurisdiction –Fiqh muamlat, assuludin
Fundamentals of Shariah , Halal vs Haram
• Islamic Commercial Laws
• Islamic legal system associated with financial
activities – regional Shariah Board
• International law of business and Finance
management (International Shariah
Compliancy council) under IDB, UN, WTO
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10. Islamic Finance and Modern Economy
4. Governance of Islamic Funds –Shariah
Compliance
• Transparency in Islamic funds asset management – no
speculation, no short selling, halal supply of money
• New guidelines for financial disclosure
• Data collection & comparative statistics
• Regularity limitation – free market
• Shariah compliancy – Shariah advisory Board
(Members: Shariah experts, Islamic commercial law,
experts in finance, nominee of local govt and/or
community member, accounting & zakat auditor)
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11. Islamic Finance and Modern Economy
Corporate Governance
• Western definition as the rules and regulation that
define the relationships between shareholders,
managers, creditors, the government and other
stakeholders in their rights and responsibilities.
• Processes and structures to direct and manage the
company towards enhancing business growth and
realizing long term shareholder value, at the same
time taking into account the interests of other
stakeholders.
11
12. Islamic Finance and Modern Economy
Corporate Governance
Corporate Governance in Islamic Financial Institutions
• Western definition as the rules and regulation that
define the relationships between shareholders,
managers, creditors, the government and other
stakeholders in their rights and responsibilities.
• Processes and structures to direct and manage the
company towards enhancing business growth and
realizing long term shareholder value, at the same
time taking into account the interests of other
stakeholders.
12
13. Islamic Finance and Modern Economy
The Corporate Governance Structure
Corporate Governance in Islamic Financial Institutions
13
15. Islamic Finance and Modern Economy
5. Global growth of IF
• The Islamic Finance market is still small
compared to the conventional market but the
potential for growth is enormous
• For example during current financial crises –
Dow Jones’s Islamic Financials index rose
4.75% (September quarter – The Economist)
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18. Islamic Finance and Modern Economy
Development in the Islamic Finance industry
• The Islamic banking and finance market is growing at a rate of
15% to 20 % per year.
• There are more than 265 Islamic financial institutions
operating worldwide.
• Islamic financial institutions are claimed to manage $750
billion to $1 trillion assets.
• This is equivalent to Australian share market's total current
value
18
19. Islamic Finance and Modern Economy
Gulf Region
• In Iran and Saudi Arabia more than 95% of all
retail banking transaction are done by Islamic
banks.
• It is expected that Islamic finance will be the
mainstream finance in the rest of the Gulf
region in a couple of decades.
19
20. Islamic Finance and Modern Economy
In Malaysia
• Islamic institutions are expected to capture
20% of the market share of assets owned by
2010.
• Malaysia is a HUB of Islamic Finance
Education
20
21. Islamic Finance and Modern Economy
Indonesia, Brunei, Singapore, India, Pakistan and Bangladesh
• Many countries are developing main stream
Islamic Finance products with Shariah
compliance
• As per Economist, almost all Muslim countries
are developing Islamic banking and finance
windows to cater increasing demand
• Western countries are also shown a great
interest eg., London Islamic Bank, Euro zone,
OZ&NZ – Vic govt law, NAB, HSBC, KFH, 21
22. Islamic Finance and Modern Economy
International Banking Community Response
• This immense growth has prompted major banks to set up
Islamic financial windows to take advantage of this growing
demand.
• The industry is likely to capture the savings of current 1.6
billion Muslims around the world.
• As per Banker’s Magazine, recent report - Islamic Finance
industry required 50,000 staff for next 7 to 10 years.
• La Trobe is taking a leadership rule in training Islamic Finance
Human Capital in launching Professional Master in Islamic
Banking and Finance (MIBF), the 1st in Australasia.
22
23. Islamic Finance and Modern Economy
6. Human Capital Development in IF
• Growing industry requires trained professional staff
• Financiers and bankers need to understand the
principles, operations, techniques and mechanism of
Islamic finance and financial products as well as the
dynamics of Islamic financial and capital markets.
• Understanding of Shariah/Islamic Commercial laws,
Shariah Board structure
• Professional certified qualification
• LTU & INCEIF’s MOU, NAB, MCCA,KFH
23
24. Islamic Finance and Modern Economy
La Trobe’s Role in Human Capital Development
• The new Master of Islamic Banking and Finance
(MIBF) will position La Trobe University to be a
main player in providing human capital for this
growing area of finance
• The aim of MIBF is to cater for the global
growing demand for human capital in the field of
Islamic banking and finance.
24
25. Islamic Finance and Modern Economy
LTU’s Vision
• To be the knowledge leader in Islamic banking
and finance in Asia- Pacific Rim, particularly,
Australia & NZ
• Trained Professionals with joint certification
CFA/CIFP
• Actively involved in Global Association of
Risk Professionals with reference to IBF
25
26. Islamic Finance and Modern Economy
La Trobe MIBF Program
• Aims to provide required knowledge, skills
and expertise
• Prepare students for CIFP part 1
• Joint master MFA/MIBF and MPA/MIBF–
CFA/CIFP
• Seeks to prepare students to enter and work in
the Islamic financial sector both overseas and
in Australia.
26
27. Islamic Finance and Modern Economy
Future Plans of La Trobe’s - MIBF
• Three tier Teaching and Learning Proposal
a) MIBF – 5 compulsory Shariah based subjects
b) MIBF (Hons) –Lead to thesis
c) Short courses
• Fourth tier extension to Doctorate Program
• Scientific Research Chair in Islamic Finance
27
28. Islamic Finance and Modern Economy
Our Staff & Facilities
• Our staff are experts in main stream finance, Risk analysis,
financial econometrics and they have professional connections
in international universities, Bangladesh, Malaysia, Pakistan,
INCEIF, UAE, Oman and King Saud University, Saudi Arabia
and the rest of the GCC and Islamic Countries
• LTU staff have contributed to the teaching/learning of Islamic
economics and finance and researching on current issues
related to Islamic Banking & Finance
• School of Economics and Finance at LTU have state of the art
computing facilities, E-views, GAUS, Minitab, RAT, SPSS
packages with updated data analysis facilities – the best place
to train and meet the market demand of a growing area of
Islamic banking Finance
28
ECO5SBF - Time Value of Money This is presentation is brief summary. It may be divided into many parts and each part itself require few hours to justify. A plan of my presentation is as follows
ECO5SBF - Time Value of Money Let we begin with topic 1 – Main Principles
ECO5SBF - Time Value of Money If interest is ban how to compute Bank’s expenses – profit Now, it’s a challenge for Shariah experts – Mufteess to understand Mathematics to compute TIME VALU OF MONEY
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ECO5SBF - Time Value of Money B 4 summarizing the Barkah of Islamic Finance – Economic History of Muslims (Mughals, Spain, Othman’s etc) – no problems in human societies, all faith people live with harmony & Qahar – Curse of Riba – Global Colonialisation of human societies , after 14 centuries, WW I & II, Now global Financial crise Let me first define the word Riba
Let we begin with the question how to govern Islamic Funds –Shariah compliancy in IF ECO5SBF - Time Value of Money
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ECO5SBF - Time Value of Money Example title for notes and handouts 5 April 2013 Example footer for notes and handouts This slide uses the Title and text slide layout. Add a title by clicking on the title box Add information into the bulleted list area by typing the text, and pressing RETURN to create new bullets. The look of the bullets and the text is defined by the design template. To indent your bullet points press the <tab> key. To change the footer information Select View / Header and Footer and change the “Example presentation title” information.
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