The document defines ijarah as a contract to give exclusive possession of physical properties or to render services to a person in return for some rental or wages for a specified period. It has two contracting parties - the owner/service provider (lessor) and the party receiving benefits/services (lessee). There must be a formal offer and acceptance (sighah) between the parties, and the benefit/service provided must be of value and permissible to both parties. Rental/wages paid cannot involve elements of usury and must be agreed upon by both parties.
The document discusses the concept of Mudarabah, an Islamic financing structure. Mudarabah is a partnership between an investor and a manager, where the investor provides capital and the manager provides labor/expertise. Profits are shared according to a pre-agreed ratio, while losses are borne solely by the investor. The document outlines the key elements of Mudarabah contracts including capital requirements, management roles, profit/loss distribution, and termination procedures. It also compares Mudarabah to other structures like Musharakah and analyzes various risks in Mudarabah like credit, market, and liquidity risks.
Ijarah is a lease contract that allows the transfer of usufruct or benefit of an asset for an agreed upon rental payment over a specified period of time. There are two main types of ijarah: operating ijarah, which is a basic lease; and financial ijarah (ijarah muntahia bittamleek), where ownership is transferred to the lessee at the end of the lease period. The document outlines various rules and conditions for ijarah contracts including asset identification and ownership, rental determination, risk and responsibilities of lessor and lessee, and termination conditions. It also discusses the accounting treatment and application of ijarah. Diminishing musharakah is described as
The document provides an overview of Muamalat (Islamic commercial transactions) and defines the elements of a contract in Islamic law. It discusses the four essential elements of a contract: [1] the contracting parties, [2] the form of the contract through offer and acceptance, [3] the subject matter and price, and [4] the purpose and effect of the contract. It then describes different types of contracts in more detail, including contracts of ownership through exchange or charity, security contracts, partnership contracts, and more. The document also discusses capacity and impediments to capacity for entering into contracts.
This document discusses the concept of al-rahn in Islam. It begins by defining al-rahn as taking a property as security against a debt such that the secured property can be used to repay the debt if not paid. It then discusses evidence for al-rahn from the Quran, hadith, and scholarly consensus. The key pillars and flows of an al-rahn contract are explained. Benefits include being interest-free and protecting women's assets. Conditions address the contract parties, the pledged object and debt. Modern applications include use of documents and valuables. Al-rahn aims to ensure debt repayment in a fair and transparent manner.
This document provides information on various Islamic financing concepts, including Al-Ijarah, Al-Ijarah Thumma Al-Bai (AITAB), and their application in motor vehicle financing.
Al-Ijarah refers to a leasing or rental contract where the lessor provides the lessee use of an asset for a fixed rental payment. There are two types - Al-Ijarah 'Amal for hiring services or labor, and Al-Ijarah 'Ain for hiring assets. AITAB combines two separate contracts - an initial Ijarah contract followed by a sale contract (Bai') at the end of the lease period, allowing the lessee to purchase the asset
Ijara, or leasing, allows the transfer of usufruct of an asset to another party for an agreed rental payment over an agreed period of time. The lessor retains ownership of the asset's corpus. Basic rules require the asset be identifiable and usable without consuming, the rental be determined upfront for the full period, and the lessee only use the asset for specified purposes. Responsibilities include the lessor bearing ownership costs and liability, while the lessee is liable for normal wear and tear. Issues discussed include expenses, rental recovery, price increases, and ensuring sale and leaseback transactions genuinely transfer ownership rather than just providing liquidity.
This document discusses the application of Shariah principles in Islamic financial transactions through the use of various commercial contracts. It provides an overview of key Islamic financial services like Islamic banking, capital markets, and takaful. It then examines some major contracts used in Islamic finance like murabahah, bay' bithaman ajil, ijarah, and their applications in asset financing and sukuk issuance. The document notes that murabahah and BBA are sale contracts that can be used for both short-term and long-term financing, and discusses the basic structure of using murabahah/BBA in Malaysian sukuk. It also provides details on the ijarah lease contract and its
The document discusses the concept of Mudarabah, an Islamic financing structure. Mudarabah is a partnership between an investor and a manager, where the investor provides capital and the manager provides labor/expertise. Profits are shared according to a pre-agreed ratio, while losses are borne solely by the investor. The document outlines the key elements of Mudarabah contracts including capital requirements, management roles, profit/loss distribution, and termination procedures. It also compares Mudarabah to other structures like Musharakah and analyzes various risks in Mudarabah like credit, market, and liquidity risks.
Ijarah is a lease contract that allows the transfer of usufruct or benefit of an asset for an agreed upon rental payment over a specified period of time. There are two main types of ijarah: operating ijarah, which is a basic lease; and financial ijarah (ijarah muntahia bittamleek), where ownership is transferred to the lessee at the end of the lease period. The document outlines various rules and conditions for ijarah contracts including asset identification and ownership, rental determination, risk and responsibilities of lessor and lessee, and termination conditions. It also discusses the accounting treatment and application of ijarah. Diminishing musharakah is described as
The document provides an overview of Muamalat (Islamic commercial transactions) and defines the elements of a contract in Islamic law. It discusses the four essential elements of a contract: [1] the contracting parties, [2] the form of the contract through offer and acceptance, [3] the subject matter and price, and [4] the purpose and effect of the contract. It then describes different types of contracts in more detail, including contracts of ownership through exchange or charity, security contracts, partnership contracts, and more. The document also discusses capacity and impediments to capacity for entering into contracts.
This document discusses the concept of al-rahn in Islam. It begins by defining al-rahn as taking a property as security against a debt such that the secured property can be used to repay the debt if not paid. It then discusses evidence for al-rahn from the Quran, hadith, and scholarly consensus. The key pillars and flows of an al-rahn contract are explained. Benefits include being interest-free and protecting women's assets. Conditions address the contract parties, the pledged object and debt. Modern applications include use of documents and valuables. Al-rahn aims to ensure debt repayment in a fair and transparent manner.
This document provides information on various Islamic financing concepts, including Al-Ijarah, Al-Ijarah Thumma Al-Bai (AITAB), and their application in motor vehicle financing.
Al-Ijarah refers to a leasing or rental contract where the lessor provides the lessee use of an asset for a fixed rental payment. There are two types - Al-Ijarah 'Amal for hiring services or labor, and Al-Ijarah 'Ain for hiring assets. AITAB combines two separate contracts - an initial Ijarah contract followed by a sale contract (Bai') at the end of the lease period, allowing the lessee to purchase the asset
Ijara, or leasing, allows the transfer of usufruct of an asset to another party for an agreed rental payment over an agreed period of time. The lessor retains ownership of the asset's corpus. Basic rules require the asset be identifiable and usable without consuming, the rental be determined upfront for the full period, and the lessee only use the asset for specified purposes. Responsibilities include the lessor bearing ownership costs and liability, while the lessee is liable for normal wear and tear. Issues discussed include expenses, rental recovery, price increases, and ensuring sale and leaseback transactions genuinely transfer ownership rather than just providing liquidity.
This document discusses the application of Shariah principles in Islamic financial transactions through the use of various commercial contracts. It provides an overview of key Islamic financial services like Islamic banking, capital markets, and takaful. It then examines some major contracts used in Islamic finance like murabahah, bay' bithaman ajil, ijarah, and their applications in asset financing and sukuk issuance. The document notes that murabahah and BBA are sale contracts that can be used for both short-term and long-term financing, and discusses the basic structure of using murabahah/BBA in Malaysian sukuk. It also provides details on the ijarah lease contract and its
This document discusses the Islamic concept of Qard, which is an interest-free loan. It defines Qard as the transfer of ownership of fungible wealth to a borrower, who must return a similar amount. For a valid Qard contract, the lender and borrower must have legal capacity, and the subject of the loan must be fungible wealth. The loan can stipulate the place and time period of repayment. It is forbidden for the lender to demand any excess benefit from the borrower. While lending institutions can charge service fees equivalent to actual costs, they cannot charge amounts exceeding costs, and indirect expenses cannot be included.
The document defines and discusses the Islamic financing concept of al-ijarah. Some key points:
- Al-ijarah refers to a lease or rental contract in which one party allows another to use an asset for a fee. It is distinguished from a normal sale by having a specified time period.
- The pillars of al-ijarah include the owner (mu'ajjir), user (musta'jir), asset (ma'jur), benefit/usufruct (manfaah), fee (ujrah), and offer/acceptance (sighah).
- A major modern application is al-ijarah thumma al-bay', where a lease
1. Murabaha is an Islamic financing technique where a financier purchases an asset for a customer and sells it to them at an agreed upon higher price, incorporating a disclosed profit amount.
2. It involves the customer first requesting the purchase from the financier. The financier then appoints the customer as an agent to identify and procure the asset. Once purchased, ownership is transferred to the financier before being sold to the customer.
3. The transaction involves two separate contracts - one where the customer acts as the financier's agent in purchasing the asset, and another where the customer acts as buyer and the financier as seller, with ownership transferring upon sale. This ensures risks are properly assumed under
1) Islamic banks obtain funds from deposits and use those funds to finance various approved investment activities like trade financing. More than 75% of funds come from deposits.
2) Financing must follow Shariah principles like prohibiting interest and uncertainty and balancing individual and societal needs.
3) The bank uses modes like murabahah, ijarah, mudharabah and musharakah with different structures for purchasing, leasing or jointly investing in assets and sharing profits and losses according to capital contributions.
1) Mudarabah is a partnership agreement where one party provides capital while the other provides labor and management skills, with profits shared between the parties according to a predetermined ratio.
2) In mudarabah, the capital provider is called rabb-ul-maal and the manager is called the mudarib. The mudarib manages the business while the rabb-ul-maal does not interfere.
3) Mudarabah can be used by Islamic banks for investment purposes and financing projects, businesses, and private equity through profit-sharing with entrepreneurs. Deposits from customers to banks are treated as rabb-ul-maal funds to be invested by the bank as mudarib.
1) This document discusses the Islamic finance contracts of Salam and Istisna'a, which are forward sales agreements. Salam involves payment in advance for goods to be delivered later, while Istisna'a is an agreement with a manufacturer to produce specified goods.
2) The key aspects of Salam contracts discussed include the requirements for specifying price, commodity, delivery date/location. Istisna'a similarly requires specifying the manufactured item. Parallel Salam and securitization of Salam contracts are also mentioned.
3) The objectives, features, and risks of Salam and Istisna'a contracts are analyzed, and their differences from Murabaha contracts are highlighted
A Musharakah contract is an agreement where two or more parties contribute capital to establish a new project or share in an existing project. There are different types of partnerships (shirkah) including shirkat-ul-milk for joint property ownership and shirkat-ul-aqd for commercial partnerships. Shirkat-ul-aqd can be based on capital contributions (shirkat-ul-amwal), work/skills (shirkat-ul-aamal), or reputation (shirkat-ul-wujooh). The rules of Musharakah require capital contributions to be clearly defined, profits and losses to be shared based on capital ratios, and termination procedures in cases such as
The document discusses the concept of ijarah in Islamic finance, which refers to a leasing contract where an asset is leased to a client in exchange for rental payments over a period of time. It provides details on the different types of ijarah contracts, including operating ijarah and ijarah muntahia bit tamleek, and explains the accounting treatment for ijarah transactions according to the Financial Accounting Standard No. 8.
There are several types of sukuk discussed in the document. Istisna'a sukuk involve project financing where funds are advanced for supplies/labor and repaid from project revenues. Salam sukuk involve the purchase of commodities on a deferred delivery basis, with full payment up front. Ijarah sukuk involve the purchase of tangible assets by an SPV from an originator which are then leased back, with rental payments funding returns to sukuk holders. Mudharabah and musharakah sukuk also exist but are not described in detail. Each structure aims to comply with Shariah principles while providing financing.
This document discusses key concepts in Islamic contract law:
1. It defines a contract as an agreement between two or more parties through offer and acceptance regarding a subject matter, with mutual consent called an Aqd.
2. It outlines important terminologies - undertaking, unilateral promise, and bi-lateral promise - and distinguishes between promises and contracts.
3. It explains the basic elements of a valid Islamic contract, including specified parties and subject matter, offer and acceptance, and transfer of ownership.
The document provides an introduction and overview of several Islamic financial concepts:
- Takaful is an Islamic insurance concept based on mutual assistance and guarantee, where participants contribute to a common fund to provide mutual indemnity in case of loss.
- Sukuk are Sharia-compliant bonds where ownership of underlying assets is transferred to investors rather than fixed interest payments.
- Salam allows advance payment for goods to be delivered later, with specified quality, measure, weight and delivery time.
- Gharar refers broadly to deception and uncertainty that may lead to destruction or loss.
- Ijarah is a leasing agreement where a lessor leases an asset to a lessee in exchange for
Ijarah is an Islamic lease agreement where one party (the lessor) leases an asset to another party (the lessee) in exchange for a rental payment. There are basic principles that govern ijarah, including pillars like offer and acceptance between the two parties, a specified rental payment, and a clearly defined leased asset. Ijarah agreements must also comply with Sharia rules regarding timely payment of wages, responsibilities of parties, and termination conditions. Key issues in structuring ijarah include ensuring rental payments are not interest-based and addressing insurance, maintenance, ownership registration, and compliance oversight by a Sharia board.
Ijara or leasing is an Islamic financing contract where the financier buys an asset and leases it to a business owner for a rental fee. There are several types of ijara contracts: basic ijara for leasing services or assets; ijara muntahia bittamleek which allows the lessee to purchase the asset; and al-ijarah wa al-iqtina which is a lease-to-own agreement commonly used for home financing. The ijara contract must meet conditions such as clearly specifying the purpose and responsibilities of both parties, and cannot involve uncertainty around prices, interest, or penalties.
Ijarah is an Islamic financing method where a lessor leases an asset to a lessee for an agreed upon rental payment. There are three key points:
1) Ijarah allows the use of an asset but ownership remains with the lessor, who bears risks related to ownership. The lessee bears risks related to use of the asset.
2) Rental payments and sale of the asset must be structured separately to avoid making the lease contingent on sale.
3) Rules governing ijarah require the asset to be identified and the lease period determined. Rent can be set ahead of time but not increased unilaterally. The lessee bears costs of use while the lessor
1. The document describes an Ar Rahnu facility provided by RHB Islamic Bank, where a customer can obtain a loan by pledging gold jewelry as collateral.
2. Under the agreement, the bank provides the loan to the customer based on a Qardh Hassan contract and keeps the jewelry in safe custody as collateral (Rahn) based on Wadiah Yad Amanah, charging the customer a safekeeping fee.
3. If the customer repays the full loan amount and fees by the maturity date, the bank returns the jewelry, but if the customer defaults, the bank has the right to auction the jewelry to recover the loan.
Here are the steps to setup the Musharakah company for Case 1:
1. Partner A and Partner B form a Musharakah company on Jan 1 with a capital contribution of Rs. 10 million and Rs. 5 million respectively.
2. The company operates throughout the year and earns a profit of Rs. 3 million by Dec 31.
3. As per the agreed ratio, the profit of Rs. 3 million is distributed between Partner A and Partner B in the ratio of their capital contribution i.e. Partner A receives Rs. 2 million (10/15 of Rs. 3 million) and Partner B receives Rs. 1 million (5/15 of Rs. 3 million).
4.
Islamic banking adheres to Shariah law, which prohibits interest and investing in businesses involving activities like gambling, alcohol, or pork. It utilizes profit and loss sharing models like murabaha, where the bank purchases an asset and sells it to a customer at a markup, and salam, where payment is made in advance for future delivery of a commodity. Salam contracts help farmers obtain financing but both parties face price risk until delivery is made. Islamic banks sometimes use parallel salam contracts to hedge their own price risk from the initial salam.
The document provides an overview of Islamic banking products and their operational mechanisms. It discusses various Islamic financial contracts/modes such as Murabaha, Istisna, Salam, Ijarah, Musharakah, and Mudarabah. For each mode, it describes the concept, provides an example, and explains the basis of its Shariah permissibility. It also discusses key differences between Islamic and conventional banking and common misconceptions about Islamic banking.
Introduction to islamic banking by rehan nisarRehan Nisar
The document provides an introduction to Islamic banking, explaining why it exists, what it is, and how it differs from conventional banking. It states that Islamic banking operates according to Sharia principles of equal distribution of wealth and social justice. It then defines Islamic banking as banking compliant with Sharia law and defines some of its key features, including profit and loss sharing and asset-based financing. The document proceeds to contrast Islamic and conventional banking and outlines some common Islamic banking services like partnership, trade, and rental-based financing structures.
There are two types of riba (interest) prohibited in Islam:
1) Riba al-nasiyah (interest on loans) which refers to any predetermined increase on a loan based on time.
2) Riba al-fadl (interest in exchange) which occurs when exchanging amounts of the same commodity if the amounts are not equal or not simultaneous.
The key differences between the two are that riba al-nasiyah involves lenders/borrowers while riba al-fadl involves sellers/buyers, and riba al-nasiyah considers time while riba al-fadl can occur in a spot transaction. Both ultimately aim to curb unfair
This document provides an introduction to Shari'ah principles governing commercial transactions in Islamic law. It defines key concepts like 'aqd (contract), offer, acceptance, consideration, and subject matter. It outlines requirements for parties to a contract and how offer and acceptance work. It also categorizes different types of Islamic contracts and compares conventional and Islamic banking principles and products.
This document discusses the Islamic concept of Qard, which is an interest-free loan. It defines Qard as the transfer of ownership of fungible wealth to a borrower, who must return a similar amount. For a valid Qard contract, the lender and borrower must have legal capacity, and the subject of the loan must be fungible wealth. The loan can stipulate the place and time period of repayment. It is forbidden for the lender to demand any excess benefit from the borrower. While lending institutions can charge service fees equivalent to actual costs, they cannot charge amounts exceeding costs, and indirect expenses cannot be included.
The document defines and discusses the Islamic financing concept of al-ijarah. Some key points:
- Al-ijarah refers to a lease or rental contract in which one party allows another to use an asset for a fee. It is distinguished from a normal sale by having a specified time period.
- The pillars of al-ijarah include the owner (mu'ajjir), user (musta'jir), asset (ma'jur), benefit/usufruct (manfaah), fee (ujrah), and offer/acceptance (sighah).
- A major modern application is al-ijarah thumma al-bay', where a lease
1. Murabaha is an Islamic financing technique where a financier purchases an asset for a customer and sells it to them at an agreed upon higher price, incorporating a disclosed profit amount.
2. It involves the customer first requesting the purchase from the financier. The financier then appoints the customer as an agent to identify and procure the asset. Once purchased, ownership is transferred to the financier before being sold to the customer.
3. The transaction involves two separate contracts - one where the customer acts as the financier's agent in purchasing the asset, and another where the customer acts as buyer and the financier as seller, with ownership transferring upon sale. This ensures risks are properly assumed under
1) Islamic banks obtain funds from deposits and use those funds to finance various approved investment activities like trade financing. More than 75% of funds come from deposits.
2) Financing must follow Shariah principles like prohibiting interest and uncertainty and balancing individual and societal needs.
3) The bank uses modes like murabahah, ijarah, mudharabah and musharakah with different structures for purchasing, leasing or jointly investing in assets and sharing profits and losses according to capital contributions.
1) Mudarabah is a partnership agreement where one party provides capital while the other provides labor and management skills, with profits shared between the parties according to a predetermined ratio.
2) In mudarabah, the capital provider is called rabb-ul-maal and the manager is called the mudarib. The mudarib manages the business while the rabb-ul-maal does not interfere.
3) Mudarabah can be used by Islamic banks for investment purposes and financing projects, businesses, and private equity through profit-sharing with entrepreneurs. Deposits from customers to banks are treated as rabb-ul-maal funds to be invested by the bank as mudarib.
1) This document discusses the Islamic finance contracts of Salam and Istisna'a, which are forward sales agreements. Salam involves payment in advance for goods to be delivered later, while Istisna'a is an agreement with a manufacturer to produce specified goods.
2) The key aspects of Salam contracts discussed include the requirements for specifying price, commodity, delivery date/location. Istisna'a similarly requires specifying the manufactured item. Parallel Salam and securitization of Salam contracts are also mentioned.
3) The objectives, features, and risks of Salam and Istisna'a contracts are analyzed, and their differences from Murabaha contracts are highlighted
A Musharakah contract is an agreement where two or more parties contribute capital to establish a new project or share in an existing project. There are different types of partnerships (shirkah) including shirkat-ul-milk for joint property ownership and shirkat-ul-aqd for commercial partnerships. Shirkat-ul-aqd can be based on capital contributions (shirkat-ul-amwal), work/skills (shirkat-ul-aamal), or reputation (shirkat-ul-wujooh). The rules of Musharakah require capital contributions to be clearly defined, profits and losses to be shared based on capital ratios, and termination procedures in cases such as
The document discusses the concept of ijarah in Islamic finance, which refers to a leasing contract where an asset is leased to a client in exchange for rental payments over a period of time. It provides details on the different types of ijarah contracts, including operating ijarah and ijarah muntahia bit tamleek, and explains the accounting treatment for ijarah transactions according to the Financial Accounting Standard No. 8.
There are several types of sukuk discussed in the document. Istisna'a sukuk involve project financing where funds are advanced for supplies/labor and repaid from project revenues. Salam sukuk involve the purchase of commodities on a deferred delivery basis, with full payment up front. Ijarah sukuk involve the purchase of tangible assets by an SPV from an originator which are then leased back, with rental payments funding returns to sukuk holders. Mudharabah and musharakah sukuk also exist but are not described in detail. Each structure aims to comply with Shariah principles while providing financing.
This document discusses key concepts in Islamic contract law:
1. It defines a contract as an agreement between two or more parties through offer and acceptance regarding a subject matter, with mutual consent called an Aqd.
2. It outlines important terminologies - undertaking, unilateral promise, and bi-lateral promise - and distinguishes between promises and contracts.
3. It explains the basic elements of a valid Islamic contract, including specified parties and subject matter, offer and acceptance, and transfer of ownership.
The document provides an introduction and overview of several Islamic financial concepts:
- Takaful is an Islamic insurance concept based on mutual assistance and guarantee, where participants contribute to a common fund to provide mutual indemnity in case of loss.
- Sukuk are Sharia-compliant bonds where ownership of underlying assets is transferred to investors rather than fixed interest payments.
- Salam allows advance payment for goods to be delivered later, with specified quality, measure, weight and delivery time.
- Gharar refers broadly to deception and uncertainty that may lead to destruction or loss.
- Ijarah is a leasing agreement where a lessor leases an asset to a lessee in exchange for
Ijarah is an Islamic lease agreement where one party (the lessor) leases an asset to another party (the lessee) in exchange for a rental payment. There are basic principles that govern ijarah, including pillars like offer and acceptance between the two parties, a specified rental payment, and a clearly defined leased asset. Ijarah agreements must also comply with Sharia rules regarding timely payment of wages, responsibilities of parties, and termination conditions. Key issues in structuring ijarah include ensuring rental payments are not interest-based and addressing insurance, maintenance, ownership registration, and compliance oversight by a Sharia board.
Ijara or leasing is an Islamic financing contract where the financier buys an asset and leases it to a business owner for a rental fee. There are several types of ijara contracts: basic ijara for leasing services or assets; ijara muntahia bittamleek which allows the lessee to purchase the asset; and al-ijarah wa al-iqtina which is a lease-to-own agreement commonly used for home financing. The ijara contract must meet conditions such as clearly specifying the purpose and responsibilities of both parties, and cannot involve uncertainty around prices, interest, or penalties.
Ijarah is an Islamic financing method where a lessor leases an asset to a lessee for an agreed upon rental payment. There are three key points:
1) Ijarah allows the use of an asset but ownership remains with the lessor, who bears risks related to ownership. The lessee bears risks related to use of the asset.
2) Rental payments and sale of the asset must be structured separately to avoid making the lease contingent on sale.
3) Rules governing ijarah require the asset to be identified and the lease period determined. Rent can be set ahead of time but not increased unilaterally. The lessee bears costs of use while the lessor
1. The document describes an Ar Rahnu facility provided by RHB Islamic Bank, where a customer can obtain a loan by pledging gold jewelry as collateral.
2. Under the agreement, the bank provides the loan to the customer based on a Qardh Hassan contract and keeps the jewelry in safe custody as collateral (Rahn) based on Wadiah Yad Amanah, charging the customer a safekeeping fee.
3. If the customer repays the full loan amount and fees by the maturity date, the bank returns the jewelry, but if the customer defaults, the bank has the right to auction the jewelry to recover the loan.
Here are the steps to setup the Musharakah company for Case 1:
1. Partner A and Partner B form a Musharakah company on Jan 1 with a capital contribution of Rs. 10 million and Rs. 5 million respectively.
2. The company operates throughout the year and earns a profit of Rs. 3 million by Dec 31.
3. As per the agreed ratio, the profit of Rs. 3 million is distributed between Partner A and Partner B in the ratio of their capital contribution i.e. Partner A receives Rs. 2 million (10/15 of Rs. 3 million) and Partner B receives Rs. 1 million (5/15 of Rs. 3 million).
4.
Islamic banking adheres to Shariah law, which prohibits interest and investing in businesses involving activities like gambling, alcohol, or pork. It utilizes profit and loss sharing models like murabaha, where the bank purchases an asset and sells it to a customer at a markup, and salam, where payment is made in advance for future delivery of a commodity. Salam contracts help farmers obtain financing but both parties face price risk until delivery is made. Islamic banks sometimes use parallel salam contracts to hedge their own price risk from the initial salam.
The document provides an overview of Islamic banking products and their operational mechanisms. It discusses various Islamic financial contracts/modes such as Murabaha, Istisna, Salam, Ijarah, Musharakah, and Mudarabah. For each mode, it describes the concept, provides an example, and explains the basis of its Shariah permissibility. It also discusses key differences between Islamic and conventional banking and common misconceptions about Islamic banking.
Introduction to islamic banking by rehan nisarRehan Nisar
The document provides an introduction to Islamic banking, explaining why it exists, what it is, and how it differs from conventional banking. It states that Islamic banking operates according to Sharia principles of equal distribution of wealth and social justice. It then defines Islamic banking as banking compliant with Sharia law and defines some of its key features, including profit and loss sharing and asset-based financing. The document proceeds to contrast Islamic and conventional banking and outlines some common Islamic banking services like partnership, trade, and rental-based financing structures.
There are two types of riba (interest) prohibited in Islam:
1) Riba al-nasiyah (interest on loans) which refers to any predetermined increase on a loan based on time.
2) Riba al-fadl (interest in exchange) which occurs when exchanging amounts of the same commodity if the amounts are not equal or not simultaneous.
The key differences between the two are that riba al-nasiyah involves lenders/borrowers while riba al-fadl involves sellers/buyers, and riba al-nasiyah considers time while riba al-fadl can occur in a spot transaction. Both ultimately aim to curb unfair
This document provides an introduction to Shari'ah principles governing commercial transactions in Islamic law. It defines key concepts like 'aqd (contract), offer, acceptance, consideration, and subject matter. It outlines requirements for parties to a contract and how offer and acceptance work. It also categorizes different types of Islamic contracts and compares conventional and Islamic banking principles and products.
1. The document discusses Shariah guidelines for issuing Sukuk (Islamic financial certificates). Sukuk represent proportionate ownership of tangible assets, usufructs, services, or assets/investments of a project.
2. There are different types of Sukuk including those representing ownership of tangible assets, usufructs/services, and equity in a business/investment. Others represent receivables or future goods.
3. The main parties to Sukuk are the issuer and subscribers. A special purpose vehicle (SPV) represents subscribers. The relationship between issuer and subscriber is governed by the underlying contract.
The document provides information about an upcoming Islamic finance seminar, including details about the date, venue, theme, and keynote speaker. The keynote speaker will discuss Sharia compliant investment opportunities and provide an introduction to Islamic finance principles. Some of the main topics that will be covered include prohibitions of riba (interest), gharar (uncertainty), maisir (gambling), and non-halal products/services. Various types of Sharia compliant investment funds will also be described, such as Ijarah funds, commodity funds, and equity funds.
Concept Of Riba in Islamic Muamalah Maliyahabdou hamadah
This document discusses the concepts of interest, usury, and riba in Islam. It begins by defining riba as an increase or addition, specifically referring to premiums paid on loans in addition to the principal. It outlines the prohibition of riba in the Quran and hadith. It describes the main types and classifications of riba as riba al-nasi'ah (interest on loans), riba al-fadl (excess in exchange), riba al-qard (profit on loans), and riba al-yad (delayed exchange). It also discusses the differences between riba/interest and legitimate profit in trade, noting that money has no intrinsic utility unlike commodities.
The document provides information about Islamic treasury operations. It discusses how Islamic banks manage liquidity through various Shariah compliant contracts like Mudarabah, Musharakah, and Murabaha. It also explains how Islamic banks engage in hedging, use of derivatives like forwards and options (urbone), and swaps to manage risks. Some challenges for Islamic banking mentioned are liquidity issues due to a small market, lack of standardized terminology, additional documentation requirements, and lower public awareness compared to conventional banks.
This document provides definitions for key terms used in Islamic banking and finance. Some of the main concepts explained include prohibitions on riba (interest), gharar (uncertainty), and maysir (gambling). Permissible financing structures discussed include murabaha (cost-plus financing), ijara (leasing), mudaraba (profit-sharing), musharaka (equity partnership), and sukuk (asset-backed securities). Other terms defined relate to currency, jurisprudence, pilgrimage, and alternative risk-sharing mechanisms like takaful (Islamic insurance).
This document provides definitions for key terms used in Islamic banking and finance. Some of the main concepts explained include prohibitions on riba (interest), gharar (uncertainty), and maysir (gambling). Permissible financing structures discussed include murabaha (cost-plus financing), ijara (leasing), mudaraba (profit-sharing), musharaka (equity partnership), and sukuk (asset-backed securities). Other terms defined are bai (sale), hawala (bill of exchange), shariah (Islamic law), and takaful (Islamic insurance).
This document provides an overview of key Islamic finance concepts including Musharakah, Mudarabah, Murabahah, and Ijarah. It defines Musharakah as a partnership contract between partners on both capital and profit. It can include partnerships of ownership or contracts. Mudarabah is a partnership where one partner provides capital and the other provides labor/management. Key differences between Musharakah and Mudarabah are outlined. Murabahah is a sale with a specified profit markup agreed upon by both parties. Ijarah refers to hiring or leasing, where the benefits of an asset are transferred for rent.
The document discusses Islamic banking, its products and services, and how it differs from conventional banking. Islamic banking adheres to Sharia law which prohibits interest and gambling. Its main products include deposit accounts, investment accounts based on profit/loss sharing, and financing through leasing or partnership models. Investments in Islamic banks are not guaranteed and based on shared risk. Oversight of Islamic scholars ensures operations comply with Sharia. The relationship with customers is a partnership rather than debtor-creditor.
This is another Darul Fiqh presentation which expounds on the contemporary issues and laws relating to Zakat.
A very user friendly guide with a lot of complicated issues easily explained for all to benefit.
Banking plays an important role in modern economies by facilitating investment opportunities for individuals and businesses. Islamic finance provides alternatives to conventional banking that are compliant with Shariah principles such as prohibitions on riba (interest) and gharar (excessive uncertainty). Some of the main Islamic finance contracts and instruments discussed include mudaraba, musharaka, murabaha, ijara, sukuk, and istisna/salam which are based on principles of profit/loss sharing and asset-backed transactions.
The document discusses the Shariah Compliance Framework established by the State Bank of Pakistan for Islamic banking. It provides an overview of key aspects of the framework, including the roles and responsibilities of Shariah boards, qualifications for their members, and guidelines for Shariah inspection and auditing of Islamic banks. Various Islamic financing modes are also defined, such as Murabaha, Ijara, Istisna, Salam, Mudaraba, and Musharaka. Additional information is provided on Takaful insurance and Islamic agricultural finance guidelines.
Islamic bonds, also known as sukuk, are financial certificates that comply with Islamic law and avoid interest. They represent partial ownership in an asset or business venture and generate returns through profit/rent sharing rather than interest. Common types of sukuk include murabaha, which involves the bank purchasing an asset and reselling it to the buyer at a profit; musharaka, which is a profit-sharing partnership between bank and company; and ijara, which is asset leasing. The global market for sharia-compliant assets, including sukuk, has grown significantly in recent decades and now totals over $822 billion.
Islamic financing is based on Islamic principles that prohibit interest and speculative behavior, and emphasize risk sharing and sanctity of contracts. It differs from conventional financing in that financing must be backed by real assets and involve sharing of profits and losses between partners. Common Islamic financing instruments include musharakah, mudarabah, murabahah, ijara, salam and istisna. Musharakah and mudarabah are partnership models where multiple or sole partners invest capital for a shared or compensated stake in profits and losses.
EXTERNAL RECONSTRUCTION, MERGERS, AMALGMAATIONS AND ACQUISTIONSPOLYTECHNIC MELAKA
This document discusses accounting for business combinations including mergers, acquisitions, and takeovers. It provides details on converting sole proprietorships and partnerships into companies, including forming a new company that acquires the assets and liabilities of the old business. Accounting entries are presented for closing the books of the seller and opening the books of the new purchasing company. Key steps include recording the purchase price, assets and liabilities transferred, goodwill/premium, and settling the purchase consideration.
The document defines ijarah as a contract to give exclusive possession of physical properties or to render services to a person in return for some rental or wages for a specified period. It has two contracting parties - the owner/service provider (lessor) and the party receiving benefits/services (lessee). There must be a formal offer and acceptance (sighah) between the parties, and the benefit/service provided must be of value and permissible to both parties. Rental/wages paid cannot involve elements of usury and must be agreed upon by both parties.
The document defines ijarah as a contract to give exclusive possession of physical properties or to render services to a person in return for some rental or wages for a specified period. Ijarah has two contracting parties, the owner/lessor and lessee. There must be a formal offer and acceptance between the parties. The benefit or service provided must be permissible and known to both parties. Rental or wages must be agreed upon and free from usury.
The document defines ijarah as a contract to give exclusive possession of physical properties or to render services to a person in return for some rental or wages for a specified period. It has two contracting parties - the owner/service provider (lessor) and the party receiving benefits/services (lessee). There must be a formal offer and acceptance (sighah) between the parties, and the benefit/service provided must be of value and permissible to both parties. Rental/wages and the payment period must also be clearly agreed upon without elements of usury.
Ijarah is a contract to give exclusive possession of physical properties or to render services to a person in return for some rental or wages for a specified period. It has two contracting parties - the owner/service provider (lessor) and the party who benefits from the asset/service (lessee). Sighah is the formal agreement between the parties indicating their willingness to enter into the contract.
The document discusses the pillars of ijarah which are rental/wages, benefit/service, and two contracting parties. It also explains the requirements of the two contracting parties and the formal agreement or sighah in an ijarah contract.
Walmart Business+ and Spark Good for Nonprofits.pdfTechSoup
"Learn about all the ways Walmart supports nonprofit organizations.
You will hear from Liz Willett, the Head of Nonprofits, and hear about what Walmart is doing to help nonprofits, including Walmart Business and Spark Good. Walmart Business+ is a new offer for nonprofits that offers discounts and also streamlines nonprofits order and expense tracking, saving time and money.
The webinar may also give some examples on how nonprofits can best leverage Walmart Business+.
The event will cover the following::
Walmart Business + (https://business.walmart.com/plus) is a new shopping experience for nonprofits, schools, and local business customers that connects an exclusive online shopping experience to stores. Benefits include free delivery and shipping, a 'Spend Analytics” feature, special discounts, deals and tax-exempt shopping.
Special TechSoup offer for a free 180 days membership, and up to $150 in discounts on eligible orders.
Spark Good (walmart.com/sparkgood) is a charitable platform that enables nonprofits to receive donations directly from customers and associates.
Answers about how you can do more with Walmart!"
Executive Directors Chat Leveraging AI for Diversity, Equity, and InclusionTechSoup
Let’s explore the intersection of technology and equity in the final session of our DEI series. Discover how AI tools, like ChatGPT, can be used to support and enhance your nonprofit's DEI initiatives. Participants will gain insights into practical AI applications and get tips for leveraging technology to advance their DEI goals.
A workshop hosted by the South African Journal of Science aimed at postgraduate students and early career researchers with little or no experience in writing and publishing journal articles.
How to Manage Your Lost Opportunities in Odoo 17 CRMCeline George
Odoo 17 CRM allows us to track why we lose sales opportunities with "Lost Reasons." This helps analyze our sales process and identify areas for improvement. Here's how to configure lost reasons in Odoo 17 CRM
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...PECB
Denis is a dynamic and results-driven Chief Information Officer (CIO) with a distinguished career spanning information systems analysis and technical project management. With a proven track record of spearheading the design and delivery of cutting-edge Information Management solutions, he has consistently elevated business operations, streamlined reporting functions, and maximized process efficiency.
Certified as an ISO/IEC 27001: Information Security Management Systems (ISMS) Lead Implementer, Data Protection Officer, and Cyber Risks Analyst, Denis brings a heightened focus on data security, privacy, and cyber resilience to every endeavor.
His expertise extends across a diverse spectrum of reporting, database, and web development applications, underpinned by an exceptional grasp of data storage and virtualization technologies. His proficiency in application testing, database administration, and data cleansing ensures seamless execution of complex projects.
What sets Denis apart is his comprehensive understanding of Business and Systems Analysis technologies, honed through involvement in all phases of the Software Development Lifecycle (SDLC). From meticulous requirements gathering to precise analysis, innovative design, rigorous development, thorough testing, and successful implementation, he has consistently delivered exceptional results.
Throughout his career, he has taken on multifaceted roles, from leading technical project management teams to owning solutions that drive operational excellence. His conscientious and proactive approach is unwavering, whether he is working independently or collaboratively within a team. His ability to connect with colleagues on a personal level underscores his commitment to fostering a harmonious and productive workplace environment.
Date: May 29, 2024
Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
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This presentation includes basic of PCOS their pathology and treatment and also Ayurveda correlation of PCOS and Ayurvedic line of treatment mentioned in classics.
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This presentation was provided by Steph Pollock of The American Psychological Association’s Journals Program, and Damita Snow, of The American Society of Civil Engineers (ASCE), for the initial session of NISO's 2024 Training Series "DEIA in the Scholarly Landscape." Session One: 'Setting Expectations: a DEIA Primer,' was held June 6, 2024.
Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...
Islamic perspective note
1.
2. DEFINITION
Comes from Arabic word ‘al-ajr’ which means wages or
rewards for a perticular work done. Ijarah also means
employment of person through the payment of wages for the
work done. Al-ijarah is therefore a contract to give exclusive
possession of physical properties or to render services to a
person in return for some rental or wages for a specified
period.
4. TWO CONTRACTING
PARTIES
There are two contracting parties namely the
owner of the leased asset or service provider
(lessor) and the party who reaps the benefits or
services of the leased asset (lessee). Parties
involved in a contract must be mature and rational.
A contract is not valid when it involves children and
persons of unsound mind.
5. SIGHAH
Sighah is the formal exchange between the
contractual parties indicating their willingness to
enter into the agreement. It consists of an offer
on the part of one contractual party and an
acceptance by the other party, either of which
must be clearly understood. Agreement and
supply must be parallel, meaning all terms in
agreement must be adhered to. There is no time
gap between supply and agreement and it is
unconditional.
6. BENEFIT/SERVIC
ES
Service must be of value. The owner or service provider must
be able to provide an asset or a service that is of benefit to
the hirer. Take for example houses that are to be leased. The
owner cannot lease a house which is in a dilapidated or poor
condition to the tenants. However, there are limitations to the
types of benefit or services that can be offered. For example,
one cannot hire another to perform hajj on one’s behalf to
achieve pilgrimage. The benefit or service provided must be
permissible, agreeable and known by both parties from all
aspects.
7. RENTAL/WAG
The payment must be free from any elements of usury and the
amount and payment period must be agreeable and known by both
parties.
9. DEFINITION
Waqf means ‘to stop’, ‘contain’ or ‘to preserve’.
The meaning here is to prevent the buying and
selling, gifting or inheritance of a tangible asset or
property. As such, the asset or property remains in
perpetuity until the end of time for the benefit of
Islam as a whole or for a specified group who have
been pre-determined.
10. T
Y
P
E
S
SPECIAL WAQAF
• Refer to the individual (wakif) or group who give
money or property for a specific purpose.
• Example, Amirul give money to built mosque, for
religious purposes.
GENERAL WAQAF
• Refer to an individual (wakif) or group which give
money or property for Islamic welfare purposes
without any specific objective.
• Example, Firdaus give money to buy a rock chair at
the playground near his house. So, all the people
can sit at the chair when they go to that
playground.
11. CONDITIONS
WAKIF
( founder )
MAUQUF
( beneficiaries )
PROPERTY
( object )
AKAD
(confession of waqaf)
Must a sound of mind and
mature, can handling
financial and not bankruptcy.
The founder’s family, poor,
travelers and public.
The object must be legal in
law and wakif can control it.
In writing and announced.
12. CONTRACT VOID
1. The object destroyed or missing.
2. The contract was announced void by the Islamic
association or law.
3. The founder (wakif) announced to void the contract.
14. ASSETS
Unless acquired wiht the clear intention to
resell
For example: A person buys a house which
is normally exempt from Zakat, with the
intention of reselling the house at a profit,
then the market value of the property,
calculated as at the end of the relevant
Zakat year, will be subject to Zakat.
Equipment of all classes, books of value,
time share unit.
15. LAIBILITY
Liabilities, for Zakat purposes, may be
divided into two categories:
Liabilities incurred in acquiring assets
which are exempt from Zakat.
For example, mortgage on immovable
property.
Liabilities incurred in acquiring assets
which are subject to Zakat.
For example, trade creditors (suppliers
of business merchandise inventory),
and bank overdraft.
17. ASSETS
Unless acquired wiht the clear intention to
resell
For example: A person buys a house which
is normally exempt from Zakat, with the
intention of reselling the house at a profit,
then the market value of the property,
calculated as at the end of the relevant
Zakat year, will be subject to Zakat.
Equipment of all classes, books of value,
time share unit.
18. LAIBILITY
Liabilities, for Zakat purposes, may be
divided into two categories:
Liabilities incurred in acquiring assets
which are exempt from Zakat.
For example, mortgage on immovable
property.
Liabilities incurred in acquiring assets
which are subject to Zakat.
For example, trade creditors (suppliers
of business merchandise inventory),
and bank overdraft.
20. In Arabic treasury known as the treasure house.
It is also known as the national treasury
A financial institution that serves to provide the
necessary public property or place of storage of
all valuables.
It also serves as an investment property on
Muslims to establish Islamic banks active and
dedicated.
21. Eradicate poverty
Distributing alms to the qualified and entitled to
Fighting crime and social ills
Provide a variety of basic needs
Welfare of the community that need it
Roads, investment, social activities beneficial
Improve the livelihood of Muslims
Improve education
Provide scholarships or financial aid as those that need it.
Keep the endowed property
The role of taking care of all the country's wealth
22. Baitulmal
Various storage properties
Islamic countries
2 type :
1. Special property
Charity
Zakat fitrah
2. General property
Fai
Ghaimah
ma'adin
Extractive
People around the country
hgyu
It is only subject to the property as
zakat zakat of gold, silver,
agriculture, pertenakan, minerals,
business and income and zakat fitrah
Mustahiq or recipients of zakat
1. amil
2. poor
3. converts
4. Riqab
5. gharimim
6. isabillah
7. ibn sabeel
Pusat Zakat
24. DEFINITION OF BBA
Sale of goods on a deferred payment basic at a
price, which includes a profit margin agreed by
both parties.
Payment period is the agreement between the two
parties.
Payment can be paid by cash or by installment.
Interest payment can be avoided as the customer
is paying the sale price which is that same as
interest charged on a loan.
26. 1.
• Literally this means a sale on mutually agreed
profit.
• It is a contract of sale in which the seller declares
his cost and the profit.
2.
• Murabaha has been adopted by Islamic banks as a
mode of financing.
• As a financing techique, it can involve a request by
the client to the bank to purchase a certaine item
for him.
3.
• As a financing techique, it can involve a request by
the client to the bank to purchase a certaine item
for him.
27.
28. ZAKAT
BASE
The net adjusted
amount of zakat
assets and
liabilities used
for or derived
from business
activities.
An entity is advised
to refer to the
relevant zakat
authorities for
further
An entity may
apply one of the
following method
by JAKIM 2011.
Two methods:
Adjusted
working capital
method.
Adjusted
growth method.
30. • Current capital =
Owner’s Equity + Debt
Financial Capital + Profit
– Fixed Asset – Other Non
Current Assets
Urfiiyah
Method
• Net Current Asset =
Current Asset (full
ownership) – Current
Operating Liability only
Syar’iiyah
Method
34. INTRODUCTION
Rabb-Ul-Maal gives money
to another for investing.
Investment come from the
first partner (Rabb-Ul-Maal)
Management and work is
responsibility of the other
partner ( Mudarib)
38. Can be terminated
by two parties
Hanafi and
Hanbali jurist
Shafe’I and Maliki
jurist
TERMINATION OF
MUDARABAH
39. ZAKAT
DISTRIBUTION
ZAKAT FITRAH:
OBLIGATORY ON EVERY
PERSON IS 2.3KG OF THE
STAPLE FOOD OF THE
TERRITORY IN WHICH THE
PERSON
ZAKAT BUSINESS:
((CURRENT ASSET-CURRENT
LIABILITY) +/- CORDINATION x
% OF MUSLIM SHARE x ZAKAT
ABILITY (2.5%))
ZAKAT OF SHARE:
2.5% THE VALUE OF LOWEST
SHARE-SHARE WHICH IS
OWN FOR ONE YEAR MINUS
FOR SHARED BORROWED
40. ZAKAT DISTRIBUTION
ZAKAT HARTA:
ZAKAT RATE IS 2.5% OF TOTAL
ASSETS/
ZAKAT EPF:
-2.5% ON CONTRIBUTION THAT
ISSUED ONCE MONEY ISSUED.
-2.5% ON CONTRIBUTION EVERY
EMPLOYEE IS BASED ON ANNUAL
STATEMENT
ZAKAT OF SAVING:
CONTRIBUTION OF WORKERS
AND EMPLOYER'S TO KWSP
PEOPLE PROVIDENT
FUND,SOLDIERS PROVIDENT
FUND(LTAT) ARE REQUIRED TO
PAY ZAKAT
41. ZAKAT DISTRIBUTION
ZAKAT OF LIVESTOCK:
PROPERTY ZAKAT THAT
COMPUSORY TO BE TAKEN OUT
WHEN PERFECT THE CONDITION.
ZAKAT OF GOLD:
-NISAB ZAKAT GOLD USED = 200g
-GOLD ZAKAT NISAB UNUSED =
85g
ZAKAT ON CROPS:
BASIC FOOD WHICH HAS
REACHED THE STAGE OF
SATISFACTION FOR THE STATE
WHICH HAS 363 GATANG/1300g
LIKE PADDY,WHEAT,CEREAL AND
SO ON
42. Grand of property that occurs
during the life of a hibah provider .
HIBAH
43.
44. Donation and Hibah are both
a form of generosity owned .
Donation and Hibah is giving
freely without expecting
giving back .
45.
46. DONATION HIBAH
Giving something that
is based on concern for
the poor and needy .
Based on the
provision of natural of
love .
Grants are usually in
the form of money .
This gift is usually in
the form of goods.
Donation legal is
Sunnah Muakkad .
Hibah legal is Sunnah
.
47. DEFINITION OF MURABAH
- An acceptable form of credit sale
under Sharia
( Islamic religious law ).
- At a price which includes a profit
margin agreed by both seller
and buyer
48. THE CONDITION
Buying and selling price,other costs
and the profit margin must be
clearly stated during the sale
agreement.
49. According to the islamic belief zakat
purifies wealth and soul.
Zakat is a payment or tax of property and
give to who reserve.
50. ZAKAT FITRAH
Acts as a purification for fasting people from
their sins and also to be made as resources to
serve the need of the asnaf during 1 syawal.
ZAKAT ON PROPERTY
Posted by those who have some property
with the rate set to islam.
51. Islam
Independent
Perfect possession
Reaching nisab
Reaching haul
Intention to trade