ISRA is a new research academy established to address gaps in Islamic finance research. It focuses on both fundamental and applied research to help resolve short-term industry issues and propel long-term orderly development. ISRA aims to identify pressing market issues, conduct in-depth research collaborating with academics and industry experts, and provide findings to assist Shariah scholars and market players. In the long run, ISRA also aims to develop a research portal and help harmonize varying Shariah interpretations within parameters set by research.
Jon has worked in fund analysis for over 10 years, starting as a temp at Scottish Widows. He now works as a Fund Monitoring Manager at Scottish Widows, tracking performance metrics for over 1,000 funds. A typical day involves ensuring the monitoring platform balances funds properly through diversification. Jon finds solving complex problems and root cause analysis most rewarding. His long term goal is to run his own multi-manager fund or consultancy.
Mani started Future Focus Infotech in 1997 providing IT and managed HR services. Despite initial successes, it took 10 years for the venture to become sustainable. Pavan and Rakesh Thatha founded ArrayShield in 2010 to develop a two-factor authentication product addressing identity theft issues. Their simple idea grew into a product solving real-world hacking problems. Saloni Malhotra founded rural BPO DesiCrew in 2007 after realizing the potential of rural employment. She established centers in three Tamil Nadu locations and one in Karnataka to provide local employment.
The Business Model Design of Social EnterpriseLuke Kao
A social enterprise is an organization whose aim is to find the balance between
earning profits for shareholders and creating positive impacts in society. In the
following thesis, I shall share the building blocks needed for a business model directing
towards building a social enterprise, and draw comparison to those of for-profit
enterprises. Osterwalder and Pigneur proposed nine building blocks as a universal
business model (Business Model Generation 2010). My research considers this
proposed model while also considering three additional building blocks that specifically
pertaining to social enterprise: “social and environment revenue,” “social and
environment costs,” and “the social entrepreneur.” My research uses the information
collected from three social enterprise case studies, considering the social entrepreneurs
themselves, in addition to information concerning their company documents. My result
validates the theoretical foundation and practicality for these three additional building
blocks for developing social enterprises and for supplementing additional important
considerations while starting a social enterprise.
The document discusses the history and evolution of performance appraisal systems from their origins in the early 20th century to modern approaches. It provides an overview of key purposes of performance appraisal from both employee and organizational perspectives, including evaluation, feedback, improvement, and rewarding performance. The document also examines ongoing controversies around performance appraisal and debates around linking appraisal results to rewards. Finally, it outlines some common appraisal methods used, such as essay appraisals, graphic rating scales, field reviews, and forced-choice ratings.
Assoc. Prof. Dr. Asyraf Wajdi Dusuki Head, Research Affairs International Shari’ahResearch Academy for Islamic Finance (ISRA) INCEIF CLASS FN 6013 ISLAMIC FINANCE TOPIC 3
2. Application of Hybrid Instruments in Islamic Finance 6 Shariah Parameters in Combination of Contracts 5 Concept of Wa ’a d 3 Application of Wa’ad 4 Hybrid Instruments 7 Issues Distinction between Wa’ad, Wa’daan & 2 Muwaadah Workshop on Islamic Banking Operation 8 Conclusion
Maqasid al shariah in islamic finance an overviewMARA
This document provides an overview of Maqasid al-Shari'ah (objectives of Shariah) and its role in Islamic finance. It discusses that Maqasid al-Shari'ah aims to protect public interest and ensure the well-being of society by promoting justice, righteousness and beneficial conduct. The objectives of Shariah are classified into essentials (protection of religion, life, intellect, lineage and wealth), needs and embellishments. Realizing Maqasid al-Shari'ah is important for the development of Islamic banking, capital markets and takaful in accordance with noble principles and vision of Islam to serve the interests of all humanity.
Objectives, Philosophy and Principles of Islamic BankingIzzuddin Norrahman
Objectives, Philosophy and Principles of Islamic Banking by Sudin Haron, W. Nursofiza, (2009). Islamic Finance and Banking System : Philosophies, Principles & Practices. Selangor, Malaysia. McGraw-Hill (Malaysia) Sdn. Bhd.
The document discusses key concepts in Islamic business contracts and transactions. It defines riba (usury or interest) which is strictly prohibited in Islam. Riba occurs when there is unjustified excess in loans or commodity exchanges. The Quran revealed the prohibition of riba over four stages. Islamic business aims to avoid riba as well as gharar (uncertainty), maysir (gambling), and unethical goods. Permissible contracts include various sale, lease, partnership and charitable arrangements that comply with Islamic principles.
Jon has worked in fund analysis for over 10 years, starting as a temp at Scottish Widows. He now works as a Fund Monitoring Manager at Scottish Widows, tracking performance metrics for over 1,000 funds. A typical day involves ensuring the monitoring platform balances funds properly through diversification. Jon finds solving complex problems and root cause analysis most rewarding. His long term goal is to run his own multi-manager fund or consultancy.
Mani started Future Focus Infotech in 1997 providing IT and managed HR services. Despite initial successes, it took 10 years for the venture to become sustainable. Pavan and Rakesh Thatha founded ArrayShield in 2010 to develop a two-factor authentication product addressing identity theft issues. Their simple idea grew into a product solving real-world hacking problems. Saloni Malhotra founded rural BPO DesiCrew in 2007 after realizing the potential of rural employment. She established centers in three Tamil Nadu locations and one in Karnataka to provide local employment.
The Business Model Design of Social EnterpriseLuke Kao
A social enterprise is an organization whose aim is to find the balance between
earning profits for shareholders and creating positive impacts in society. In the
following thesis, I shall share the building blocks needed for a business model directing
towards building a social enterprise, and draw comparison to those of for-profit
enterprises. Osterwalder and Pigneur proposed nine building blocks as a universal
business model (Business Model Generation 2010). My research considers this
proposed model while also considering three additional building blocks that specifically
pertaining to social enterprise: “social and environment revenue,” “social and
environment costs,” and “the social entrepreneur.” My research uses the information
collected from three social enterprise case studies, considering the social entrepreneurs
themselves, in addition to information concerning their company documents. My result
validates the theoretical foundation and practicality for these three additional building
blocks for developing social enterprises and for supplementing additional important
considerations while starting a social enterprise.
The document discusses the history and evolution of performance appraisal systems from their origins in the early 20th century to modern approaches. It provides an overview of key purposes of performance appraisal from both employee and organizational perspectives, including evaluation, feedback, improvement, and rewarding performance. The document also examines ongoing controversies around performance appraisal and debates around linking appraisal results to rewards. Finally, it outlines some common appraisal methods used, such as essay appraisals, graphic rating scales, field reviews, and forced-choice ratings.
Assoc. Prof. Dr. Asyraf Wajdi Dusuki Head, Research Affairs International Shari’ahResearch Academy for Islamic Finance (ISRA) INCEIF CLASS FN 6013 ISLAMIC FINANCE TOPIC 3
2. Application of Hybrid Instruments in Islamic Finance 6 Shariah Parameters in Combination of Contracts 5 Concept of Wa ’a d 3 Application of Wa’ad 4 Hybrid Instruments 7 Issues Distinction between Wa’ad, Wa’daan & 2 Muwaadah Workshop on Islamic Banking Operation 8 Conclusion
Maqasid al shariah in islamic finance an overviewMARA
This document provides an overview of Maqasid al-Shari'ah (objectives of Shariah) and its role in Islamic finance. It discusses that Maqasid al-Shari'ah aims to protect public interest and ensure the well-being of society by promoting justice, righteousness and beneficial conduct. The objectives of Shariah are classified into essentials (protection of religion, life, intellect, lineage and wealth), needs and embellishments. Realizing Maqasid al-Shari'ah is important for the development of Islamic banking, capital markets and takaful in accordance with noble principles and vision of Islam to serve the interests of all humanity.
Objectives, Philosophy and Principles of Islamic BankingIzzuddin Norrahman
Objectives, Philosophy and Principles of Islamic Banking by Sudin Haron, W. Nursofiza, (2009). Islamic Finance and Banking System : Philosophies, Principles & Practices. Selangor, Malaysia. McGraw-Hill (Malaysia) Sdn. Bhd.
The document discusses key concepts in Islamic business contracts and transactions. It defines riba (usury or interest) which is strictly prohibited in Islam. Riba occurs when there is unjustified excess in loans or commodity exchanges. The Quran revealed the prohibition of riba over four stages. Islamic business aims to avoid riba as well as gharar (uncertainty), maysir (gambling), and unethical goods. Permissible contracts include various sale, lease, partnership and charitable arrangements that comply with Islamic principles.
Mohinish Sinha on Human Capital What 2020 holdsHay Group India
This document discusses the concept of a learning organization and how organizations can evolve to promote lifelong learning. It tells the story of a company that noticed some employees leaving their jobs to pursue different careers and interests, rather than just for higher pay. By investigating further, the company discovered a widespread desire among employees to try new things. In response, the company created a new career rotation policy that allowed employees to change roles periodically. This became a highly valued benefit among staff. The document argues that organizations should pay attention to outliers among current trends, encourage risk-taking and learning from failures. It also discusses the learning process individuals go through and how organizations can create an environment where everyone acts as a lifelong learner and helps the organization adapt continuously.
To get management approval for improvement ideas, one must make a concise pitch highlighting the benefits. Specifically, present facts on current problems and opportunities for improvement. Demonstrate how the ideas will increase effectiveness, efficiency, and cost savings. Quantify benefits like reduced waste or rework in terms of time and money. Consider wider impacts like improved morale. Prepare a slick presentation with backup materials and practice delivering it confidently.
The document discusses the structure and culture of Idlenot Dairy, a small dairy processing company. It analyzes the company's functional structure and departmentalization. The functional structure fits well with the company's stable, simple environment and integrated operations. However, there was low congruence between individual needs and the organization. Workers felt a lack of accomplishment and warehouse staff saw no results from their work. Recommendations could help address these issues and improve organizational fit.
This white paper discusses modern business practices that focus too heavily on short-term goals at the expense of long-term sustainability. It argues that excessive ambition, high staff turnover, and short-term thinking undermine cohesion and skill development within companies. The paper proposes that businesses should define a "core purpose" to guide long-term decision-making and ensure it aligns with developing human capital rather than only short-term metrics like quarterly earnings. Employees should be measured based on their support of the core purpose rather than just short-term deliverables. This could help businesses sustain capabilities over decades rather than seeing skills erode.
Finance & Capital Investment Analysis For Project Managers & Technical Profes...360 BSI
This in-depth and practical course will demystify finance and cover best practices in financial analysis.
Participants will be able to comprehend the content of financial statements, analyze and interpret financial information, understand the importance of cashflow, match their budgets to realistic targets, and accurately analyze capital investments.
Contact Kris at kris@360bsi.com for further details.
This document provides advice for someone who has been asked to head up an employee involvement initiative at their company. It recommends that they first understand the current situation by identifying any demotivators that are preventing employees from doing good work. Their goal should be to create an environment where employees find their own motivation. Finally, it notes that changing a company's culture and empowering employees will require selling the idea to managers who may be resistant to giving up control.
This document discusses how to successfully implement design work within organizations. It begins by describing how design work often gets repeatedly revised during implementation due to various stakeholders providing feedback. It then argues that defining the organization's personality, examining its structure, and establishing clear processes can help design work survive implementation. The document uses spectra to define an organization's views on design, innovation, and customers. It also discusses experimenting with different structural approaches. Finally, it emphasizes establishing a clear problem definition and focusing on designing testable solutions. The overall message is that understanding an organization's context is crucial to ensuring good design work is successfully implemented.
One thing every CPA agrees on is that this time it’s different. The question on everyone’s mind is what is the new normal?
What are the major trends and issues you must be paying attention to?
Tom Hood will share his insights on the four mega-trends affecting the CPA profession – Globalization, Workforce/Demographics, Technology, and Regulations/Standards and what they mean to your firm. You will also learn how leadership has fundamentally changed and what you can do to get ahead of the next waves of change.
1
Running head: QUESTIONNAIRE
2
QUESTIONNAIRE
Nirali Makwana
Polk State College
Homework Assignment- 5
Dr. Paul Howe
February 9,2020
1. The term bureaucratic has a pejorative connotation to most people. Can you think of any positive aspects of a bureaucracy?
The positive aspect of bureaucracy makes it effective in organizing. Promoters for administration have positive perspectives progression on having in an association. They state that since there is a levels of leadership, there will be explicit jobs and undertakings for individuals associated with the offices. This way Supporters for administration have positive perspectives on having pecking order in an association. They state that since there is a level of leadership, there will be explicit jobs and assignments for individuals associated with the divisions.
2. Think of a crisis situation you are familiar with involving a group, team, organization, or country, and analyze it in terms of the leader–follower–situation framework. For example, were the followers looking for a certain kind of behavior from the leader? Did the situation demand it? Did the situation, in fact, contribute to a particular leader’s emergence?
In an organization a there was an introduction to a new management system where employees will be vetted on during their three month appraisal. None of the employees had gone through the performance improvement training they looked into their leader to initiate the conversation with the management in regards to creating awareness to the system .The team looked to the leader to speak up for them as this was one of his leadership quality and skills required.
3. Can you identify reward systems that affect the level of effort students are likely to put forth in team or group projects? Should these reward systems be different than those for individual effort projects?
A reward system that effect the level of effort group projects is ensuring that there is a price to be won, students perform effectively when they are aware of the rewards that come with the performance they deliver on their group project. This will promote team work among students pushing them to deliver their best work as well as the recognition that comes with winning.
Mini case
4. Discuss the three input components of the Congruence Model as they apply to the success of IKEA.
The Congruence Model recommends that so as to completely comprehend an association's presentation, you should initially comprehend the association as a framework that comprises of some fundamental components.
Environment all elements, including foundations, gatherings, people, occasions, and so forth. Outside of the limits of the association being examined, however potentially affecting that association. Then again, comprises of everything without exception that is happening outside of the association.
Resources: Anything the association can use to its advantage, including HR, innovation, capital, data, and so on. J ...
This document summarizes and critiques a management consulting project conducted at a chemical plant. The consulting firm conducted an employee opinion survey and evaluated managers. However, their methodology for evaluating managers was flawed and superficial. They interviewed each manager's only two direct supervisors but did not interview subordinates or peers. Their evaluations of managers differed from the supervisors' assessments and seemed based more on subjective impressions than facts. They recommended demoting or transferring most managers, despite the plant's success. The plant manager believed implementing the recommendations would cause an exodus of talented staff. He disagreed with the report's biases and lack of consideration for technical competence. The president agreed and did not implement the recommendations. Subsequent events confirmed this was the right decision.
Ravi Kumar founded DilSeBol, a company that customizes merchandise like t-shirts and mugs with designs provided by customers. He was motivated by similar successful ventures in the US and felt the concept could work in India as internet usage was growing. DilSeBol allows customers to upload designs and complete the ordering process online. Ravi hopes TiE Chennai can help creative entrepreneurs like him access potential investors and customers.
Pravin Shekar is a serial entrepreneur who starts new ventures every few years. What began as part-time work led to multiple market research companies. His current company, Krea, specializes in healthcare market research. As a TiE Chennai member, Pravin mentors
This document provides guidance on developing scenario plots for strategic planning. It discusses two approaches for identifying a small number of scenario logics or plots from the virtually infinite number of possible futures: the inductive approach and deductive approach. The inductive approach involves brainstorming emblematic events or deviations from an "official future" until consensus is reached. The deductive approach prioritizes the key factors of uncertainty and uses a 2x2 matrix based on the two most important uncertainties. Once the scenario logics are identified, the next step is to flesh them out into compelling narrative stories.
The document provides a lengthy discussion and analysis of leadership styles, theories, and concepts based on the author's professional experience and case studies. The author examines lessons from case studies on leadership challenges, different leadership theories and how they impacted a past organization, leadership styles and their effects, the power of emotional intelligence, the concept of self-monitoring and how it applies to the author's potential for leadership. The conclusion suggests strategies for the author to become a more effective leader, including applying concepts around communication, emotional intelligence, and self-awareness gained from the analysis.
The document discusses potential futures for work and management in 2018. It outlines a "probable future" scenario called "The World Continued" where:
- Business will be influenced by new players from emerging markets and require understanding diversity and foreign cultures.
- Business models and structures will diversify and become more open, employee-centric, and community-based.
- Tasks will focus more on skills like innovation, creativity, and social/political skills, while hard/technical skills remain important.
- Workforces will be more diverse, virtual, and fluid, requiring skills in areas like emotional intelligence, collaboration, and value orientation.
It provides recommendations for organizations to prepare, including building market knowledge
Neuroentrepreneurship symposium 2015 Academy of ManagementNorris Krueger
Joint research symposium applying insights from neuroscience to understanding entrepreneurship. Builds on the 2014 symposium which was SRO. This is a great crew so feel free to contact any of them
This document reflects on conversations with over 1200 executives and focuses on the dynamics of business, the work and life of executives, and the world of executive development as a profession. It discusses the challenges executives face in getting results and serving stakeholders while navigating changing business environments and finding work-life balance. The conclusion emphasizes that executive development is about performance improvement and facilitators should offer practical guidance and drop pretensions by hosting dialogues that build trust.
This document reflects on conversations with over 1200 executives and focuses on the dynamics of business, the work and life of executives, and the world of executive development as a profession. It discusses challenges executives face in getting results, serving stakeholders, finding answers, tapping into experience, and more. The conclusion is that executive development is about performance improvement and facilitators should offer practical guidance and drop pretensions by hosting dialogues focused on proven processes deployed by champion executives.
The People-Centered Model of Business (tm)nextbyramla
PC-MoB: See The Big Picture
The People-Centered Model of Business (PC-MoB) is a practical tool through which organizations (businesses and others) examine the reality of their markets by focusing on human activity. It has multiple application modules including: Market Insight, Trend-Forecasting, Entrepreneurship, Creativity, Organizational Leadership, and Social Business - amongst other applications that may be developed "wikinomically."
First published here:
http://triplebottomline.com.pk/response.asp?id=1&sub_id=7
A presentation of:
http://nextbyramla.com
Mohinish Sinha on Human Capital What 2020 holdsHay Group India
This document discusses the concept of a learning organization and how organizations can evolve to promote lifelong learning. It tells the story of a company that noticed some employees leaving their jobs to pursue different careers and interests, rather than just for higher pay. By investigating further, the company discovered a widespread desire among employees to try new things. In response, the company created a new career rotation policy that allowed employees to change roles periodically. This became a highly valued benefit among staff. The document argues that organizations should pay attention to outliers among current trends, encourage risk-taking and learning from failures. It also discusses the learning process individuals go through and how organizations can create an environment where everyone acts as a lifelong learner and helps the organization adapt continuously.
To get management approval for improvement ideas, one must make a concise pitch highlighting the benefits. Specifically, present facts on current problems and opportunities for improvement. Demonstrate how the ideas will increase effectiveness, efficiency, and cost savings. Quantify benefits like reduced waste or rework in terms of time and money. Consider wider impacts like improved morale. Prepare a slick presentation with backup materials and practice delivering it confidently.
The document discusses the structure and culture of Idlenot Dairy, a small dairy processing company. It analyzes the company's functional structure and departmentalization. The functional structure fits well with the company's stable, simple environment and integrated operations. However, there was low congruence between individual needs and the organization. Workers felt a lack of accomplishment and warehouse staff saw no results from their work. Recommendations could help address these issues and improve organizational fit.
This white paper discusses modern business practices that focus too heavily on short-term goals at the expense of long-term sustainability. It argues that excessive ambition, high staff turnover, and short-term thinking undermine cohesion and skill development within companies. The paper proposes that businesses should define a "core purpose" to guide long-term decision-making and ensure it aligns with developing human capital rather than only short-term metrics like quarterly earnings. Employees should be measured based on their support of the core purpose rather than just short-term deliverables. This could help businesses sustain capabilities over decades rather than seeing skills erode.
Finance & Capital Investment Analysis For Project Managers & Technical Profes...360 BSI
This in-depth and practical course will demystify finance and cover best practices in financial analysis.
Participants will be able to comprehend the content of financial statements, analyze and interpret financial information, understand the importance of cashflow, match their budgets to realistic targets, and accurately analyze capital investments.
Contact Kris at kris@360bsi.com for further details.
This document provides advice for someone who has been asked to head up an employee involvement initiative at their company. It recommends that they first understand the current situation by identifying any demotivators that are preventing employees from doing good work. Their goal should be to create an environment where employees find their own motivation. Finally, it notes that changing a company's culture and empowering employees will require selling the idea to managers who may be resistant to giving up control.
This document discusses how to successfully implement design work within organizations. It begins by describing how design work often gets repeatedly revised during implementation due to various stakeholders providing feedback. It then argues that defining the organization's personality, examining its structure, and establishing clear processes can help design work survive implementation. The document uses spectra to define an organization's views on design, innovation, and customers. It also discusses experimenting with different structural approaches. Finally, it emphasizes establishing a clear problem definition and focusing on designing testable solutions. The overall message is that understanding an organization's context is crucial to ensuring good design work is successfully implemented.
One thing every CPA agrees on is that this time it’s different. The question on everyone’s mind is what is the new normal?
What are the major trends and issues you must be paying attention to?
Tom Hood will share his insights on the four mega-trends affecting the CPA profession – Globalization, Workforce/Demographics, Technology, and Regulations/Standards and what they mean to your firm. You will also learn how leadership has fundamentally changed and what you can do to get ahead of the next waves of change.
1
Running head: QUESTIONNAIRE
2
QUESTIONNAIRE
Nirali Makwana
Polk State College
Homework Assignment- 5
Dr. Paul Howe
February 9,2020
1. The term bureaucratic has a pejorative connotation to most people. Can you think of any positive aspects of a bureaucracy?
The positive aspect of bureaucracy makes it effective in organizing. Promoters for administration have positive perspectives progression on having in an association. They state that since there is a levels of leadership, there will be explicit jobs and undertakings for individuals associated with the offices. This way Supporters for administration have positive perspectives on having pecking order in an association. They state that since there is a level of leadership, there will be explicit jobs and assignments for individuals associated with the divisions.
2. Think of a crisis situation you are familiar with involving a group, team, organization, or country, and analyze it in terms of the leader–follower–situation framework. For example, were the followers looking for a certain kind of behavior from the leader? Did the situation demand it? Did the situation, in fact, contribute to a particular leader’s emergence?
In an organization a there was an introduction to a new management system where employees will be vetted on during their three month appraisal. None of the employees had gone through the performance improvement training they looked into their leader to initiate the conversation with the management in regards to creating awareness to the system .The team looked to the leader to speak up for them as this was one of his leadership quality and skills required.
3. Can you identify reward systems that affect the level of effort students are likely to put forth in team or group projects? Should these reward systems be different than those for individual effort projects?
A reward system that effect the level of effort group projects is ensuring that there is a price to be won, students perform effectively when they are aware of the rewards that come with the performance they deliver on their group project. This will promote team work among students pushing them to deliver their best work as well as the recognition that comes with winning.
Mini case
4. Discuss the three input components of the Congruence Model as they apply to the success of IKEA.
The Congruence Model recommends that so as to completely comprehend an association's presentation, you should initially comprehend the association as a framework that comprises of some fundamental components.
Environment all elements, including foundations, gatherings, people, occasions, and so forth. Outside of the limits of the association being examined, however potentially affecting that association. Then again, comprises of everything without exception that is happening outside of the association.
Resources: Anything the association can use to its advantage, including HR, innovation, capital, data, and so on. J ...
This document summarizes and critiques a management consulting project conducted at a chemical plant. The consulting firm conducted an employee opinion survey and evaluated managers. However, their methodology for evaluating managers was flawed and superficial. They interviewed each manager's only two direct supervisors but did not interview subordinates or peers. Their evaluations of managers differed from the supervisors' assessments and seemed based more on subjective impressions than facts. They recommended demoting or transferring most managers, despite the plant's success. The plant manager believed implementing the recommendations would cause an exodus of talented staff. He disagreed with the report's biases and lack of consideration for technical competence. The president agreed and did not implement the recommendations. Subsequent events confirmed this was the right decision.
Ravi Kumar founded DilSeBol, a company that customizes merchandise like t-shirts and mugs with designs provided by customers. He was motivated by similar successful ventures in the US and felt the concept could work in India as internet usage was growing. DilSeBol allows customers to upload designs and complete the ordering process online. Ravi hopes TiE Chennai can help creative entrepreneurs like him access potential investors and customers.
Pravin Shekar is a serial entrepreneur who starts new ventures every few years. What began as part-time work led to multiple market research companies. His current company, Krea, specializes in healthcare market research. As a TiE Chennai member, Pravin mentors
This document provides guidance on developing scenario plots for strategic planning. It discusses two approaches for identifying a small number of scenario logics or plots from the virtually infinite number of possible futures: the inductive approach and deductive approach. The inductive approach involves brainstorming emblematic events or deviations from an "official future" until consensus is reached. The deductive approach prioritizes the key factors of uncertainty and uses a 2x2 matrix based on the two most important uncertainties. Once the scenario logics are identified, the next step is to flesh them out into compelling narrative stories.
The document provides a lengthy discussion and analysis of leadership styles, theories, and concepts based on the author's professional experience and case studies. The author examines lessons from case studies on leadership challenges, different leadership theories and how they impacted a past organization, leadership styles and their effects, the power of emotional intelligence, the concept of self-monitoring and how it applies to the author's potential for leadership. The conclusion suggests strategies for the author to become a more effective leader, including applying concepts around communication, emotional intelligence, and self-awareness gained from the analysis.
The document discusses potential futures for work and management in 2018. It outlines a "probable future" scenario called "The World Continued" where:
- Business will be influenced by new players from emerging markets and require understanding diversity and foreign cultures.
- Business models and structures will diversify and become more open, employee-centric, and community-based.
- Tasks will focus more on skills like innovation, creativity, and social/political skills, while hard/technical skills remain important.
- Workforces will be more diverse, virtual, and fluid, requiring skills in areas like emotional intelligence, collaboration, and value orientation.
It provides recommendations for organizations to prepare, including building market knowledge
Neuroentrepreneurship symposium 2015 Academy of ManagementNorris Krueger
Joint research symposium applying insights from neuroscience to understanding entrepreneurship. Builds on the 2014 symposium which was SRO. This is a great crew so feel free to contact any of them
This document reflects on conversations with over 1200 executives and focuses on the dynamics of business, the work and life of executives, and the world of executive development as a profession. It discusses the challenges executives face in getting results and serving stakeholders while navigating changing business environments and finding work-life balance. The conclusion emphasizes that executive development is about performance improvement and facilitators should offer practical guidance and drop pretensions by hosting dialogues that build trust.
This document reflects on conversations with over 1200 executives and focuses on the dynamics of business, the work and life of executives, and the world of executive development as a profession. It discusses challenges executives face in getting results, serving stakeholders, finding answers, tapping into experience, and more. The conclusion is that executive development is about performance improvement and facilitators should offer practical guidance and drop pretensions by hosting dialogues focused on proven processes deployed by champion executives.
The People-Centered Model of Business (tm)nextbyramla
PC-MoB: See The Big Picture
The People-Centered Model of Business (PC-MoB) is a practical tool through which organizations (businesses and others) examine the reality of their markets by focusing on human activity. It has multiple application modules including: Market Insight, Trend-Forecasting, Entrepreneurship, Creativity, Organizational Leadership, and Social Business - amongst other applications that may be developed "wikinomically."
First published here:
http://triplebottomline.com.pk/response.asp?id=1&sub_id=7
A presentation of:
http://nextbyramla.com
6th Clearing, Settlement & Custody Asia Forum 2012
Isra Bulletin Dec08
1. www.isra.my
WHY IS ISRA IN TOWN?
ISRA – the International Shari`ah Research western experience, the financial industry
Academy is the new kid in town. As with developed based on a very concrete
any new organization, people would be framework or building blocks. Likewise,
anxious to understand its role and the in Islamic finance we need to develop
the concrete theoretical framework that
value proposition it brings. In conjunction
underlie the whole practice (fundamental
with the launch of our maiden ISRA Bulletin,
research) besides addressing the day to
we would like to shed light unto our
day issue (applied research),” Dr. Asyraf
background, why we are here and what
Wajdi Dusuki, ISRA’s Head of Research
we offer. We will also take this opportunity
Affairs, clarified. In other words, at ISRA
to dispel some of the misconceptions
we have both the fundamental and
or queries that lingers in the mind of our
applied research because both are
customers.
important. Applied research will help the
industry resolve short term issues while
Why is ISRA here? fundamental research will help propel the
Amongst the most frequently asked industry towards orderly development.
question is “Why is ISRA here”? The best With regards to these pressing issues
person to answer this question is of course in the industry, one must wonder, isn’t that
our executive director, Dr. Akram Laldin. what Shari`ah advisory boards do i.e. help
“ISRA is here to fill up the gap that we address these pressing issues? Having
have in the industry. On the ground i.e. been a Shari`ah advisor himself, Dr. Akram
people in the industry may have certain pointed a simple
concerns, how to address this issue, how reason why
to address that issue. However, there is relying
no dedicated institution that is doing this on the
job. We do have universities conducting Shari`ah
research, but of course in higher advisors
education institution, the research done alone
is not focused on Islamic finance alone. would
What we need is a focused research not be
where you address the burning issues in
the market. Therefore, in ISRA, this is the
mandate that is given to us, to identify the
pressing issues in the market, co-operate
with the academic and do research
on the area,” he explained our role in
simple terms.
Does that mean we only focus
on applied research at ISRA?
“When we talk about Islamic
finance, we cannot confine
ourselves to only focus on
research that addresses the
issue of the day. From the
Dr Akram Laldin, Executive Director
2. COVER STORY
International Shari’ah Research Academy for Islamic Finance
scattered here and there and it is not
sufficient to help the industry with these Within the six month of our operation
classified. This is one of the challenges that
pertinent issues. “We have to understand we have embarked on 15 research projects
we are taking. We are extracting, without
that the Shari`ah board, even though and seven of these have been completed.
jeopardizing the intellectual property,
they exist within the financial institutions, For an update on our research projects
and make the information accessible
there are many limitations. One, Shari`ah please refer to the Research Update
according to topics. “Lets say you want to
advisors are part-timers. They have their Section. One example of the pressing
find something on Musharakah, you can
core-business; sometimes it’s teaching, issue that we addressed in the banking
go to the Musharakah section and find
while some are attached to administrative sector for instance is the dispute resolution
details – what are the products, what is
posts. So definitely their full time focus will mechanism in Islamic banking. This is one of
Musharakah Mutanaqisah, what are the
be more on their core job. Secondly and the issues that sometime haunt people in
issues, what will happen upon default etc.
more importantly, even based on my own the industry. Whenever there is any dispute
We will try to make it as comprehensive
experience being on the Shari`ah advisory and there is a need to bring the matter
as we can and furthermore we will try to
board, there is no in-depth research that to court, players are not sure about the
link this information with the fatwa that
is being done to address the issue that outcome. They are concerned if the judge
is available on the different issues,” Dr.
is brought to us in the Shari`ah board has proper awareness and knowledge with
Akram provided a glimpse of his vision for
meeting. Probably there might be some of regards to the details of Islamic banking.
ISRA’s research portal. This will facilitate
the scholars that sit on the board that do How shall we address this issue? One of
information gathering by the industry and
research, but these are more ad-hoc kind the alternatives that we are proposing is to
academia, and they can be assured that
of an arrangement. When you have an strengthen the arbitration framework where
the information are from a reliable source.
issue, you try to see a number of references the parties have the option to appoint an
Of course we need to develop this bit by
and discuss the various views and fatwa arbitrator that they are comfortable with.
bit.
and try to come out with a solution by This will minimize the concern on whether
Besides the research portal, ISRA would
adapting to certain views. However there the deciding person has the expertise. ISRA
also like to a certain extent, harmonize
is no deep analysis to determine which is will conduct further research on this option
the different interpretation and views of
the best view, the strongest view and the and hopefully this can help the industry
Shariah that exists in the industry in the long
most practical view for example? So we address the issue of dispute resolution.
run. We will achieve this via the Shari`ah
here at ISRA, it is our aim to provide the “Besides addressing the burning issues
parameter that we are developing. “ISRA
Shari`ah scholars the research findings and in the short run, our immediate aim is to
is not a Shari`ah standard setting body. We
resources in order to assist them in making recruit the new breed of Shari`ah scholars,”
do not issue fatwa, nor do we issue Shari`ah
their decision,” Dr. Akram elaborated. Dr. Akram highlighted. By new breed of
standards. How we are different from the
Shari`ah scholars, we refer to those that
standard setting body is that, standard
have the competency in Shari`ah, finance
What are our aims? setting body will come out with a particular
and legal knowledge. “This will start from
standard. But we are looking beyond that.
next year when we have our scholarship
We have chartered our short term and long
We will try to set the parameter. We will
fund. We have budgeted for five
term aims. As Dr. Akram pointed out in the
give the different alternatives that are
scholarships next year and we will identify
beginning, in the short run we are trying to
available which is within the parameter
potential candidates who will major in
address the immediate issues that need
(i.e. boundary) of Shari`ah. We are not
Shari`ah, minor in finance and law. So they
to be resolved. We have three research
confining to just one school of thought
will be having these three specializations,
units under Research Department at ISRA
but we will provide all the views that are
meaning that they will have good
– banking, Takaful and capital markets, and
within the Shari`ah boundary. We are
knowledge in Shari`ah and reasonable
for the short run we focus on research in
currently also working closely with BNM
knowledge in finance and law. So we
pertinent issues in these different units. Our
to come up with something similar. With
hope that when these people graduate,
approach in doing research is unique. As our
that, hopefully to a certain extent this will
they will be the new breed of Shari`ah
core business is to focus on applied research,
guide the market and nobody can claim
scholars; probably the second generation
from the very beginning we engage with
that they are superior or more Islamic than
of the Shari`ah scholars who will have the
the industry to ensure that we are focusing
others as these practices are all within the
ability to understand finance as well as
on the right areas. “Before embarking on a
Shari`ah parameter, Dr. Akram pointed out
Shari`ah and law,” Dr. Akram shared how
research we would first obtain feedback from
the features of the Shari`ah parameter.
ISRA would help the industry tackle the
the industry via the ISRA-Industry discussion
This is the harmonization that ISRA aiming
daunting issue of limited Shari`ah scholars.
series. Based on their feedback we will
to achieve.
In the long term, one of our aims
prioritize the research areas and assemble
With regards to the geographical
is to develop ISRA’s research portal; a
our research team that comprise of experts
location that we focus on, as an
one-stop centre that people can refer
from the industry and the academia. ISRA’s
international establishment ISRA will not
to. On the internet you can find variety
researcher will be spearheading the team,”
only to look at local issues but we will
of information, but the information are
Dr. Asyraf provided the workings of ISRA’s
research department.
3. COVER STORY
also look at international issues. “In doing As a proactive regulator, BNM has also human resource, we have to we have
so, for next year we are trying to get set up the Islamic Banking and Finance included outsiders (both academicians
strategic alliances with other research Institute Malaysia (IBFIM). Some people and practitioners) to be part of our
organizations. For the past few months, we are also curious as to how ISRA and research team. Even when we coordinate,
have been in good contact with Bahrain IBFIM are different? “IBFIM is also a body we are the authority in the output that we
Institute of Banking and Finance (BIBF), established under BNM, but the main get. Sometimes even we at ISRA forget
Islamic Research and Training Institute focus of IBFIM is training and advisory. that we are just 6 months old,” Dr. Asyraf
(IRTI), Research Department of Emirates That’s why they have the different training pointed out. The expectation on ISRA is
Islamic Bank, Shariah Compliant Division programmes for the industry. In ISRA we high. But we take that as a motivation
of Ar-Rajhi Saudi and Durham University don’t conduct training, except for the to achieve our aims. In charge of the
in the UK where they have a pool of Shari’ah advisors where we will give them research affairs, Dr. Asyraf elucidated
PhD students doing research on Islamic updates and specific trainings. Besides that the co-ordinating role of ISRA will
finance,” Dr. Aysraf enlightened on ISRA’s that we don’t have a structured training always continue in the future because
strategic alliances thus far. “Insha’Allah programme for anyone. On top of that, we want every sphere of the system to
next year we plan to have at least two IBFIM is also doing advisory work; advising develop; not only the market, but also
overseas thematic workshops which will on unit trust for example. In ISRA we don’t the academia. “Insha’Allah even when
discuss international pressing issues,” he do that. In addition, IBFIM is also a profit ISRA has grown to a full fledge research
gave a glimpse of what ISRA has on the making body, but ISRA is a non-profit academy, having maybe 30 to 50 of
table for next year in the international making institution because we have our our own researchers, we will still provide
forefront. endowment fund,” Dr. Akram pointed out grants for universities to conduct applied
the different role of ISRA and IBFIM. research. We will still request the university
How are we Simply put, ISRA is where Shari`ah and to discuss the research area with the
market integrates. This is our niche. “I think industry. This is part of our mandate,” he
different from other we have the combination of Shari`ah reminded.
institutions? people and the people in the industry that Simply put ISRA is here to assist
is working together. This is the wonderful everyone. “I always emphasise on the
As there are increasing numbers of
thing that we have at ISRA. We have need for all of us to work together. Whether
institutions set up to develop this growing
the opportunity to bring these people the Shari`ah scholars, the academician,
industry it is therefore imperative that
together so we can tap into their resources the market players and the regulators. All
ISRA clarifies where we fit in the big
and expertise. This is the ultimate goal at of us should be together. I believe that
picture. What is our niche? How are we
ISRA because without the co-operation when we are in a team, we can produce
different from other organizations? First
of Shari`ah and market, there will be a lot wonders and we can become the best in
and foremost it’s important to establish
of hindrances in the development of the the global industry,” Dr. Akram concluded
how ISRA and INCEIF complement each
industry,” our executive director stressed. our vision, mission and hope for the future
other as both are under the umbrella of
to come, Insha’Allah.
BNM. Nonetheless INCEIF and ISRA focus
Our aspiration
on different realms of the industry. “First
of all I have to clarify that ISRA is within Some people may perceive ISRA as
the set-up of INCEIF. However we are an only a co-ordinating body, linking up
autonomous body within INCEIF. We meet the academic and the industry. “That is
with INCEIF at certain level of governance. partially our role,” says Dr. Akram. “We
We share the same governing council are here to bridge what never happened
and BOD. As it is now we also share the before. This is an avenue that we are
same EXCO with INCEIF. We meet there. opening for both the academic world
However we are autonomous in terms of and the market.” he added.
administration as well as funding. We have Nonetheless ISRA does not
our own fund,” Dr. Akram crystallized the only do co-ordinating
organization structure and ISRA’s meeting work. We have our in-
point with INCEIF. The major difference house research as
between INCEIF and ISRA is that, INCEIF well.
is a university which offers academic “For the time
qualification. At ISRA we do not offer being, due to the
academic qualification, we only conduct limitation that
research. We work closely with INCEIF we have now,
definitely but we don’t offer any academic e s p e c i a l l y
Dr Asyraf Wajdi,
qualification. w i t h
Head of Research Affairs
4. SECTOR REPORT • banking
International Shari’ah Research Academy for Islamic Finance
Novation Agreement from
the Islamic Perspective
By Dr. Uzaimah Ibrahim
Research Consultant, ISRA
In the recent 12 court cases judgement involving BBA house financing facilities in Malaysia, the high court judge,
Dato’ Wahab Patail, classified the BBA cases into two broad categories; BBA with novation agreements and BBA
without the novation agreements. The learned judge said that BBA with the novation agreements are bona fide sales
transaction while those without the novation agreements are not bona fide sales transaction. During the initial days of
Islamic banking in Malaysia, there was a novation agreement involved in house financing but this is not the case any
longer. Some opine that novation should never have been scrapped out from the Islamic home financing facility,
as it offers fairness to both parties, namely the banks and their customer. This article aims to discuss the features of a
novation agreement from the common law perspective and compare this to the Shari`ah viewpoint.
stipulated date. As such, the bank shall
What is novation? case of non-performance by the new
be bound by all terms and conditions
obligor;
Novation is a settled principle of the
therein and shall perform all obligations
• The obligee maintain the same status
common law. It is an agreement that
on the part of the purchaser/customer.
as in the original contract; and
enables substitution of either an obligation
In return, the bank is entitled to receive
• The original contract is terminated.
to perform or a party of an existing
the transfer of the property to affect the
contract. It also includes a substitution
bank’s ownership over the said property.
Novation agreement
of a new debt for an old one, where the
Executing the novation agreement
old debt is extinguished by the new debt.
in Islamic financing does not intend to terminate the original
In some instances, novation may take
contract, i.e. the SP. The original contract
facilities
place when the original parties continue
remains enforceable and binding, except
their obligation to one another, but a new In the Islamic banking industry, initially,
that it is now binding on the new obligor,
agreement is substituted for the old one. novation agreement was part and parcel
i.e. the bank. Perhaps such a difference
Thus, a Novation Agreement is the legal of the Islamic home financing facility. The
does not really matter in common law but
instrument executed by all parties involved executed documents for such facility
is a vital aspect that must be considered
for the said substitutions. mainly include;
from Shari`ah point of view.
A novation agreement is completed • Sale and Purchase Agreement, i.e.
and valid if all parties of the original SP (between the vendor/contractor
Novation agreement
contract give their consent. The obligee and the purchaser/bank’s customer);
vis-à-vis Shari`ah
(the party who benefits from the novation) • Novation Agreement (signed by
must be given notice about the novation.
principles
the vendor/contractor, purchaser/
In addition, the obligor (the party who customer and the bank); and
Many claim that this agreement is similar to
makes the novation) must make the new • Property Sale Agreement (between
the Shari`ah principles on Buyu’ al-amanah
obligee aware and ensure that the latter the bank and the purchaser/
(trust sales) that include Murabahah (mark-
gives his consent. customer).
up sale), Tawliyyah (sale at cost price) and
According to common law practices,
Wadhi’ah (discounted sale). Some others
once a novation agreement is executed, By executing the Novation Agreement,
view novation as resembling Hiwalah
it shall have the following effects; the bank agrees to become a party to the
(transfer of debt), since it involves transfer
• Transfers all duties, obligations or Sale and Purchase Agreement, in place of
of contractual obligations. However, none
benefits arising from the original the purchaser. This will be immediately be
of these contracts fit well within the ambit
contract from the original obligor to followed by the Property Sale Agreement,
of novation agreement, as shown in the
the new obligor; whereby the bank sells the property to
table below:
• The original obligor is free from the the customer on deferred payment terms.
obligations that arise from the original Being in place of the customer, the bank
contract; is deemed to have been a party to the
• The original obligor cannot be sued in Sale and Purchase Agreement from the
5. SECTOR REPORT • banking
Table 1: Comparison between novation and Buyu’ al-amanah
EDITORIAL TEAM
Novation Agreement Buyu’ al-amanah (trust sales)
Advisors:
It does not constitute a new contract These are sales at either mark-up
Dr. Mohamad Akram Laldin
of sale; it is merely an agreement to price, cost price or at a discount.
substitute a contracting party of an The terms may be different from the Abu Bakar Sidek
existing sale; first sale; Dr. Asyraf Wajdi Dato’ Dusuki
The terms and conditions of the Since these sales are independent
original contract (SP) are binding from the first ones, the latter do not Editor
on the new obligor (the bank); and bind the parties of the second sale; Shabnam Mokhtar
and shabnam@isra.my
It requires the consent of the original The consent of the vendor of the
obligee (the vendor/contractors). first sale is not required. Features Editor
Thus, this makes him a party of the
Mohammad Ashadi Mohd Zaini
agreement.
ashadi@isra.my
Zaharuddin Muhamad
zaharuddin@isra.my
Table 2: Comparison between novation and Hiwalah
Nusaibah Mohd Parid
Novation Agreement Hiwalah
nusaibah@isra.my
Coordinating Producers
It is an agreement allowing a
It is an agreement to substitute a
debtor to transfer his debt. Thus, it Haji Abdul Rahim Haji Sairan
contracting party who is purchasing
is required that the transferor be a
a property. Thus, there is no rahim@isra.my
debtor to transferee;
requirement of a party being a
debtor; Wan Aznira Wan Abdullah
The transferee may still have a right
The original party (purchaser) is free aznira@isra.my
of recourse against the transferor
from the obligations arising from the
in cases of death and liquidation/
original contract; and Coordinating Photographer
bankruptcy of the payer; and Noor Aznir Nizam Noordin
The transfer of debt shall take effect
The new obligor becomes the aznir@isra.my
immediately upon the conclusion
party of the original contract
of the contract.
retrospectively from the date of the
contract.
Disclaimer:
While every care is taken in the
preparation of this publication, no
responsibility can be accepted for any
errors.
Conclusion Copyright: All or any other portion of this
Property Sale Agreement only, which
The above list of differences is not bulletin may be reproduced provided
are executed by the bank and its
exhaustive. There may be other acknowledgement of the source
customer. Moving forward, research
differences between a novation is made. Notification of such use is
needs to be carried out to better
agreement and Buyu’ al-amanah or required. All rights reserved.
understand novation from Shari`ah
Hiwalah. Shari`ah compliance was not
Address:
perspective. Is it sufficient to use
the reason why novation agreement
2nd Floor, Annexe Block
existing contracts in Islamic finance
was no longer used in the house
Menara Tun Razak
to achieve the effect of novation or
financing. Instead, the reason cited
Jalan Raja Laut
is there a need to explore into new
was that the vendors/contractors felt
50350 Kuala Lumpur
contracts? If we need new contracts,
uneasy when they have to sign two
MALAYSIA
what shall be the features, rights and
agreements, as well as to deal directly General Line : +603-2781 4000
obligation that it will carry? These
with the banks. Hence, it is no longer Fax : +603-2692 4094
aspects need further research and
in use and the standard Bai’ Bithaman Email : info@isra.my
ISRA will certainly keep you posted
Ajil home financing facility consists of a
with the updates!
Property Purchase Agreement and a Website: www.isra.my
6. SECTOR REPORT • capital market
International Shari’ah Research Academy for Islamic Finance
The relationship between Going back to our original
apprehension in the introduction, what
leakage in commodity leakage are we referring to? How can
commodity Murabahah cause leakage in
Murabahah and
the Islamic finance industry? Is the whole
operation or activities of commodity
Sukuk pricing
Murabahah susceptible to leakage? These
are some vital points that we must clarify
to help enhance our comprehension of
By Shabnam Mokhtar the matter and avoid creating confusion
R e search Consultant, ISRA in the market.
bank buys commodities (metals on LME or
Commodity Murabahah has been
Diagram 2: Commodity Murabahah
CPO as for the case in Malaysia) and sells
extensively applied in the Middle employed in deposit mobilization
this commodity to the client on a deferred
Eastern market while it is a relatively new
basis. The client as the owner of the
product in Malaysia. Although much 1. Client buys commodity on spot basis
commodity now sells the same commodity from broker A
has been discussed and written about
2. Client sells the commodity to Islamic
to another broker so he could obtain the
commodity Murabahah (also known as bank using Murabaha on deferred
cash he was looking for and utilize it in his
Tawarruq or reverse Murabahah), this basis (cost + profit)
operation. The ability to give the client the
3. Islamic bank sells the metal to Broker
article aims to shed light into how the
cash he was looking for renders popularity B on spot basis and obtain cash
leakage in commodity Murabahah may to commodity Murabahah. 4. Islamic bank makes the payment of
affect the pricing of Sukuk. selling price upon maturity
On the other hand, when using
commodity Murabahah as a deposit
mobilizing instrument, since the client has
Leakage in commodity the money and is looking for avenues to
Murabahah 1
place the fund and earn return, he would Broker A Client
$
first buy the metal (using the bank as his
AAOIFI Shariah Standard No. 30 defines
agent) and then sell it to the Islamic bank
Tawarruq as purchasing a commodity
on a deferred basis. Effectively the client
for a deferred price and selling it to a
2
has made a placement that resembles
third party for a spot price so as to obtain
4
1. Islamic bank buys
1 Islamic
commodity on spot basis
Broker A 3 Islamic
bank
from broker A
$ Broker B bank
2. Islamic bank sells the
$
commodity to Client
using Murabaha on
2
deferred basis (cost +
4
profit)
“The concern of abuse that allows
3. Client sells the metal to
Broker B on spot basis leakage of Islamic funds into conventional
and obtain cash
financial market only arises from the
4. Client makes periodic
3 deposit taking activities,” Badlisyah Abdul
Client
Broker B
payment to Islamic
$ Ghani, the CEO of CIMB Islamic clarified.
bank
He highlighted that it is important to know
that there is nothing wrong with commodity
Diagram 1: Commodity Murabahah employed in financing Murabahah as a financial product from
Shari`ah perspective. It is valid under the
Shari`ah principle of Tawarruq.
cash. It can be applied to facilitate true a fixed income deposit since now he will
“There are many commodity
commodities trading or can be employed be receiving a fixed return i.e. the mark
Murabahah products out there that are
as a financing and deposit instrument up charged in the selling price of the
genuine and are managed in a 100%
in the Islamic finance industry. Diagram commodity. The Islamic bank would now
Shari`ah compliant manner; including
1 below illustrates a basic structure on-sell the commodity to another broker,
the utilization of the proceeds from such
of commodity Murabahah used in a gets the cash and invests it elsewhere. This
product. The wrongness of commodity
financing transaction. Simply put, if the is illustrated in Diagram 2 below.
Murabahah arises only when the product
client is looking for funding, the Islamic
7. SECTOR REPORT • capital market
abusing bank’s commodity Murabahah
is abused to facilitate collection of Islamic funds for usage in activities that ultimately
product. When the banks who have these
involves non-Shari`ah compliant activities and worst, investments in riba-based financial
commodity Murabahah products is asked
instruments. This abuse leads to the leakage of Islamic funds into the conventional riba-
where the funds are actually utilized and
based financial industry,” the well-known banker elaborated.
for them to disclose their matching Islamic
Avenues that lead to leakage of assets they would respond that they are not
required to do so under law or regulation.
Islamic fund Many of them even refused to include a
provision in the commodity Murabahah
One must wonder how this leakage could creep into the deposit taking leg of
agreement that states the proceeds are
commodity Murabahah? Referring to Diagram 2 above, when the Islamic bank has
to be used for 100% Shari`ah compliant
sold the commodity to Broker B, it will obtain cash. The next question is, what does the
purposes because they do not want to be
Islamic bank do with the cash? Does it invest in its own operation (which is of course
trapped by the requirement,” Badlisyah
Shari`ah compliant) or does it enter into a back to back commodity Murabahah
shared his experience in the market.
transaction with a conventional bank? If the Islamic bank enters into parallel commodity
Murabahah arrangement with a conventional bank, now the Islamic fund is placed with
a conventional bank.
Implication from
The follow-up question would be, where does the conventional bank place this
leakage of Islamic
fund? Does it have a Shari`ah compliant asset to invest in or does the conventional
bank utilize the Islamic fund to finance its conventional asset? The problem of leakage
funds
would slither in when the conventional bank uses the proceeds it has obtained from
Why should the leakage of commodity
commodity Murabahah to finance its conventional activities or invest in non-Shari`ah
Murabahah be an important concern
compliant activities. Simply put, the counterparty of the commodity Murabahah deposit
to the Islamic capital (ICM) market
opens the avenue for leakage (via the utilization of proceed). The same problem may
participants? What will be the implication
occur if a client places the fund directly to an Islamic window of a conventional bank.
from this leakage? According to Badlisyah,
The phenomenon is depicted in Diagram 3 below.
ICM products are seen as tools to facilitate
effective liquidity management for
Diagram 3: Leakage in commodity Murabahah deposit placement
Islamic banks and Islamic investors and
it competes directly with commodity
Murabahah products. ICM’s growth
1 Client/
Broker A
and success will replace commodity
Islamic bank
$ Murabahah and prevent the leak while the
failure of ICM will benefit the commodity
1. Client/IB buys commodity
Murabahah abuser. We can thus say that
on spot basis from broker A
2 there is negative relationship between
2. Client/ IB sells the commodity
to conventional bank using the demand for commodity Murabahah
Murabaha on deferred and ICM instruments because both are
basis (cost + profit)
3 substitute product.
Conventional
3. Conventional bank sells the Broker B Bank “The leakage essentially causes the
$
metal to Broker B on spot
demand for ICM product to be weak. Both
basis and obtain cash
ICM product and commodity Murabahah
Leakage: provides fixed income return however
Where is this commodity Murabahah typically provides
proceed better return than ICM products as banks
invested can simply quote a higher return while
the return on ICM products depends on
credit rating and appetite of investors.
As such, more Islamic banks and Islamic
How deep is the leakage? In other more than half of the amount is estimated
investors prefer to place their investment in
words, how severe is this problem? Although being managed by conventional banks
commodity Murabahah, thus causing the
a full fledge research would be needed to with Islamic window under the commodity
majority of Islamic funds to be placed in
ascertain the exact depth of the problem, Murabahah products, which can be in the
conventional banks with Islamic windows.
Badlisyah provided some estimate of the form of a fund or a treasury product.
This inadvertently will cause the market
outflow. He noted that out of the reported “The situation becomes worst when
demand for ICM product to become
US$1.3 trillion Islamic funds currently Islamic banks who genuinely take
smaller,” Badlisyah enlightened.
managed in the Islamic finance industry, Islamic funds innocently place it in the
8. SECTOR REPORT • capital market
International Shari’ah Research Academy for Islamic Finance
He further explained that since the
conventional banks are now middleman for
the Islamic funds, the issuer of ICM product
is then dependent on the conventional
bank to take up any offering of new ICM
products. “As a result the expected higher
price tension that you would expect
from a larger investor base (i.e. both
conventional and Islamic investors) is lost.
The cost of ICM products becomes higher
and becomes less attractive. Data shows
that the price for ICM product particularly
Sukuk are now about 20bps to 50bps more
expensive than conventional bonds in the
Badlisyah Abdul
global debt capital market,” Badlisyah
Ghani, CEO,
quoted.
CIMB Islamic
Contrary to the global Sukuk market,
the Sukuk pricing in Malaysia has been
cited to be tighter than the conventional
Conclusion
bond. Badlisyah upholds that this is the
affecting pricing in the Middle East Sukuk
Sukuk pricing is certainly an area that
positive impact resulting from no leakage
market. One needs to keep in mind that the
warrants attention for research and will
in commodity Murabahah. “All commodity
leakage may not be a direct independent
benefit the issuer and investor in the
Murabahah products in Malaysia have to
variable that affects Sukuk pricing, it may
Islamic capital market. The broader
be managed in line with the Islamic Banking
however be an intervening i.e. indirect
research topic may look into factors
Act 1983 which requires 100% Shari`ah
variable that affects the demand (or
affecting Sukuk pricing. While there may
compliance in business operations. With
investor base) for Sukuk. Therefore, besides
be a number of other determinants that
no leakage into the conventional market,
studying the determinants of Sukuk
influence pricing, research should be
Islamic funds are forced to find Islamic
pricing, one could also embark on a study
carried out to explore if the non-leakage
assets. As a result, it adds to the demands
to determine factors influencing Sukuk
in commodity Murabahah is one of the
for ICM products on top of demands from
demand, where the leakage may have a
reason contributing to tighter pricing in
conventional investor base. That is why in
more direct impact. Wait for ISRA’s findings
Malaysia. A comparative analysis could
Malaysia Sukuk is 3-20bps cheaper than
on the topic!
then be undertaken to evaluate factors
conventional bond,” he reasoned.
Interested
to buy copies of
ISRA books?
By DR
. ASYR
AF WA
JDI D
ATO’
DUSUKI
Contact Haji Abdul Rahim Sairan
for further info and price!
rahim@isra.my
9. SECTOR REPORT - takaful
The Concept of Insurable
Interest from Shari`ah
Perspective
By Zaharuddin Muhamad
A s s ociate Researcher, ISRA
The term insurable interest was originally Shari`ah compliant. We have to evaluate
Life Insurance
coined in 1774, in conjunction with the Life the operation of claims in the Takaful
Insurance Act in Britain. Insurable interest • Everyone is considered to have an sector for us to further understand this.
is an important pre-requisite for insurance insurable interest in their own lives as The Takaful buyers pay certain premium
contract because an insurance contract well as the lives of their spouses and (money) in order to enjoy certain benefit
without insurable interest is technically dependents. or protection in future. If the benefit in
null and void for all purposes. This article • The insurable interest only needs future is paid in monetary forms, and there
aims to give some background on the to exist at the time the policy is was no property damages (life insurance
origin of the insurable interest concept in purchased. for example), this would result in exchange
the conventional space and evaluate the of money for money and thus stumble into
concept from Shari`ah perspective. the problem of riba.
The Life Assurance Act of 1774 in Britain
In cases that involves property
Background of the was enacted at a time when wagering
damages, the exchange of money is
concept (gambling) contracts were still enforceable
allowed because the payment of money
at common law since it was passed before
There is no formal and authoritative was actually a compensation for the
the enactment of the Gaming Act of 1845.
definition of insurable interest. In general, damage suffered. This is allowed by the
The purpose of the Life Insurance Act was
a person who may suffer financial loss from Maliki school and is known as Hibah
therefore to prevent wagering under the
an event has an insurable interest in the Bitthawaab. Nonetheless, in my opinion,
veil of insurance. Before the enactment
property or event. A common example payment of money to compensate for
of the Act, there were instances where
always cited to exemplify the concept is future damages, physical damages to a
some prominent leaders’ and celebrities’
as follows. “If your house (that you own) is person’s body or any other payment that
life were insured and eventually these
damaged by fire, the value of your house is compulsory in Islam, does not qualify as
figures were found dead mysteriously. Just
has been reduced, and thus you have property damages that is specified in the
imagine, if anyone could buy insurance
suffered a financial loss resulting from the Maliki school. Therefore payments for these
on a celebrity’s life for example, the
fire. By contrast, if your neighbour’s house types of claims should not come from the
person would obtain a sum of money if the
(which you do not own), is damaged by participant’s premium pool.
celebrity dies. This would open up avenue
fire, you have not suffered a financial loss.”
for life threatening moral hazards. The
Insurable Interest
You therefore have an insurable interest in
person who bought the insurance could
and Takaful Act in
your own house but not in your neighbour’s
arrange for the death of the celebrity.
house. Thus you can insure your house, but
Malaysia
The Act wanted to curb the risky moral
not your neighbour’s house. Diagram 1
hazard that could prevail in the society if In Malaysia, the concept of insurable
below illustrates the concept of insurable
just anyone could take insurance on any interest has been included in the
interest in the general and life insurance
unrelated person’s life or property. Conventional Insurance Act 1996 to ensure
category.
this Act conforms to the Contracts Act
Insurable interest from 1956. On the contrary, as far as the Takaful
Shari`ah perspective
Diagram 1: The concept of insurable interest Act 1984 is concerned, the concept of
insurable interest has yet been included in
The concept of insurable as described
General Insurance the Act.
above does not contradict with the
In order to avoid the same legal
requirement of Shari`ah. However, for a
• You have an insurable interest in any
reparation that happened in the recent
Takaful contract to be Shari`ah compliant,
property you own or which in your
BBA cases, it is proposed that the Takaful
insurable interest is not the only element
possession.
Act include clauses on the importance of
that must be present. In other words,
• The insurable interest must exist
the concept of insurable interest and a
the concept of insurable interest alone
both at the time the insurance is
Shari`ah guide to insurable interest.
would not make a Takaful contract
purchased and at the time a loss
occurs.
10. 10 EVENT UPDATES
International Shari’ah Research Academy for Islamic Finance
This year was a relatively short year for ISRA, as we had only half
year to charter our beginning. Nonetheless every month was filled
with activities reflecting the enthusiastic spirit of the team behind
the scene. Established on March 26th this year and after running
the errands to assemble the team, we first organized ISRA Tea Talk
in July for AIBIM members and with a group of Shari`ah advisors, to
introduce ISRA and garner support from both the market players
and the Shari`ah scholars. Other major events organized by ISRA
include among others the Thematic Workshops, Luncheon Talks,
Islamic Finance Seminar, MoUs’, besides ISRA’s participation in
events organized by the industry.
11. 11
EVENT UPDATES
Following this, the month of August was eight papers presented during the seminar as highlighted in Table 1 below. Sheikh Esam
filled with ISRA-Industry discussion series M Ishaq, a well known Shari`ah advisor also joined the panel discussion during the seminar
to gauge the experts’ view on pressing together with Badlisyah Abdul Ghani, CEO of CIMB Islamic and Dr. Aznan Hassan. The
issues in the market. The Takaful unit kick papers, power points and video of the presentations can be downloaded at ISRA’s
started the discussion series on August 19th website: www.isra.my – go to our download section! Don’t forget to pay us a visit!
followed by the Banking unit on August
28th. After a short break in September
Fiqh Aulawiyyat in reTakaful - Risk- Azman Ismail
due to the month of Ramadhan, ISRA
Based Capital (RBC) Standards in CEO, Independent Islamic Financial
organized its first thematic workshop on
Islamic Institutions. Planners Sdn. Bhd
Dispute Resolution in Islamic Banking on
Shari`ah Inspection in Surplus Dr. Younes Soualhi
30th October. The thematic workshop
Distribution – Islamic Views and its Deputy Dean, IIUM Institute of Islamic
involved a focused group discussion
Current Implementation Banking and Finance
approach where Mohamed Ismail
Ownership and Hibah Issues in Takaful Dr. Azman Mat Nor
Mohamed Shariff, a renowned lawyer
- Classical Discourse and Current Assistant Professor, Kuliyyah Of
from SKRINE presented a paper on the
Implementation Economics Management Sciences,
recent judgement of 12 BBA cases in the
IIUM
first session followed by three discussion
What is the Future Outlook for Shari`ah Dr. Muhammad Syafii Antonio
sessions. The participants in the thematic
Harmonization? Member, Shariah Advisory Council,
workshop were selected experts in the
BNM
industry, former judge, Shari`ah panel and
Shari`ah Audit for Islamic Financial Dr. Abdul Rahim Abdul Rahman
academician to ensure feedbacks and
Services: The Needs and Challenges Associate Professor, IIUM Institute of
inputs collated are concrete and relevant
Islamic Banking and Finance
to the market. ISRA would soon publish a
The Status of Wa’ad and its Implications Dr. Nurdianawati Irwani Abdullah
monograph that captures the presentation
in Contemporary Islamic Banking Assistant Professor, Kuliyyah Of
and discussions of the Dispute Resolution
Economics Management Sciences,
thematic workshop. Make sure you keep
IIUM
your eyes on this! We welcome feedback
The Importance of Islamic Fixed Shamsun Hussain
from the broader market participants and
Income Securities in Developing the Director, Global Markets, CIMB
academia alike!
Islamic Financial Markets Islamic
November was the month of the
“Shari`ah-Compliance or Shari`ah- Dr. Aznan Hassan
year as we had the inaugural ISRA Islamic
Driven Approach?: Towards Full Shariah Advisor, Bursa Malaysia
Finance Seminar (IIFS) and ISRA Launching
Appreciation of the Philosophical Roots
officiated by the honourable prime minister
of Islam
of Malaysia, Datuk Seri Abdullah Ahmad
Badawi who was represented by the Last but not least, in the final month of the year ISRA organized the Council of Scholars
Minister in the Prime Minister’s Department meeting and the International Shari`ah Scholars Dialogue (ISSD) gathering about 70
Datuk Seri Ahmad Zahid Hamidi. The prominent Shari`ah scholars from around the globe. The objective of the dialogue is
governor of Bank Negara Malaysia, Tan to enhance the existing collaboration efforts on Shari`ah matters and strengthen the
Sri Dr Zeti Akhtar Aziz was also present framework for cooperation and harmonisation amongst Shari`ah scholars. It will thus
for the launching which was held on the provide the opportunity to deliberate and exchange ideas on the latest development in
November 11th. During the launch, ISRA Islamic finance. The Islamic capital market also held its ISRA-industry meeting discussing
also took the opportunity to sign a MoU issues in the Sukuk market.
with AIBIM to co-operate on expanding
research and training development model
in Islamic Finance. Earlier in August ISRA has
already signed another MoU with MNRB
Re-Takaful to work together in developing
an alternative model for reTakaful.
The seminar received overwhelming
responses. We could still recall how we had
to explain to callers one day before the
event how we were already overbooked.
IIFS and the launching attracted around
400 participants from market players,
regulators and academia. There were