Welcome to the Islamic Finance Resources blog, a grassroots initiative started by industry professionals and supported by practitioners from around the globe.

We constantly update this site and its overall content, and encourage you to use the various navigation tools available and welcome your feedback and comments.
A few of the resources that you can find in this site:
- Funds@Work: Network Analysis Among Sharia Scholars v 4.0
- ISRA: Islamic Finance Knowledge Repository
- IFSB-IRTI-IDB Islamic Finance and Global Stability Report
- Sukuk Reports: I, II, III, and IV
Much more available under 'Industry Reports' and 'Academic Papers' (right hand side menus)

Islamic Finance in the News

Islamic Finance Gateway on Twitter

30.5.10

Opalesque Islamic Finance Intelligence - Ninth Issue

Welcome to the ninth issue of Opalesque Islamic Finance Intelligence (download the PDF version), it's a busy edition! We touch on equity screening in our editorial section, while the Featured Resource covers multimedia and interactive sources. The Featured Structure section has Nikan analyzing how successive parallel Murabahas can be used to construct a Profit Rate Swap.

Lex Islamicus hears from Hakimah Yaacob and Edib Smolo, both from the International Shari’ah Research Academy (ISRA), as they dissect the approach taken by Enlgish courts towards Islamic finance contracts. Furthermore, the Kulliyyah Korner hears from Ezry Fahmy, Jhordy Kashoogie and Asim Anwar Kamal who co-authored a study on the relationship between Shariah compliant structures and the Maqasid al-Shari'ah.

As part of our ongoing survey (The Islamic Window) Joy Abdullah delves into the perception of Islamic finance, particularly from outside of the industry. This is complemented in the Industry Snapshot by Deloitte's David Vicary who provides his views on the importance of education and financial literacy. Our Opinion Column shares the views of Nihad Awad from CAIR, on a topic that might not appear to be related to Islamic finance at the outset, although we argue the industry has an opportunity to contribute here in a positive way.

As always, we are keen to hear your comments & suggestions and remember that you can visit our online archive (see reference link) for access to our ever-growing databank of Opalesque Islamic Finance Briefing as well as all of the back issues of Opalesque Islamic Finance Intelligence.

Download the complete issue of Opalesque Islamic Finance Intelligence here.

Alternatively you can read each article separately in the OIFI Archive:
Editor’s Note: Equity Screening and the Golden Calf
Featured Resource: Islamic Finance Multimedia
Featured Structure: Shariah Compliant Profit Rate Swap
Lex Islamicus: It is not a murabaha contract; it is just an English law of contracts
Kulliyyah Korner: Debt versus Equity Financing in the Light of Maqasid al-Shari'ah
The Islamic Window: Industry Perception
Industry Snapshot: What Makes Sense?
Opinion Column: A Muslim Response to 'Draw Muhammad Day'
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28.5.10

Ernst & Young’s World Takaful Report 2010

Ernst & Young’s World Takaful Report 2010
The third edition of Ernst & Young’s World Takaful Report 2010: Managing performance in a recovery, was unveiled recently. The report reveals that the Takaful industry is expected to surpass US$8.8 billion in contributions in 2010.


Click here to download a copy of the report presentation.
Click here to download a copy of the report (one-time registration required on their site).
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26.5.10

The Concept and Operations of Swap as a Hedging Mechanism for Islamic Financial Institutions

Assoc. Prof. Dr. Asyraf Wajdi Dusuki & Shabnam Mokhtar
ISRA Research Paper (No. 14/2010)

"This paper has been prepared to discuss the concept and operations of the swap instrument as a hedging mechanism in the Islamic financial system. The main objective of this paper is to give a clearer picture of the swap mechanism as offered by the international Islamic financial institutions and how its operations are structured in accordance with Shariah principles and contracts. In preparing this paper, ISRA has held a series of internal discussions as well as with outside parties, including Shariah experts and operating officers from international banks directly involved in the structuring of Shariah-compliant swap products. Documents related to the products and related academic materials were also referred to, giving a wider and thorough perspective on the issue."
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24.5.10

Shariah, Economics and the Progress of Islamic Finance: The Role of Shariah Experts

Shariah, Economics and the Progress of Islamic Finance: The Role of Shariah Experts
Dr. Mohammad Nejatullah Siddiqi
Seventh Harvard Forum on Islamic Finance
April 2006

"Discussing the role of Shariah experts in the development of Islamic economics and Islamic finance calls for a look at the nature of economics and the focus of Shariah. The chief concerns of economics over the ages have been efficiency and equity. Shariah in its broader sense that gives primacy to objectives over rules and regulations shares these concerns. However the same may not apply to shariah meaning fiqh : i.e., laws codified at a particular time and place. The historical context in which we approach our subject today sends mixed signals. The schools of traditional Shariah learning had long tilted towards teaching codified fiqh with few insights into the objectives, the maqasid al-shariah. But the new assignments given to Shariah scholars trained in these schools increasingly called for paying attention to objectives while interpreting the rules. How far have they been able to meet this challenge, is one of the questions whose answer I will try to explore. I begin by first narrating what happened in the name of Islamic economics during the last century then trying to understand where we find ourselves today and how we arrived where we are in the business of Islamic finance."
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22.5.10

Concept Paper on Shariah Governance Framework for Islamic Financial Institutions

Concept Paper on Shariah Governance Framework for Islamic Financial Institutions
Bank Negara Malaysia, May 2010

This concept paper was released recently and its proposed framework is divided into six sections:

Section I - General Requirements of Shariah Governance Framework
General requirements of the Shariah governance structure that describes the essential key functional or key organs

Section II - Oversight, Accountability & Responsibility
Outlines the level of accountability and responsibility of the board of directors, Shariah committee and management of the IFI.

Section III - Independence
Aims at safeguarding the independence of the Shariah committee in ensuring sound Shariah decision, and emphasis on the role of the board of directors in recognizing the independence of the Shariah committee.

Section IV - Competency
Highlights requirements and expected competencies to ensure key functions are capable of implementing Shariah governance.

Section V - Confidentiality & Consistency
Minimum set of rules that emphasis on the importance of observing and preserving confidentiality and improving consistency by the Shariah committee.

Section VI - Shariah Compliance & Research Functions
Prescribe the functions of the internal Shariah review, Shariah audit, Shariah risk management process and the Shariah research functions.
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18.5.10

The Rise and Fall of Gulf Finance House

The Rise and Fall of Gulf Finance House
By Mohammed Khnifer, Aatef Baig, and Frank Winkler
Reading University, May 2010

This paper dissects the balance sheet and business model of Gulf Finance House (see GFH dividend/stock price chart), and scrutinizes the existence of a "pre-exit premium" in their activities - on top of the usual exit fees and/or performance fees. The study suggests that this practice (uncommon even for conventional Private Equity businesses - much less for an Islamic Private Equity house) was pioneered by GFH and it is this same practice that brought them down to their knees. This is perhaps the first case study wholly dedicated to GFH, and it goes on to suggest that there is a connection between the Murabaha model and their Islamic Private Equity model.

Many thanks to Mohammed Khnifer for sharing their paper.
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16.5.10

Islamic Finance and Economics as Reflected in Research and Publications

Islamic Finance and Economics as Reflected in Research and Publications
S. Nazim Ali, Ph.D.
Harvard Law School

"The development of the Islamic Finance (IF) industry is closely linked to the research pursued in its field. As soon as new theories are generated by researchers, the industry picks them up and implements them. And as soon as the industry encounters new problems, they turn to the researchers to find a way to overcome them. A closer look at the relationship between research and the industry makes several trends apparent. This paper aims to discuss and analyze those trends so as to offer a general understanding of this burgeoning field."
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14.5.10

Deloitte's New Islamic Finance Portal

The Deloitte Islamic finance portal has been recently launched as a resource for all participants in the Islamic Finance industry and will feature regular insights from practitioners and their Sharia'a Scholar. They will discuss a variety of topics including the key opportunities and challenges facing the Islamic Finance industry.

In addition, a multimedia glossary section is available to those new to the industry seeking to learn more. Topics covered in these webcasts include Musharaka, Mudarabah, Murabaha, Ijarah, Salam, Istisna' and Sukuk.  This is complemented with an interview with their own Sharia'a Scholar, Mufti Hassaan Kaleem, who provides a candid discussion on his background and his views of the Islamic finance industry. Furthermore, there are periodical blogposts from their Global Leader in Islamic Finance (Daud Vicary Abdullah) in the View from the front segment of the site.
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Deloitte Webcast: Interview with Sheikh Muhammad Taqi Usmani

For their new Islamic financ portal, Deloitte has as an inaugural feature an exclusive interview with Sheikh Muhammad Taqi Usmani (Chairman of the AAOIFI Sharia'a board), in which he revisits some of the important Sharia'a issues which are currently being discussed in the industry.  Amongst the topics covered in the webcast, Sheikh Taqi Usmani provides clarity on the recent rulings from the OIC Fiqh Academy on the use of Tawarruq, and gives his view on the application of Islamic Finance in the post financial crisis era.
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12.5.10

An Introduction to Takaful – An Alternative to Insurance

An Introduction to Takaful – An Alternative to Insurance
By Muhammad Ayub
Senior Joint Director, Islamic Banking Department
State Bank of Pakistan, Karachi
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10.5.10

Islamic Banking: Interest-Free or Interest-Based?

Islamic Banking: Interest-Free or Interest-Based?
Beng Soon Chong, Nanyang Technological University (NTU)
Ming-Hua Liu, University of Macau
Pacific-Basin Finance Journal
October 2007

Abstract: A unique feature of Islamic banking, in theory, is its profit-and-loss sharing (PLS) paradigm. In practice, however, we find that Islamic banking is not very different from conventional banking. Our study on Malaysia shows that only a negligible portion of Islamic bank financing is strictly PLS-based and that Islamic deposits are not interest-free, but are closely pegged to conventional deposits. Our findings suggest that the rapid growth in Islamic banking is largely driven by the Islamic resurgence worldwide rather than by the advantages of the PLS paradigm and that Islamic banks should be similarly regulated as their western counterparts.

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8.5.10

A Roadmap for Making Islamic Finance Sources More Accessible

A Roadmap for Making Islamic Finance Sources More Accessible
The Role of Secondary Services in the Dissemination of Research

S. Nazim Ali
Director, Islamic Finance Project
Harvard Law School

Abstract: "Secondary services, particularly electronic databases, have revolutionized research by bringing together more resources for one’s disposal. This virtual network has exponentially increased the availability of information, thus making relevancy one of the most important questions in data collection. The Internet may be useful for finding introductory information because the turn-over time is short and the resources are practically unlimited. However, the internet is inherently flawed as a research tool for serious researchers because there is no barrier to entry, hence regardless of credentials or veracity anyone can post anything as a “fact.” The issue of quality assurance then becomes important. Quality assurance can stem from professional authority (who is writing the article), institutional authority (where is the research being undertaken), or a publisher’s authority (by whom is it being published). Therefore, though the Internet is a good source of industry news, market
news, and consumer perceptions, established outlets (both print media and electronic) should be preferred."

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6.5.10

Multimedia & Interactive

We have made some additions to the blog - there is a new "Multimedia & Interactive" boxlet on the top right hand side to easily navigate to this content (alternatively all these posts can be found using the Multimedia label).

You will also notice we separated our document archive (right hand side menus), we now have two different sets: "Industry Reports & Articles" and "Academic Papers & Case Studies". We are finding it increasingly necessary to develop a more precise catalogue, and in that sense we look forward to contribute to the Islamic Finance Library as it develops.

Last but not least we have added 'addtoany' functionality, this will enable you to share any specific post with your friends/peers regardless of what network you use (Linkedin, Facebook, etc, etc).
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