...Islamic Banking and Finance: History Development Slide #1 Some Issues History Of IBF Development of IBF -Overview- 2. Islamic Banking and Finance: History and Development History and Development of IBF in Bahrain Full Fledged IB vs. IB windows • Word ‘bank’ comes from the word ‘banco’ - A table or a bench on which Italian money-changers used to display their monies and records and conduct their transactions History of Islamic Banking and Finance • Arabic financial and economic system preIslam – Trading based arrangements were common • Bay’ al-musawamah (bargaining) • Bay’ al-muzayadah (auctioning) • Bay’ al-amanah (trust sale) – Al-murabahah (resale with profit) – Al-tawliyyah (resale at cost) – Al-wadiah (resale at loss or below cost) History of IBAF- (2) – Barter trade was common – Al-sarf (money exchange) • Lack of standardization – for e.g., 10 grams of gold in coin form = 15 grams of gold in bracelet form – Institutionalization of riba – Widespread gharar and maysir – Monopoly, fraud and economic injustice was common History of IBAF- (3) • With the advent of Islam, – Eradication of riba institutions and practices – Eradication of gharar transactions – Institutionalization of fair and equitable markets • No monopoly, fraud • Standardization of money and commodity exchanges – Hadith on the six commodities – Islamization of many business organizations and institutions • Mudarabah, musyarakah, salam, muzara’ah (sharecropping or partnership...
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...Islamic Banking Malek Alraddadi 02-24-2014 FIN-610 Introduction This study debates upon the history of Islamic banking. What are the ethical issues involved in the implementation of Islamic banking. Since the birth of Islam what type of steps are taken and by whom these measurements were taken. Besides this this paper also declares the response and customers point of view regarding Islamic banking with the help of different studies. History of Islamic banking The term Islamic banking got regular in the 1960's, however the systems and thoughts of the framework were suggested and operated since the beginning of Islam. Numerous studies and explores have indicated that Islamic money components were utilized within the Muslim world all around the Middle Ages; in leading exchange and business exercises. Charging investment on credits was not regular in those days. The first run through investment bearing credits were generally utilized within the Muslim world, particularly in the Middle East, was throughout the Ottoman Empire's governed in the fifteenth century. Mehmet Ebusuud Efendi, the senior Islamic minister of the Ottoman Empire, issued a fatwa (decision) permitting the charging of investment and thinking of it halal (allowable) as long as it was underneath 10%. Despite the fact that it was clear in The Holy Quran that investment was strictly disallowed, practically nobody could challenge the senior Islamic priest's decision since testing him might mean testing the...
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...1. Introduction History of Islamic Business Transaction Without a doubt, the history of Islamic Banking is quite interesting. Since the medieval era (1,000 – 1,500 AD), businesspeople in the Middle East engaged in financial transactions. At this time though, these transactions used the same financial principles as the Europeans. Early History of Islamic Banking Since the Arabs of the Ottoman Empire traded extensively with people in Spain, they also developed certain no-interest financial systems that worked on a profit and loss sharing method. These systems, in turn, financed trade and other business affairs. When the Middle Eastern and Asia began to be more important trading partners for various European companies, the Europeans opened banks in these countries – with many of these banks based on the interest-bearing financial system. As the trading relationship with the Europeans continued to play an important role, these types of financial institutions began to be more prominent outside of Europe. However, even when local trading business owners used these commercial banks, they often only transferred money between accounts. Both borrowing and depositing money was limited as the local population wanted to refrain from partaking in interest-bearing transactions. Further, certain co-operative institutions based on the original profit and loss sharing model still existed, but only in certain locations. As economic demands increased, avoiding banks was not an option...
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...Chantal Badie Islamic Extremists English 135-Advanced Composition Devry University Dr. Ralph Monday April 7, 2011 Islamic Extremists Nearly everyone has heard about Islam and the Arab world. In addition, many countries have already faced issues with the Muslim believers. Islam has caused problems, terrorist attacks, anti-democracy all over the world. They were also very successful in sending a message of who they truly are. People who are literally obedient to the Islamic faith are called Islamic Extremists. People, who are of the Islamic faith however desire to survive in peace without tribulations are not considered obedient or dutiful to the Islamic faith, these people are called moderate Muslims. Therefore, the Islamic religious extremists are the major group in Islam who follow the Qur’an word for word and create extreme violence that moderate Muslims do not. Islamic extremism started in Egypt in the late 1920s. During the inter-war years, the country was occupied by the British military. The Nationalist Wafd movement, led by Saad Zaghloul, opposed the presence of the British, as would anyone whose country is being occupied by a foreign military power. (A brief history of Islamic extremism) In 1928, Hassan al-Banna established the term “The Muslim Brotherhood” which was the first Islamist movement. The British government supported the nascent movement in an attempt to counterbalance the Nationalists. In modern Egyptian politics, the Muslim Brotherhood is the largest...
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...1.0 INTRODUCTION Islamic financial system are being developed in the implementation and practice in our country today .System Islamic finance in Malaysia accounted for Islamic banking, interbank money market, Islamic insurance, or takaful, Islamic capital markets and financial institutions that provided alternative sources of funding . Islamic jurists consider seriously the core in the tradition Istinbat al-Ahkam (legal formulations) to address current issues such as the question of the driver legal-illegal, usury, gharar maslahah and maqasid syar`iyyah. However, in doing this, they are always taking a balanced approach between theoretical and practical aspects of compliance with Sharia principles and the `urf al-iqtisadiyyah (custom economic...
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...Islamic Finance is a financial system that doesn’t work like other conventional banking systems. It follows the Islamic law, Shariah, which doesn’t allow certain aspects of a normal banking system such as usury and speculation. There are some main principles to be followed in Islamic banking. First of all, it prohibits interest, or Riba. Riba is forbidden in Islam, and therefore Islamic banking system adopts the principle of profit and loss sharing. It also prohibits uncertainty, gambling, and prohibits certain products and industries such as alcohol and tobacco. Islamic Finance needs to be in accordance with the Shariah. All products and contracts follow Islamic principles that conventional financial systems do not, such as interest and risk sharing, and uncertainty. Conventional financial systems have never worked this way and it worked for them for many years until they were hit by the financial crisis. The crisis had a minimal impact on the Islamic financial systems because they did not comply with all the factors that created the crisis in the first place. There were 3 main factors in the creation of the financial crises. First, subprime loans, which was lending to certain people who did not have a good credit history and were bound to default. The banks than charged them with higher rates that increased their risk of defaulting. Secondly, there was securitization, which was creating securities from un-liquid assets. This process is used by banks to create securities from...
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...north, Germany to the east, and France to the south. Luxembourg has a population of 524,853 and an area of 2,586 square kilometers making it one of the smallest sovereign nations in Europe. Luxembourg has a long history in Islamic finance that dates back to 1978 when the Islamic Banking System Holdings Limited Luxembourg was established as the first Islamic financial institution in Europe. This was followed by the establishment of Takafol S.A. in 1982, the first Islamic insurance company in Europe. Such history has improved the attractiveness of Luxembourg within Islamic finance industry. There are some recent developments: Since April 2008, the Minister of Finance has set up a task force bringing together key actors of the Islamic finance industry in Luxembourg. Its mission is to look at how Islamic finance can be further developed in Luxembourg. In 2008, the Association of the Luxembourg Funds Industry (ALFI) launched a working group focusing on the development of Luxembourg as a center of excellence for Shariah compliant funds. In early 2009, the Luxembourg Deutsche Bank launched "Al Mi'yar", a Luxembourg domiciled platform which aims at smoothing the issuance of Shariah compliant securities. In 2009, the Central Bank of Luxembourg became a member of the Islamic Financial Services Board (IFSB) and, as such, is the first Central Bank of the European Union to become a member of that institution. In January 2010, the Luxembourg Tax Authority published a circular, the object...
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...History banks Part 1 changes in executive mgt and shariah advisory board Qualification of top mgt and mgt team Part 2 changes in banking philosophy or principles Mision vision obj corporate strategy Part 3 changes in banking practices and practical application of islamic bank Implement islamic or not Trading activities Product Annual reports Donation Sponsorship Part 4 problem Effect Solution Financial statement PART ONE Board of Directors | | Mr. Salah Mohd I Al Jaidah Chairman | | Dr. Saleh Jameel Malaikah Deputy Chairman | | | | Dr. Fouad Hayel Saeed Director | | Mr. Shahzad Shahbaz Director | | | | Mr. Subrata Kumar Mitra Director | | Mr. Syed Maqbul Quader Director | | | | | | | | | Dato’ Dr Md Khir Bin Abdul Rahman Independent Non Executive Director | | Dato’ Noorazman Bin Abd Aziz Independent Non Executive Director | | | | Dato' Sri Dr. Muhammad Shafee Bin Muhammad Abdullah Independent Non Executive Director | | | | Management Team | | | Datuk Mohamed Azahari Kamil Chief Executive Officer | | | | | | Roslan Hj Shafiei Chief Operating Officer | | | Abdul Latif Bujang Masli Chief Financial Officer | | | | | | Sharifah Normah Acting Head, Risk Management | | | Azidy Bin Daud Treasurer | | | | | | Faris Yahya Head, Investment Banking | | | Zamri Shariff Head, Asset...
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...whole scenario was the relative stability of Islamic Financial Institutions (IFIs). In the last decade, IFIs have witnessed an impressive growth and have begun to make an impact on the current financial setup. This paper aims to highlight the basic foundation of Islamic financial system and the development of different markets and institutions. It will then point out certain issues and challenges facing the Islamic Financial Institutions. HISTORY Early History: The history of Islamic Financial system goes back to 1,000 – 1,500 AD, during which the Middle Eastern tradesmen would engage in transactions based on Shariah. During that time, the Ottoman Empire Arabs had good trade relationships with the Spanish, and they established their financial systems without interest, based on profit and loss sharing basis. As time went by, Middle Eastern and Asian regions became important trading partners for European companies such as the Dutch East India Company, as a result of which European banks started to spread their branches in these countries, which typically were interest-based. Thus the conventional financial institutions became more dominant as Western countries started to play an important role in world economy. Although, credit unions and co-operative societies based on profit and loss sharing system continued to exist, their activities were focused on very small geographical areas. Islamic Banking Practice, Early Initiatives: Islamic Finance started to grow radically in the...
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...Benefits The idea of Islamic banking was initiated and brought up by some economists who were conscious about socio economic development of Muslim nations based on Islamic principles. It was based on noble vision and objective of Islamic banking base on profit and loses sharing principle. The foundation of Islamic banking theory that they proposed was based on mudaraba and musharakah contracts as mechanism to operate Islamic banking system. “The early contributions on the theory of Islamic banking were only discussed as part of the subject in Islamic economic system. For example, the book by Qureshi on Islam and the Theory of Interest (Qureshi (l946)) which looked upon banking as a social service that should be sponsored by the government like other public institutions such as public health and education.2 His view was based on the point that the bank could neither pay any interest to account holders nor charge any interest on loans advanced. He also suggests the possibility for both Islamic banks and entrepreneur to create a partnership. No mention was made of profit-sharing.” Other economists were come up with different ideas at earlier stages such “the principle of mudarabah was appealed systematically by Uzair (l955). His main contribution lay in suggesting mudarabah as the main premise for 'interest less banking'. However, his argument that the Islamic bank should not make any capital investment with its own deposits rendered...
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... |ID | |Fahamida Sultana |B-101875 | |Rabeya Bashry |B-101876 | Batch : 30th Semester : 8 Course Teacher : Md. Ataur Rahman Course Teacher Course Code : 4804 Course Title : Strategic Human Resource Management [pic] DBA, IIUC, DC Date of Submission: 5th January, 2014. LETTER OF TRANSMITTAL January 05, 2014 To Ataur Rahman Course Teacher Department of Business Administration International Islamic University Chittagong Dhaka Campus. Subject: Submission of Assignment. Dear Sir, This is a great pleasure to submit the assignment on Islami Bank Bangladesh Ltd. as the...
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...Jamiat-e-Islami, Islamic political party in Pakistan INTRODUCTION 1. The rise of Islamic militancy or the jihad culture in Pakistan was directly sponsored by the security forces of Pakistan and is a legacy of Pakistan’s creation as an Islamic state and Pakistan’s involvement in the creation of the Taliban and its rise to power in Afghanistan. Since the arrival of the United States in the region post-9/11 and its support for Pakistan in its fight against Islamic extremism, Pakistan’s home-grown insurgent forces have turned its fight against the state itself in its resistance against a stable and democratic government. This conflict has led to a growth in Islamic extremism in Pakistan’s border regions which have turned into safe-havens for fighters in Afghanistan in their war against the US and the Government of the Islamic Republic of Afghanistan (GoIRA). Evidence shows that these fighters still receive covert support from Pakistan’s Inter Services Intelligence (ISI) agency and elements of the Pakistani military. 2. Scope. This essay will first explain the roots of Islamic militancy in Pakistan including Pakistan’s involvement in the rise of the Taliban and home-grown extremist groups. This essay will then examine the nature and extent of the conflict between the Islamic militants and the Pakistani government and finally how this conflict is influencing the insurgency in Afghanistan. 3. Aim. The aim of this essay is to explain the causes and nature of the conflict between Islamic extremists...
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...Journal of Islamic Banking and Finance Vol. 2, No. 1; March 2014 23 Islamic Banking Scenario of Bangladesh Salahuddin Yousuf1 Md. Ariful Islam2 Md. Rayhan Islam1 Abstract With an aim to explore the current Islamic banking scenario of Bangladesh, this study examines the key concepts of Islamic banking and its history in the world and in Bangladesh as well. This secondary data based research meets its objectives of reviewing relevant concepts, history and current performance of the Islamic banks of Bangladesh through both qualitative and quantitative approaches. From the establishment of first Islamic bank in 1983, this country has currently eight Islamic banks. Except one individual bank (ICBIBL), most of the Islamic banks show remarkable growth in their profitability in the last decade. One reason behind this consistent negative figure in profitability of this bank is the frequent change of ownership. But overall significant contribution of the Islamic banks in the banking industry is visible from the research. This paper provides up-to-date scenario of the Islamic banking in Bangladesh. Keywords: Islamic Banking, Riba, Performance, Banking Industry JEL-classification: E44 G10 G21 1. Introduction Islamic banking and finance is a creation of modern age. Capitalism argues, capital- one of the key factors of production, deserves fixed return whereas the entrepreneurs have to bear all the risks. The conflict of opinions with the Islamic values starts from this very...
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...1.0 Abstract Islamic Finance is an abstract concept until the first half of the twentieth century. In Malaysia, it has been almost three decades when the first Islamic bank makes its debut. Islamic banks have to compete with its competitors which is a conventional banks which have longer history than Islamic banks. For this competition, Islamic Finance have to know the awareness, understanding and perceptions of Malaysians towards it. Islamic Finance not only available for Muslims, but it also available for non-Muslims as well. In Malaysia, 40% of the population is non-Muslims and hence non-Muslims market is equally important to Islamic Finance (Bashir & Mail, 2011; Latiff, 2007). The purpose of this research is to examine the level of awareness, understanding and perceptions of Muslims in Malaysia of Islamic Banking products and services. In additional, this study also aims to investigate if any demographic influence it’s means the structure of population of the awareness, understanding and perceptions of Islamic Finance products and services among Muslims in Malaysia. A total of 50 respondents from different course and carrier in Unikl are selected for the purpose of this study. For the analysis, we used the primary data and Secondary data was adopted to analyse the results. The results show that more than half of the respondents are aware of the Islamic Finance in Malaysia but they do not aware of most of the products and services offered by Islamic banks. Muslims understanding...
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...was decorated with mosaics, marble columns and fresco paintings on the wall. The dome of Hagia Sophia is what fascinates architects, engineers and art historians the most. This particular design, pendentive—the triangular form providing the architectural transition between the circular and square shapes 1 . Just below the dome, 40 windows were placed letting light in and shine on the mosaics. The pendentives and the windows created an illusion of the dome floating above the wall. In 1453, Constantinople was conquered by the Ottoman Turks. Shortly after, Sultan Mehmet II ordered the church to be converted into a mosque. In the years to follow, the interior and the exterior of the mosque began to change. Due to the Islamic customs, all the mosaic figures and paintings on the wall were obscured with plaster along with all Christian symbols. Minarets were...
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