...Khaldun. They defined it as the creation, developing and delivery of unique customer satisfying competitive products and services at a profit to organization and customer in the lights of Islamic values and principles. In contrast, conventionally it is defined as the process whereby an individual's personal and financial goals are achieved through the development and implementation of a comprehensive financial plan. Islam is a comprehensive, integrative and holistic religion that governs all aspects of life, major and minor, personal and social, spiritual and materialistic and relates this worldly life to the Hereafter. This means that we need to practice Islam while we perform our business and economic activities. Muslims are encourage planning for their life and put efforts to achieve the goal setting then ask help from Allah. The final stage is tawakal for what the result and takes it as the destiny bestows by Allah. The prophet Muhammad used to supplicate Allah: ‘My Lord, help me and do not give help against me, grant me a victory, and do not grant victory over me, plan on my behalf and do not plan against me, guide me and made my right guidance easy for me, grant me victory over those who act wrongfully towards me….’[1] (Narrated by Abu Daud.) In Islam, financial planning is not just merely a process of acquisition and accumulating wealth but it has a broad definition which relates to the concept of vicegerent (kalifa). According to the Holy Qur’an, God created...
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...Islamic Banking Copyright Regd. No. Publications Rights Reserved with DARUL - ISHAAT KARACHI FIRST EDITION 2002 PRINTED AT ILMI GRAPHICS PUBLISHER DARUL - ISHAAT URDU BAZAR KARACHI-1 PAKISTAN. E-mail : ishaat@digicom.net.pk Ph: 021-2631861 AVAILABLE AT IDARATUL MA’ARIF, DARUL ULOOM, KORANGI, KARACHI DISTRIBUTOR IN U.K. AZHAR ACADEMY LTD., at continenta (London) Ltd.. Cooks Road, London E-15 2pw This copy cannot be sold in the U.K., unless sold by or authorised by the 3 Meezan Bank’s Guide to Islamic Banking TABLE OF CONTENTS Preface 7 SECTION I INTRODUCTION TO ISLAMIC ECONOMIC SYSTEM 1 2 3 Chapter 1: Chapter 2: Chapter 3: The Islamic Economic System Factors of production in Islam The objectives of the distribution of wealth in Islam 11 19 29 SECTION II RIBA, ITS PROHIBITION & CLASSIFICATIONS 4 5 6 7 8 Chapter 4: Chapter 5: Chapter 6: Chapter 7: Chapter 8: Riba in the Qur'an Riba in Hadith Riba and its types Commercial interest and usury Simple and compound interest 34 36 42 53 62 SECTION III ISLAMIC CONTRACT 9 10 11 12 Chapter 9: Chapter 10: Chapter 11: Chapter 12: Islamic contract Sale Valid Sale Five khiyars 66 68 70 77 SECTION IV ISLAMIC MODES OF FINANCING 13 Chapter 13: Musharakah 14 Chapter 14: Mudarabah 4 81 98 Meezan Bank’s Guide to Islamic Banking 15 16 17 18 19 20 21 Chapter 15: Chapter 16: Chapter 17: Chapter 18: Chapter 19: Chapter 20: Chapter 21: Diminishing Musharakah Murabaha Salam Istisna’ Istijrar...
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...The Importance of Islamic Accounting in Modern Era by: Chusnul Asfadillah Student of Airlangga University, Surabaya, Indonesia +62899 372 1772 Ines Nur Latifah Student of Airlangga University, Surabaya, Indonesia +62878 8432 3738 DR. Raditya Sukmana Lecturer of Airlangga University, Surabaya, Indonesia + 62 878 5421 6776 ABSTRACT Purpose – This paper aims to determine the importance of the Islamic Accounting in modern era. In particular, the paper analyzes the values of the Islamic principles in the accounting process that prevent the unexpected activity such as fraud, dishonest etc to appear in reality. Arthur Anderson case was a result of the fraudulent activities that lead to its termination. Certainly this kind of case is expecting not to be happened in the future. Design/methodology/approach – The paper adopts the descriptive analysis and elaboration of the important element of the Islamic principles used in the accounting process. Furthermore, this paper attempt to make clear distinction between values underlying the Islamic accounting and that of the conventional accounting. Findings – the comparison of those two systems leads to the conclusion that the value in Islam such as honest, fair, truth (which is important in the Islamic accounting process) has more meaning than the similar value of in the conventional accounting. Hold firmly the Islamic value obviously leads to the decrease fraudulent practices and other unexpected activities. Moreover, it increases the social...
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...CUSTOMER RELATIONSHIP MANAGEMENT Literature review: What is Customer Relationship Management (CRM)? Before we begin to examine other framework of the customer relationship management, we must first understand what we mean by customer relationship management. The modern day customer relationship management came into picture in 1960’s. The 4 Ps of the marketing i.e the product, price, promotion and place were found not so valuable in conducting the business when compared to the ongoing customer relationship management techniques. With the realization of this importance about the relationship marketing, in about two years after that, that is in 1980’s the relationship marketing was used extensively by the businesses, organizations and other service providers to maintain an ongoing, healthy relationship delivering high quality goods and services and achieving high satisfaction with their customers which in turn made their customer retention more easy for these businesses. In the mid of the 1990’s these customer relationship marketing was on full swing so a more automated system was developed to support the sales and the customer service techniques. This automated system made it easy for the customers to buy the product online in one click and get the detailed knowledge about the features of the products in the way they would have got if they would have gone manually at the shop to buy that product. This system was particularly developed for the customers, so as to allow...
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...Kyoto Bulletin of Islamic Area Studies, 1-2 (2007), pp. 38-53 Islamic Microfinance: A Missing Component in Islamic Banking Abdul Rahim ABDUL RAHMAN 1. Introduction Microfinance means “programme that extend small loans to very poor people for self employment projects that generate income in allowing them to take care of themselves and their families” (Microcredit Summit, 1997). The World Bank has recognized microfinance programme as an approach to address income inequalities and poverty. The microfinance scheme has been proven to be successful in many countries in addressing the problems of poverty. The World Bank has also declared 2005 as the year of microfinance with the aim to expand their poverty eradication campaign. The main aim of the paper is to assess the potentials of Islamic financing schemes for micro financing purposes. The paper argues that Islamic finance has an important role for furthering socio-economic development of the poor and small (micro) entrepreneurs without charging interest (read: riba’). Furthermore, Islamic financing schemes have moral and ethical attributes that can effectively motivate micro entrepreneurs to thrive. The paper also argues that there is a nexus between Islamic banking and microfinance as many elements of microfinance could be considered consistent with the broader goals of Islamic banking. The paper, first, introduces the concepts of microfinance, and presents a case for Islamic microfinance to become one of the components of Islamic...
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...regulatory agencies and interest groups in existence which had been aggressively promoting the idea of an effective audit committee in all public listed companies. Yet, the absence of audit committee in a private company might be the cause for unstoppable practices of fraud. Therefore, the objective of this study is to determine whether the new theory of this formation of audit committee in a private company, can really help to eliminate or at least minimize the fraud. To achieve this goal, the study will conduct a survey based on questionnaires that will be distributed to the top management of a private companies, charted accountant i.e auditors and lecturers of audit course. The findings will be used to support the theory of this research. In the article, Albrecht (2008) declared, “the pressure may be the need to make earnings look better to meet debt covenants” (p. 22). It was true because the profit indicates the performance of a company and so creative accounting might be used to engineer the financial statement to have the so called profitable company. Basically, there are two types of fraud which...
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...Accounting scandals such as Enron, Worldcom, and Tyco have destroyed major corporations and has severely shaken our confidence in business ethics and overall morals. A verse that comes to mind when you think about how these executives in those corporations have taken advantage of their employees, creditors, suppliers and other corporations in order to make extra profits and bigger bonuses is found in the book of Proverbs. According to the word of God in the New American Standard Bible (1995), “He who oppresses the poor to make more for himself or gives to the rich, will only come to poverty” (Pr 22:16). The book of Proverbs does not leave its readers wondering as to its purpose. At the very onset we are clearly told the author’s intention. Proverbs 1:2-6 tells us that the purpose of these proverbs is to teach people wisdom and discipline and to help them understand wise sayings. Through these proverbs, people will receive instructions in discipline, good conduct, and doing what is right, just, and fair. The book of Proverbs is simply about godly wisdom, how to obtain it, and how to use it in everyday living. This wisdom assumes that there is a right way and a wrong way to live. It gives direction to our lives and keeps us in step with the fabric of life that God has created (NASB, 1995). Proverbs 22:16 shows that we will seek others to satisfy our wants. This reliance on others usually goes past getting a helping hand or charity and turns to fulfilling our...
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...Middle-East Journal of Scientific Research 13 (Research in Contemporary Islamic Finance and Wealth Management): 98-102, 2013; ISSN 1990-9233 © IDOSI Publications, 2013 DOI: 10.5829/idosi.mejsr.2013.13.1888 The Concept and Challenges of Islamic Pawn Broking (Ar-Rahnu) 1 S. Hisham, 1S. Abdul Shukor, 1A.B. Ummi Salwa and 2Kamaruzaman Jusoff 1 Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, 71800 Bandar Baru Nilai, Negeri Sembilan, Malaysia 2 Department of Forest Production, Faculty of Forestry, Universiti Putra Malaysia, 43400 UPM Serdang, Selangor, Malaysia Abstract: The introduction of Islamic pawn broking (Ar-Rahnu) in Malaysia is seen as a new micro credit instrument. This paper aims to provide a review on Ar-Rahnu’s concept and challenges faced by Islamic pawn shops in Malaysia. The study employs library and archive research to achieve the objectives of the paper. Islamic pawn broking consists of four basic concepts namely Qardhul Hasan, Ar-Rahnu, Al-Wadi'ah and Al-Ujrah. The Islamic pawn broking have several advantages over conventional pawn broking because it provides a cheaper way to obtain financing and is free from interest. In addition, assets pawned are guaranteed to be kept safely and there is a fair practice in auctioning and bidding. In addition, Ar-Rahnu also helps finance educational needs and provides capital to small businesses and entrepreneurs. It implies that this instrument will help the community to increase economic capability...
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...Bhagavad Gita : A Motivational Management Book by M.P. Bhattathiri, Retired Chief Technical Examiner, to The Govt. of Kerala. Table of Contents Abstract Introduction Management guidelines from the Bhagavad Gita Old truths in a new context The source of the problem Utilisation of available resources Work commitment Motivation – self and self-transcendence Work culture Work results Manager's mental health Management needs those who practice what they preach In conclusion A note on the word "yoga". Abstract One of the greatest contributions of India to the world is Holy Gita which is considered to be one of the first revelations from God. The spiritual philosophy and management lessons in this holy book were brought in to light of the world by many great Indian saint's effort and they call the Bhagavad-Gita the essence of Vedic Literature and a complete guide to practical life. It provides "all that is needed to raise the consciousness of man to the highest possible level." Maharishi reveals the deep, universal truths of life that speak to the needs and aspirations of everyone. Your followers in your establishment are continuing the mission by keeping this lantern burning always knowing the wishes of the modern generations. Arjuna got mentally depressed when he saw his relatives with whom he has to fight.( Mental health has become a major international public health concern now). To motivate him the Bhagavad-Gita is preached in the battle...
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...International Journal of Business and Social Science Vol. 2 No. 2; February 2011 Differences and Similarities in Islamic and Conventional Banking Muhammad Hanif Assistant Professor, National University of Computer & Emerging Sciences, Islamabad PhD-Finance Scholar at International Islamic University, Islamabad, Pakistan E-mail: muhammad.hanif@nu.edu.pk Abstract Islamic Banking is growing at a rapid speed and has showed unprecedented growth and expansion in last two decades in spite of mismatching of existing financial framework and business practices. By the end of 2008 volume of Islamic banking has reached to US $ 951 Billion with operation in more than 50 countries. Middle East is the centre of Islamic banking with contribution of approximately 80% while 20% share is contributed by rest of the world. In Pakistan Islamic banking is at infant stage although last 6 years growth is marvelous. Islamic banking has grown at an average annual rate of 76% in the last six and half years (12/03 - 06/10) in Pakistan. Although Islamic banking faces multi challenges however three of them are very vital for its existence. First is Sharia compliance in its operations in an environment which is dominated by interest based practices even in Muslim societies. Second is perception of financial industry practitioners about its performance whether the system is able to serve the total needs of trade and industry. Third is the perception of a large majority of Muslims whether existing practice...
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...INTRODUCTION 1: PREFACE. All praise be to Allah. We praise Him and seek His help, forgiveness and guidance. We seek refuge with Allah from the evil of our own selves and from our evil deeds. Whomsoever Allah guides, none can lead astray, and whosoever He sends astray none can guide. I bear witness that there is no God but Allah alone, with no partner or associate, and I bear witness that Muhammad is His slave and messenger. The following study is conducted due to the presence of one important economic instrument which has different system of management hence to show the similarities and differences between these instruments. Islamic and conventional banks are all banks but having different system of managements, aspects, history, products and even acceptance according to laws. The research will discuss these aspects and more to make people aware of these instruments so as to remove the confusion on them and make them choose the best with the best reasons. This study will be divided in to three chapters. Chapter one will be all about Islamic and Conventional banks, theirs nature, history, products offered and many more. Chapter two will discuss and show the similarities and differences of these banks. Chapter three as the final chapter will discuss the case study of Islamic banks in Tanzania. I pray to Allah to make this study be the sources of awareness about these banks especially in Tanzania where by people haven’t got exactly meaning and differences of these banks...
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...inbuilt accountability mechanism. Generally the accounting should be able to perform roles like keeping safe custody of interests, certifying true and fair view of business, enabling accountability and providing reliable information for successful decision making to all the stakeholders. In this context there are three main issues with respect to present system of setting accounting standards. These are undue pressures of certain groups in setting these standards, no role of owners in setting these standards, and flexibility/discretion in applying these standards which may lead to subjectivity. These may results in incorrect valuation of business transactions, increasing management discretion which in return will increase corporate governance issues including incorrect financial reporting, earning management and limiting decision making ability of the stakeholders. In order to overcome to this situation there is an urgent need to revamp the accounting theory in such a way that when it is put into practice it performs its due role as being, discussed here. The best way to correct this situation is to develop a new accounting theory based on Divine guidance. In this background, the Islamic principles of “Amanah” (Custody) (Amer2007), “Shahadat” (Testimony), (Amer, 2008)...
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... * British American Tobacco Malaysia manufactures and markets high quality tobacco products designed to meet diverse consumer preferences. Their portfolio includes well-established international names such as Dunhill, Kent and Pall Mall.Q1. Explain what is CSR * Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. * Kilcullen corporatn and Kooistra (1999, p.158) defined CSR as ‘the degree of moral obligation that may be ascribed to corporations beyond simple obedience to the laws of the state. * However, Maignan and Ferrell (2004) trace the evolution of perspectives on CSR from its emergence in the 1950s as 1. Social Obligation 2. Stakeholder Obligation * CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives as mentioned in Triple-Bottom-Line- Approach, while at the same time addressing the expectations of shareholders and stakeholders. * In this sense it is important to draw a distinction between CSR, which can be a strategic business management concept, and charity, sponsorships or philanthropy. Even though the latter can also make a valuable contribution to poverty reduction, will directly enhance the reputation of a...
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...World Journal of Social Sciences Vol. 1. No. 3. July 2011. Pp. 71-81 Marketing: An Islamic Perspective Md. Mahabub Alom* and Md. Shariful Haque** The purpose of this paper is to formulate and develop a marketing definition and its framework from Islamic perspective. In present business world, market and globalization are becoming the first truly world creed which binds all corners of the globe into a world-view and set of values. Here marketing practices are playing a vital role in raising the standards of business conducts worldwide. But the roots of it are secularism, valueneutral materialism, Social-Darwinism, Utilitarianism, and ‘rational economic man’ oriented. The spirits of these isms is selfishness, persuasion of profit, and want maximization. But in contrast, Islamic world-view comprises religious values, cultural values, and universal values which can be accepted and respected universally and can visualize a consumer oriented marketing culture which can ensure a balanced synthesis of both the material and the spiritual dimensions of life which emphasize to maximize the welfare of the world and the world hereafter and can establish fraternity and socio economic justice. This descriptive study will attempt to provide a brief review of conventional marketing literature at the same time it will formulate and develop a definition of Islamic Marketing and its framework based on The Holy Quran, ×adÊth and Islamic Literature. Field of Research: Marketing ...
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...no any full-fledged Islamic bank currently working in this country. Reserve Bank of India and other legal institutions of India are not issuing license to banks to work as per the principles of Islamic banking. Necessary measures are, however, being taken by India Government for the same. The present study is taken to explain how Islamic banking is better for India and weather it is possible to integrate Islamic banking to current financial system. It also explains how Islamic bank can commence in India by suggesting necessary measure for the same 1 INTRODUCTION Islamic banking has been defined as banking in consonance with the ethos and value system of Islam and governed, in addition to the conventional good governance and risk management rules, by the principles laid down by Islamic Shariah. Interest free banking is a narrow concept denoting a number of banking instruments or operations, which avoid interest. Islamic banking, the more general term is expected not only to avoid interest-based transactions, prohibited in the Islamic Shariah, but also to avoid unethical practices and participate actively in achieving the goals and objectives of an Islamic economy. Islamic Shariah prohibits ‘interest’ but it does not prohibit all gains on capital. It is only the increase stipulated or sought over the principal of a loan or debt that is prohibited. Islamic principles simply require that performance of capital should also be considered while...
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