You are previewing Business Knowledge for IT in Islamic Finance: A Complete Handbook for IT Professionals.
O'Reilly logo
Business Knowledge for IT in Islamic Finance: A Complete Handbook for IT Professionals

Book Description

Industry experts are predicting that the growth of the Islamic Finance industry will exceed 20 per cent per annum. Other experts believe that in the future, the Islamic Finance industry could become a major competitor to the conventional finance industry. Islamic Finance is expected spread beyond Muslim countries - as seen in Europe where it has already made considerable headway in the UK, Germany and Switzerland. "Business Knowledge for IT in Islamic Finance" deals with the convergence of business and IT in the Islamic finance industry and is designed to provide the platform for IT professionals to exploit the future demand for talent in this industry.The chapters in this book contain information on the fundamentals of Islamic finance, the features that sets the Islamic finance industry apart form the mainstream finance industry, a number of the prohibitions and business ethics in Islamic Finance , overview of business transactions and the legal process underpinning these transactions; major players in the Islamic Finance world; and, major systems from notable vendors used for lending, financing , capital markets transactions and insurance in the Islamic finance space.

Table of Contents

  1. Copyright
  2. Preface
    1. How does this apply to IT professionals?
  3. Acknowledgements
  4. Introduction
  5. 1. Overview of Islamic Finance
    1. Introduction
    2. Definition
    3. Main Types of Islamic Finance
    4. History of Islamic Finance
    5. Islamic Economics and Finance – Key Concepts
    6. Relationship between Ethical Investment and Islamic Principles
    7. A Range of Islamic Financial Instruments
    8. Valid Gains on Investment
    9. What Differentiates Islamic Finance and Conventional Finance?
    10. Global Market for Islamic Finance
      1. Emerging Centres of Expertise
      2. Shari’ah-compliant Financial Services
        1. Banking
        2. Sukuk
        3. Islamic funds
        4. Takaful
  6. 2. Business Environment
    1. Introduction
    2. Environmental Factors
      1. Political and Legal
      2. Economic
      3. Socio-cultural
      4. Technological
    3. Country Analysis
    4. Profiles of Major Players
      1. Bahrain Islamic Bank
      2. Emirates Islamic Bank
      3. Dubai Islamic Bank
      4. Qatar Islamic Bank
      5. Al Hilal Islamic Bank
      6. Islamic Bank of Britain
      7. HSBC Amanah
    5. Regulators
      1. Islamic Financial Services Board (IFSB)
      2. Accounting and Auditing Organisation for Islamic Financial Institutions
      3. Financial Services Authority
    6. Data Providers
      1. Islamic Finance Information Service
      2. Failaka Advisors
      3. CPI Financial
      4. Standard and Poor’s
    7. Indices
      1. Dow Jones Islamic Index (DJII)
      2. S&P Shari’ah Indices
      3. FTSE SGX Shari’ah Index Series
    8. Ratings
      1. Standard and Poor’s Stability Ratings for Islamic Banks offering Profit-sharing Investment Accounts
      2. Stability Rating Scales and Definitions
        1. Rating level
        2. Outlook
      3. Definition of Stability Ratings
  7. 3. Islamic Banking
    1. Introduction
    2. What is Islamic Banking?
    3. The Shari’ah Board
    4. Comparison of Islamic Banking and Conventional Banking
    5. How do Islamic Banks work?
    6. Overview of Key Markets
      1. The Middle East
      2. Southeast Asia
      3. Global Financial Centres
    7. Core Operations of Islamic Banks
      1. Fund Mobilisation
      2. Fund Utilisation
        1. Sharing modes
        2. Sales modes
        3. Leasing modes
    8. Islam Banking Products
    9. The Deposit Side of Islamic Banking
      1. Current Deposits
      2. Savings Deposits/Investment Deposits/Term Deposits
    10. Asset-side Instruments
      1. Financing Modes for Trade, Agriculture and Industry
      2. Household, Personal Finance, Consumer Banking
      3. Foreign Exchange Operations
    11. Islamic Investment Banking
    12. Islamic Financial Markets and Instruments
      1. Islamic Funds
        1. Fund management via equity funds
        2. Criteria for screening and purifying equity stocks
      2. Investment Sukuk
      3. Trading in Financial Instruments
      4. FX Market in the Islamic Structure
      5. Derivatives and Islamic Finance
  8. 4. Islamic Insurance
    1. Introduction
    2. Definitions of Takaful
    3. Brief History of Takaful
    4. Basic Facts about Takaful
    5. Main Drivers of Takaful
    6. Basic Elements of Takaful
    7. Differences between Insurance and Takaful
    8. Key Features of Takaful
    9. Takaful Operating Models
      1. Mudarabah Model
      2. Wakala Model
      3. Hybrid Model
    10. Retakaful
  9. 5. Ijarah – Islamic Leasing
    1. Introduction
    2. Definitions of Ijarah
    3. Comparison between Ijarah and Murabaha Financing
    4. Basic Rules of Leasing
    5. Reasons for choosing Ijarah as Opposed to Murabaha
    6. Types of Ijarah Arrangements
      1. Simple Ijarah (Operating Lease)
        1. Mechanism for the simplest form of Ijarah
      2. Ijarah-Thumma-al-Bay’ (Lease-sale) or (Financial Lease)
      3. Ijarah with Musharakah or Mudarabah
      4. Sale and lease-back
    7. Implementation Issues in Ijarah Financing
      1. Risk and Return
      2. Forward Ijarah
        1. Fixed and Floating Rates
      3. Default Risk and its Mitigation
      4. Nature of Asset
      5. Asset Securitisation
      6. Termination of Ijarah
  10. 6. Islamic Securitisation
    1. Introduction
    2. Definition of Islamic Securitisation
    3. The Case for Securitisation in Islamic Finance
      1. How Does This Apply to Islamic Financial Institutions?
    4. Adapting the Principles of Islamic Finance to Securitisation
    5. The Capital Markets in an Islamic Framework
    6. Sukuk and Securitisation
    7. Sukuk Compared to Bonds
    8. Categories of Sukuk
    9. Participants in Sukuk Issue or Securitisation
    10. The Relations between Parties Involved
    11. Tradable and Non-tradable Sukuk
    12. The Importance of Sukuk
    13. Types of Sukuk
  11. 7. Trends
    1. Introduction
    2. Growth of Syndicated Islamic Finance
      1. What Exactly is Syndicated Finance all About?
      2. Overview of the Syndication Process
      3. Prospects for the Syndicated Islamic Finance Markets
      4. Is there an Impact from the Credit Crunch?
      5. The Future
    3. Islamic Project Financing
      1. Definition of Project Financing
    4. Impact of Basel II on Islamic Finance
      1. What exactly is Basel II?
      2. Islamic Banking: Risk Management and Basel II
        1. Market risk
        2. Credit risk
        3. Operational risk
    5. Launch of Islamic ETFs
      1. What are I-ETFs?
      2. What Constitutes Shari’ah Compliance?
      3. Benefits of I-ETFs
      4. Types of I-ETFs
      5. How do Islamic ETFs differ from Conventional ETFs?
      6. Brief Overview of the Global Market
      7. The Future
    6. Growth of Islamic Private Equity
      1. Private equity
      2. Venture capital
      3. Muamalat and Ibadah
      4. Basic Requirements
        1. Underlying asset
        2. Structure
    7. Growth of Islamic Private Banking and Wealth Management
  12. 8. Financing Practices
    1. Introduction
    2. Financing Areas
    3. Trade Financing
      1. Murabaha
        1. Basic parameters
      2. Salam Contracts
        1. Broad parameters
        2. Specific matters
        3. Mode of financing
        4. Is the Islamic financier permitted to sell onward?
        5. Immediate payment of purchase price
        6. Specificity of the goods
        7. Delivery to be after the date of the contract
        8. Existence of the goods
        9. Import financing
        10. Export financing
    4. Cards
      1. Shari’ah Issues with Credit Cards
    5. Working Capital Finance
    6. Liquidity Management
      1. Definition of Liquidity Management
    7. Foreign Exchange Dealings
    8. Mortgages
      1. Ijarah Mortgages
      2. Musharakah Mortgages
      3. Murabaha Mortgages
  13. 9. Common Systems Used in Islamic Banking and Finance
    1. Introduction
    2. IT Situation in Islamic Banks
      1. Challenges of Islamic Banking Software
      2. The Evolving IT Application Architecture
    3. Profile of Systems
      1. Core Vendors
    4. Profiles of Systems
      1. System: Misys Equation Islamic Banking
        1. Vendor: Misys
        2. Core Management System
        3. Customer Management
        4. Product Management
        5. Financial Management
        6. Customer Documentation
        7. Liability Products
        8. Al Wadiah Accounts
        9. Investment Deposits
      2. System: The OLYMPIC Banking System & Islamic Finance
        1. Vendor: ERI Banking Software Limited
        2. Benefits of the System
      3. System: OMNIEnterprise Islamic Banking Solution
        1. Vendor: Infrasoft Technologies
    5. List of Other Systems
  14. 10. IT Projects
    1. Introduction
    2. Approach to Successful Project Management
      1. The Likely Reasons for Failure of Projects
    3. Increasing the Probability of Success in a Project
      1. 1. Clarity about Objectives and Drivers
        1. Realisation of business benefits
        2. Reduction of costs
        3. Achieving desired release period
        4. Ease of implementation and associated risk
      2. 2. In-depth Analysis and Prioritisation of Drivers
      3. 3. Assigning Weighting to Drivers
        1. 4. Identification of Various Implementation Options
        2. Single release
        3. Multiple ‘incremental’ release
      4. 5. Allocation of a Score and Selection of the most Appropriate Driver
    4. The Challenges for Islamic Financial Institutions When Implementing Banking Systems
    5. Considerations for Risk Management Systems Design
      1. Background to Risk in Islamic Banks
      2. Designing Considerations for Risk Management Software
  15. 11. Commonly Used Terminology
    1. Introduction
    2. List of Terms
  16. 12. The Future
    1. The Future: What does it hold for IT and Business in Islamic Finance?
    2. Analysis of the Prospects for Survival of Islamic Banking and Finance
      1. Economic Viability
      2. Stability
      3. Confidence of Depositors and Savers
    3. Islamic Banks will Morph into Pure Financial Institutions
    4. Standardisation of Islamic Financial Products
    5. Evolving Structure of Islamic Finance Industry
    6. Increased Role of Technology
    7. Post Credit-crunch Future of Islamic Finance
    8. Conclusion
  17. Appendix
    1. Bibliography
  18. About the Bizle Brand
  19. About the Bizle Professional Series