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Islamic Finance

Book Description

Though small in comparison with conventional finance, Islamic finance is at the threshold of serious expansion, growing at between 15–20 per cent a year. Yet the wealth potential of Islamic finance is far from being its most attractive feature. What is most compelling about Islamic finance are its ethical principles and strong corporate governance based on Shariah law.This book explains how conventional financial products work—from mortgages and leases to trade finance and insurance—before delving into their Islamic versions.

Table of Contents

  1. Cover Page
  2. Copyright
  3. Title Page
  4. Contents
  5. Preface
  6. Acknowledgements
  7. Foreword
  8. Chapter 01: Why Islamic Finance?
    1. WHAT IS ISLAMIC FINANCE?
    2. DEVELOPMENT OF A MODERNISLAMIC FINANCE FRAMEWORK
    3. ISLAMIC FINANCEAFTER THE SUBPRIME CRISIS
    4. CONCLUSION
  9. Chapter 02: Understanding Islam and Muslims
    1. WHAT IS ISLAM?
    2. HALAL VERSUS HARAM
    3. ISLAM AND MUSLIM LILFEARE DEEPLY INTERTWINED
    4. SHARIAH— REGULATINGEVERYDAY LIFE AND ACTIVITIES
    5. CONCLUSION
  10. Chapter 03: Basic Islamic Finance Principles
    1. WHAT ARE THE GOALSOF AN ISLAMIC ECONOMIC SYSTEM?
    2. FUNDAMENTAL PROHIBITIONSOF ISLAMIC FINANCE
    3. PROHIBITION AGAINST INTEREST (RIBA)
    4. PROHIBITION AGAINSTUNCERTAINTY (GHARAR)
    5. PROHIBITION AGAINSTGAMBLING (MAYSIR)
    6. CONCLUSION
  11. Chapter 04: An Overview of Islamic Finance Contracts
    1. ACONTRACT ISLEGALLY ENFORCEABLE
    2. KEY FEATURES OFISLAMIC FINANCE CONTRACTS
    3. COMMONLY USEDISLAMIC FINANCE CONTRACTS
    4. CATEGORIES OF ISLAMIC CONTRACTS
    5. CONCLUSION
  12. Chapter 05: Building an Islamic Finance Framework
    1. AN OVERVIEW OF A FINANCIAL INFRASTRUCTURE
    2. ISLAMIFYING ACONVENTIONAL INFRASTRUCTURE
    3. INTERNATIONAL ISLAMICFINANCIAL ORGANISATIONS
    4. OTHER INTERNATIONAL BODIES
    5. CONCLUSION
  13. Chapter 06: How Financial Markets Work
    1. AN OVERVIEW OF A FINANCIAL MARKET
    2. WHY BUSINESSES CREATEFINANCIAL INSTRUMENTS
    3. SEEKING FUNDS WITH AN IPO
    4. WHAT FINANCIAL INTERMEDIARIES DO
    5. CONSISTENT FEATURES OFISLAMIC FINANCIAL INSTITUTIONS
    6. CONCLUSION
  14. Chapter 07: Saving and Spending
    1. CONVENTIONAL DEPOSIT ACCOUNTS
    2. ISLAMIC Deposit ACCOUNTS
    3. Savings Accounts Based on WYD
    4. ISLAMIC Checking ACCOUNTS
    5. ISLAMIC GENERAL INVESTMENT ACCOUNTS
    6. COMPARING ISLAMICAND C CONVENTIONAL DEPOSITS
    7. ISLAMIC CREDIT CARDS
    8. SOME PRODUCT ISSUES
    9. CONCLUSION
  15. Chapter 08: Financing (Based on Debt)
    1. AN OVERVIEW OF ISLAMIC FINANCING
    2. HOME PURCHASE WITHA CONVENTIONAL LOAN
    3. HOME PURCHASE WITH AN ISLAMIC LOAN (USING BBA)
    4. WORKING CAPITAL WITH AN ISLAMIC LOAN (USING MURABAHAH)
    5. DIFFRENCES BETWEENBBA AND MURABAHAH
    6. AN INTEREST-BEARINGSYSTEM IN DISGUISE?
    7. CONCLUSION
  16. Chapter 09: Financing (Based on Leasing)
    1. HOW IS LEASING DIFFERENTFROM RENTING AND BUYING?
    2. CONVENTIONAL LEASING
    3. AN OVERVIEW OFISLAMIC LEASING (IJARAH)
    4. TYPES OF ISLAMIC LEASES
    5. CLOSE-UP ONISAMIC LEASE FEATURES
    6. CONCLUSION
  17. Chapter 10: Other Islamic Financing Methods
    1. EQUITY-BASED FINANCING METHODS
    2. OTHER DEBT-BASED METHODS
    3. CONCLUSION
  18. Chapter 11: Insurance
    1. HOW CONVENTIONAL INSURANCE WORKS
    2. ISLAMIC OBJECTIONS AGAINST CONVENTIONAL INSURANCE
    3. TAKAFUL—THE ISLAMIC INSURANCE ALTERNATIVE
    4. HOW TAKAFUL PRODUCTS ARE STRUCTURED
    5. SOME PRODUCT ISSUES AND CONTROVERSIES
    6. CONCLUSION
  19. Chapter 12: Investing
    1. WHAT IS YOUR OBJECTIVE FOR INVESTING?
    2. STOCKS, BONDS AND UNIT TRUSTS
    3. MANAGING RISK—THE 3-BASKET SYSTEM
    4. INTRODUCING ISLAMIC INVESTING
    5. ISLAMIC FUND STRUCTURES
    6. EXAMINING THE AMANA GROWTH FUND
    7. THE ISLAMIC FUND INDUSTRY
    8. ISLAMIC ALTERNATIVE INVESTMENTS
    9. CONCLUSION
  20. Chapter 13: Trade Financing
    1. WHAT IS TRADE FINANCE?
    2. HOW INTERNATIONALPAYMENTS ARE MADE
    3. MANAGING FOREIGN EXCHANGE RISK
    4. CONCLUSION
  21. Chapter 14: Prospects: Ordinary or Extraordinary
    1. IS ISLAMIC FINANCE LESS RISKYTHAN CONVENTIONAL FINANCE?
    2. PEERING INTO THE FUTURE
    3. FOR THE BENEFIT OF ALL
    4. FINAL WORDS
  22. Glossary Of Terms Used
    1. TERMS RELATED TO ISLAM
    2. Dow Jones Industrial Average (DJIA) [See Chapter 12]
    3. Islamic Finance [See Chapter 1]
    4. Islamic Development Bank (IDB) [See Chapters 1 and 5]
    5. TERMS RELATED TO OTHERINSTITUTIONS AND GROUPS
    6. INTRODUCTION TO THE ARABIC LANGUAGE
  23. Index
  24. Selected References
    1. SELECTED REFERENCES