General Issues and Challenges of IFS

Islamic economics and the Islamic financial system operate and function in a way similar to the conventional system. Consequently, the Islamic financial industry faces relatively similar challenges to those faced by the conventional system. Due to their distinct features encompassed in the teachings of the Shari’ah, the ideal Islamic economic and financial systems are faced with additional challenges and opportunities. In theory, the Islamic financial system is inclined towards equity-based financial instruments that are related to the real economy. In reality, however, the Islamic finance industry is dominated by debt-based financial instruments that, more often than not, mirror conventional ones. For further details see: ISRA, Islamic Financial System: Principles and Operations.

Global Crisis

Clarifications of Terminologies

Conventional Financial System

Tawarruq With a Conventional Bank
Can an Islamic Bank Ask a Client to Provide a Conventional Bank as a Guarantor?
Issuing Kafalah In Relation To Conventional Banks
Issuing LGs For Soft Loans
LGs From Conventional Banks for Project Finance
Should an Islamic Bank Offer a Guarantee for a Contractor Doing a Job for a Riba Bank?
A Correspondent Bank Wants to Charge the Islamic Bank a Fee for Its Part in Issuing a Letter of Guarantee. Can the Islamic Bank Tell It to Charge the Customer?
Can a Conventional Bank Deposit be Used as Pawn for the Benefit of Islamic Banks
Can an Islamic Bank Let Companies That Deal With Usury Have Current Or Investment Accounts?
Entering Into A Construction Contract With A Conventional Bank
Giving Hibah As Compensation For Delayed Payments
Pawning For The Benefit Of A Conventional Bank
Resolution No: 13 (1/3)[1]: Concerning The Islamic Development Bank’s inquiries
Syndicated Financing Between Islamic And Conventional Institutions
Can a Muslim Contractor Build a Building for a Conventional Bank?
Can an Islamic Bank Issue a Guarantee for a Contractor Doing Work for a Conventional Bank?
Can an Islamic Bank Partner with a Conventional Bank in a Lawful Project?
Is It Allowed to Rent a Building to Employees of an Interest-Based Bank?
Is It Allowed to Rent a Property to an Interest-Based Bank?
Resolution No. 124: The impermissibility of paying the interest amounts accumulated from correspondent bank accounts to beneficiaries other than the poor and Islamic charities
Resolution No. 150: Paying or receiving interest from correspondent banks
تحويل رهن عقاري لفائدة بنك تقليدي
إيداع المسلم أمواله في البنوك التي تتعامل بالفائدة
الفوائد المصرفية التي يضطر البنك لإيداعها في المصارف الربوية
دفع الأرباح المستحقة للودائع بالعملات الصعبة
أرباح الودائع بالعملة الصعبة
LG from a Conventional Bank as Security in Murabahah
What Is to Be Done if the Supplier Is Unable to Deliver Some of the Sold Goods?
Trading In The Shares Of Shari’ah-Compliant Companies That Are Involved In Riba-Based Transactions With Conventional Banks
Islamic Financing Insured By Conventional Insurance
Can an Islamic Bank Take for Security Stocks Issued to a Conventional Bank as Security for an Interest-Based Loan?
Can an Islamic Bank Take a Deposit in a Conventional Bank as Security for a Loan?
Can an Islamic Bank Allow a Shareholder to Mortgage Its Shares as Security for an Interest-Best Loan?
May an Islamic Bank Deposit Money with a Commercial Bank without Interest?
May an Islamic Bank Deposit Money with a Foreign Bank and Give the Interest in Charity?
Is the Seller Responsible if the Buyer Sells the Purchased Good to a Sinner?
Can an Islamic Bank Buy Property in a Non-Muslim Country if Some Tenants Have Shari‘ah Non-Compliant Businesses?
How Can a Conventional Bank Be Converted into an Islamic Bank?
Is It Allowed to Lease Real Estate to Insurance Companies That Offer All Kinds of Insurance?
Can an Islamic Bank Make Regular Monthly Transfers from an Account holder’s Account to Pay a Riba-Based Loan?
Can an Islamic Bank Accept Assignment of Rights Requested by Usurious Banks of Their Customers?
Is It Allowed for an Islamic Bank to Place an Interest-Bearing Deposit in the Central Bank if the Law Requires It?
Is It Allowed to Buy the Shares of Companies Whose Activities Are Lawful but Have Usurious Loans?
Issues in Installing an Electronic Debit Machine
Is It Allowed to Issue a Guarantee for the Benefit of a Conventional Bank?
Is It Allowed to Accept Gifts from Usurious Institutions?
Resolution No. 133 (14/7): The Problem of Arrears in Islamic Financial Institutions

Procrastinating Debtor

Claiming Legal Expenses From The Customers
Giving Hibah As Compensation For Delayed Payments
Ta'widh On Judgement Debt
Using Current Account Deposit as Pawn
A Discount for Accelerated Payment in a Delayed Payment Contract
Can a Bank Stipulate Up-Front That, if a Customer Misses a Payment, He Must Pay Two Instalments?
Can a Financial Penalty Be Levied on Late Payment of a Loan?
Can a Rich Debtor Who Delays Payment Be Made to Pay the Legal Costs of Recovering the Debt?
Can an Islamic Bank Charge a Customer for Writing a Bounced Check?
Resolution No. 109 (3/12): "Penalty Provision"
Increasing the Profit Rate on Subsequent Murabahah Deals Due to Late Payments in Earlier Deals
قرار رقم 186 (1/20) بشأن أحكام الإعسار والإفلاس في الشريعة الإسلامية
التحكيم الوارد بالعقود
صيغة الشرط الذي يضمن بالعقود لإلزام العميل بالزيادة التي تضاف لحساب مخصص الديون المتعثرة
إنفاق حصيلة الإيرادات الناتجة من الفوائد المحرمة وغرامات المدينين المعسرين المماطلين
غرامة التأخير للعملاء في حالة المماطلة في سداد مبلغ الاعتماد
فرض عقوبات في حالة مماطلة المرابح
فرض غرامة تأخير على العميل الذي لا يفي بالتزاماته
غرامة التأخير والمماطلة في السداد
التأمين على الديون والحياة
Imposition Of Ta'widh In Islamic Finance
Can a Penalty Clause for Late Payment Be Added to an Islamic Banking Contract?
Is it Lawful to Financially Penalize a Rich Debtor Who Delays Payment?
What Can an Islamic Bank Do if a Debtor Who Can Afford to Pay Delays Payment?
What if an Unscrupulous Debtor Delays Payment to an Islamic Bank because It Doesn’t Charge Interest?
Resolution No. 1 (1/2): Concerning the Zakah of Debts
Can a Bank Put a Clause in an Installment Payment Contract Requiring the Buyer to Pay a Penalty for Late Payment?
Is it Allowed to Stipulate a Penalty Clause against the Defaulting Lessee in a Lease Contract?

Financial Inclusion

Social Finance

Islamic Fintech


Peer-to-Peer (P2P) Financing

Islamic Financial System ©



I-FIKR Sponsors