Islamic Financial System ©

The structure of the Islamic financial system is similar to the structure of the conventional financial system. In other words, the Islamic financial system comprises financial institutions (Islamic banks, Islamic insurance (takaful) companies, Islamic mutual funds and other finance companies) and markets that also bring lenders and borrowers together. Likewise, Islamic financial institutions (IFIs) and markets facilitate the channelling of investable funds from surplus fund units (SFUs) to deficit fund units (DFUs). However, under the Islamic financial system, Islamic financial markets, institutions and instruments operate in line with Shari'ah rules and principles. For further details see: ISRA, Islamic Financial System; Principles and Operations.

Shari'ah Frameworks & Principles

Shari’ah principles are the foundation of the practice of Islamic finance through the observance of the tenets, conditions and principles espoused by the Shari’ah. For further details see: ISRA, Islamic Financial System; Principles and Operations.

Resolution No. 53/4/6: Possession: its different forms, especially its modern forms and their rules
Financing to a Party Who Explicitly Performs Non-Shari`ah Compliant Activities
Is it allowed for an Islamic Bank to invest a portion of its capital in buying the stock of the companies that are not aimed at dealing with interest?
What’s the Shariah Opinion Regarding the Frameworks for the Conversion of Debt into Shares and the Islamization of a Targeted Company?
Is It Allowed for KFH to Invest in Companies Whose haram Elements Are Less Than Those Mentioned Percentages Because the haram Has Become so Widespread?
Is It Allowed to Purchase Companies That Provide Support Services to Customers That Are Involved in Businesses That Are Not Shariah Compliant?
Is It Allowed to Establish a Portfolio to Purchase Companies That Provide Shariah Compliant Support Services Providing That Some of Them Provide Haram Services?
What Is the Ruling on Placing a Picture of a Man Handing Out a Bank Card or a Brochure in the Branch Offices?
Is It Allowed to Install KFH’s Credit Card Machine in a Trader’s Shop That Sells Cigarettes and Other Related Accessories?
What is the Ruling on Installing a Satellite Dish for a Residential Complex Based on Residents’ Request?
RESOLUTION No. 9 (9/2): INSURANCE AND REINSURANCE
RESOLUTION No. 10 (10/2): TRANSACTIONS WITH BANKS DEALING WITH INTEREST AND TRANSACTIONS WITH ISLAMIC BANKS
Doubtful & Prohibited Commodities in Murabahah Transactions
Collusion to Return the Amount to the Client Minus a Specific Commission
المحافظ الاستثمارية لشركات التأجير المالي التقليدية
تمويل عقارات يزاول مستأجروها أنشطة محرمة

Literally, the word 'aqd (contract) is derived from the Arabic verb 'aqada which means to tie, to conclude or to ratify. Al-'aqd as a verbal noun means al-rabt which denotes tying or correlating. Muhammad Qadri Basha defines 'aqd technically as the connection of an offer (ijab) emanating from one of the two contracting parties with the acceptance (qabul) of the other party in such a way that constitutes an implication on the subject matter. As a result of this connection, both parties fall under obligation to one another. Muhammad Abu Zahran defines it as a connection between two sayings (of the two contracting parties) from which arises a legal ruling which is applicable to one party or both of them. It can be said that the above two definitions emphasise that 'aqd is made of a connection between the words of the offeror and the words of the offeree which thereafter creates legal consequences on the subject matter and constitutes contractual obligations binding upon the contracting parties.

Should an Islamic Bank Refuse to Open a Letter of Credit for a Buyer Who Is Planning to Resell the Purchased Commodity to the Government at a Huge Mark-up?
Is an Exporter’s Acknowledgement of the Opening of the LC Qabd? Can the Goods Then be Resold?
Who Bears the Loss in a Mudarabah Venture?
Hibah In Inter-Bank Mudharabah Investment Contract
Dual Promise in Commodity Murabaha
Sale And Buy-back Agreement (Repo)
Contract Of Sale And Currency Trading
Deposit And Financing Products Based On Tawarruq
Can a Fee Be Charged to Transfer a Lease Agreement from One Tenant to Another?
Can a Tenant Cancel a Lease Agreement before Using the Usufruct?
A Promise to Buy or Sell Gold or Silver at a Future Date
Can the Bank Use Two Different Rates to Sell Foreign Currency?
Charging One Price for a Simple Sale of Foreign Currency and another Price for a Foreign Exchange plus Remittance
Forward Foreign Currency Transaction
Is the Exchange of Two Different Currencies Considered Like an Exchange of Gold for Gold?
Leasing an Asset to Someone Who May Use It for Unlawful Acts
Insurance Expenses Paid by Lessee
Who Bears the Expenses for Executing New Building Code Requirements Imposed after the Construction Contract Has Been Signed between the Subcontractor and the Bank?
Who Bears the Expenses for Inadvertent Mistakes in Administering a Building Contract?
Entry of the bank's real estate administration beside others into a tender offered by the bank for bidding
The conditional change in case works are not completed
Is It Permissible for KFH to Sell Goods Before Settling Their Invoice and Even Before They Reach KFH Providing That the Ownership of Goods is Recorded in KFH Name?
Is It Permissible to Oblige a Client to Buy a Car from KFH in Exchange for the Purchase of His Used Car by a Third Party?
Stipulating Conditions In An Agency Contract
Is It Permissible to Buy Photographic Equipment from a Company and Stipulate That the Company Should Take the Old Photographic Equipment That Is in Our Possession?
Is It Permissible to Buy Commodities by Cash from a Number of Commercial Firms And After Receiving Them Keep These Purchased Goods Separately in the Seller’s Warehouse?
Is It Allowed for KFH to Sell Gold to Its Customers After It Has Purchased It and Credited to the Owner’s Account?
Is It Permissible for KFH to Enter into a Contract with an Option Clause?
Is It Permissible for KFH to Enter into a Foreign Currency Contract with a Client Who Also Ordered KFH to Purchase Goods from a Foreign Seller and Sells them to Him on Deferred Basis?
Is It Permissible for KFH to Purchase Goods from an Exporter By Using the Commercial License of an Authorized Person Who Has Permitted KFH to Use His License?
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قرار رقم 140 (6/15) بشأن الاستثمار في الوقف وفي غلاته وريعه
Resolution No. 53/4/6: Possession: its different forms, especially its modern forms and their rules
RESOLUTION No. 46 (8/5): LIMITATION OF THE PROFIT MARGIN OF TRADERS

Islamic Financial Markets

Islamic banking refers to a system of banking activities that operates within the realms of Shari'ah teachings. For further details see: ISRA, Islamic Financial System; Principles and Operations.

Islamic banks which consist of their own capital and equity will also rely on two other main sources of funds. The first is transactional deposits which are mainly risk-free and provide no return. The second is the investment deposits which carry the risk of loss in capital for the investments made. There are a total of four main types of deposits. For further details see: ISRA, Islamic Financial System; Principles and Operations.

The uses of funds, namely, the types of financial instruments offered by the bank to generate revenues. The most common feature of any Islamic commercial bank involves two main sectors, namely, the personal or retail sector and the corporate or trade sector. For further details see: ISRA, Islamic Financial System; Principles and Operations.

Trade Financing: The financing of international trade. Trade finance includes such activities as lending, issuing letters of credit, factoring, export credit and insurance.

Wealth Management: A professional service which is the combination of financial/investment advice, accounting/tax services, and legal/estate planning for one fee.

An Islamic capital market, as is the case of a conventional capital market, constitutes an integral part of the Islamic financial system. In general, an Islamic capital market comprises two main components: the debt market and the equity market. They are indispensable for the efficient mobilisation of resources and their optimal allocation. For further details see: ISRA, Islamic Financial System; Principles and Operations.

What Would the Transactions of Global Stock Market Be Called?

Takaful is Verily, selling the asset on condition that its transfer of ownership to the buyer will not be done until after its (asset) value was paid in order to be the purpose from that is to not endorse transfer of ownership to the buyer until after the payment of the value, so this is permissible and there is nothing wrong in that (from the Shariah point of view). It is also Mutual guaranteeing through mutual support and shared responsibility whereby a group of people agree to jointly guarantee one another against a defined loss. Takaful is an alternative to contemporary insurance. Re-takaful is an agreement among takaful operators to contribute into a larger fund (re-takaful fund) which assumes the task of covering part of the risks encountered by the participating takaful operators.

قرار رقم: 200 (6/21) بشأن: الأحكام والضوابط الشرعية لأُسس التأمين التعاوني
قرار رقم 143 (1/16) بشأن زكاة الحسابات المقيدة وشركات التأمين الإسلامية والتأمينات النقدية ومكافآت نهاية الخدمة
Resolution No. 9 (9/2): Concerning Insurance And Reinsurance
Retakaful Business Model Based on Wakalah - Wakaf
Retakaful with Conventional Insurance and Reinsurance Company
Retakaful Service Fee as Income for Shareholders Fund
Provision of Reserve in Takaful Business
Murabaha - Standard (60)
Ta'widh On Judgement Debt
Any Link between the Insurance Settlement for Damaged Goods and the Seller’s Settlement with the Purchase Undertaker?
Overcompensation by the Insurance Company above the Actual Damage
The Purchase Undertaker Does Not Want the Intermediate Seller to Incur Added Expenses for Insurance against Certain Risks (1)
The Purchase Undertaker Does Not Want the Intermediate Seller to Incur Added Expenses for Insurance against Certain Risks (2)
The Purchase Undertaker Requests the Intermediate Seller to Pass on Insurance Compensation for Damaged Goods
عمولة شركات التأمين على السلع المبيعة مرابحة
استعمال العائد الذي يتلقاه بنك البركة من بنك الجزائر لتسديد حصة البنك في شركة ضمان الودائع المصرفية
بطاقة الائتمان الإسلامية وفقاً لصيغة القرض الحسن
عمولة شركات التأمين على السلع المبيعة مرابحة
إضافة الاستثمارات إلى الاحتياطي الأساسي
مسؤولية العميل عن التأمين في معاملات المشاركة
الجهة التي تتحمل تكاليف التأمين في المرابحة
التعامل مع شركات التأمين التقليدي
تحمل المشتري البضاعة المراد شراؤها بالمرابحة
قيام البنك عند تلف البضاعة المستوردة باستيفاء مبلغ من شركة التأمين يزيد عن المبلغ الذي دفعه البنك
تأمين البنك على أمواله وممتلكاته الخاصة
Insurance Premium
Hibah In The Takaful Industry
When the Customer Can Be Charged for Shipping and Insurance
An Insurance Company Pledges to Collect Debts and to Pay the Debts It Can’t Collect
Can a Credit Cardholder Refuse the Life Insurance Contract That Comes with It?
Transferring the Right to Benefit from Insurance to a Purchase Undertaker after the Sale
Islamic Financing Insured By Conventional Insurance
Can a Muslim Company Agree to a Non-Muslim Employee’s Demand for Comprehensive Life Insurance as a Condition of Employment?
Can a Buyer of Insurance Sell the Policy to a Third Party?
Is It Allowed To Require the Lessee To Get Comprehensive Insurance for the Car and Assign the Lessor as the Policy’s Beneficiary?
Is It Allowed to Buy Shares of a Conventional Insurance Company in Order to Convert It into a Cooperative Insurance Company?
Is it Allowed to Buy Shares In a Company that Make Insurance Life the Inventor-Partner?
What is the Fatwa Committee’s Opinion about the Entity Responsible for Repairing Rented Cars Damaged Due to Floods?
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RESOLUTION No. ( 59/10/6): THE FINANCIAL MARKETS
RESOLUTION No. 63/1/7: FINANCIAL MARKETS

Regulation, Supervision and Governance

In some countries, Islamic finance is at an advanced stage of development, while in others, more meaningful progress is yet to be made. As of now, Islamic finance is largely concentrated in a few regions, namely Southeast Asia and the Middle East, with a few Western countries taking an active role in promoting Islamic finance. Hence, the penetration of Islamic finance into other regions and countries is both a challenge and opportunity for Islamic finance. In order to do this, a robust Islamic financial system consisting of the banking and the non-banking Islamic financial intermediaries, the Islamic financial markets, a wide range of Islamic financial products, and a developed Islamic financial infrastructure is needed. For further details see: ISRA, Islamic Financial System; Principles and Operations.

What’s the Shariah Committee’s Opinion Regarding the Establishment of an Association for Islamic Banks and Financial Institutions?

Internationally accepted standards and best practices form major reference points for any regulatory and supervisory framework established by regulatory and supervisory authorities. For further details see: ISRA, Islamic Financial System; Principles and Operations.

A term used by the classical Muslim jurists to describe the function carried out by the state or appropriate Islamic authority to regulate the marketplace (ombudsman). It includes whatever steps may be needed in order to maintain fair and orderly market operation. For further details see: ISRA, Islamic Financial System; Principles and Operations.

RESOLUTION No. 48 (10/5): ENFORCEMENT OF SHARI'A RULES

The concept of corporate governance in Islam refers to a set of organisational arrangements on how a corporation is directed, managed, governed and controlled. This provides the governance structure through which all stakeholders’ interests are protected, the company’s objective is achieved and the principles of Shari’ah are complied with. For further details see: ISRA, Islamic Financial System; Principles and Operations.

Can an Islamic Bank Fund Recreational Activities for Its Workers Using Depositor or Shareholder Funds?

Islamic Governance & Ethics: The Shari'ah governance framework is a set of institutional and organisational arrangements to oversee Shari'ah compliance aspects of Islamic financial institutions. Shari'ah governance is particular to Islamic finance, as it is the mechanism which determines the "Islamicity" of any particular Islamic business or financial institution as well as the system as a whole. The significance of Shari'ah governance transpires via its role of ensuring the confidence of the Islamic finance industry in the eyes of the public. More importantly, Shari'ah governance ensures that the industry is at all times in accordance with the wishes and laws of the Almighty by ensuring the legitimacy of the products offered.

Buying an Asset That Is Leased to a Third Party
*بيع العقار في جنوب أفريقيا
Is It Permissible to Import Christmas Greeting Cards? Can KFH Open Letters of Credit for This Purpose?
Can a Financial Penalty Be Levied on Late Payment of a Loan?
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 141st Meeting
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 134th Meeting
Resolution No. 115(9/12): "Inflation and Change of Currency Value"
Resolution No. 112 (6/12): "Establishing Legal Proofs on Inferences and Signs"
قرار رقم 190 (5/20) بشأن دور المجامع الفقهية في ترشيد مسيرة المؤسسات المالية الإسلامية: آليات وصيغ
قرار رقم 177 (3/19) بشأن دور الرقابة الشرعية في ضبط أعمال البنوك الإسلامية أهميتها ، شروطها ، طريقة عملها
إمكانية مساهمة البنك في بعث صندوقين مشتركين للتوظيف
آلية أخذ الموافقة الشرعية للعمل بالصكوك الإسلامية
Application Of Man-Made Laws In Islamic Finance
Trading in Meat Imported from Non-Muslim Lands
What are the Conditions to Invest with a Company that Has a Shari’ah Board?
What are the Rulings of the Investment Agency Contract?
Is it permissible to finance projects which include a portion of haram activities providing their increasing significance in the society?
Hukum Ke Atas Produk Investment Link Menurut Islam
What Are the Conditions that Must Be Fulfilled by Any Company that Declares Its Desire to Be Shari’ah Compliant in Its Activities and Financial Dealings?
What’s the Shariah Committee’s Opinion on the Booklet Titled ‘Shariah Supervision in Islamic Banks’?
What Are the Proposed Members of Shariah Committee for Al-Fajr Islamic Find Which KFH Is Willing to Invest in?

Every independent country in the world is recognised for its sovereignty, and therefore is free to decide what legal system, legal institutions and laws to establish or adopt. For further details see: ISRA, Islamic Financial System; Principles and Operations.

Is It Allowed for KFH to Calculate the Actual Legal Costs for Each Lawsuit Fee by Comparison with Similar Debt Collection Cases Handled by Other Law Firms?

Looking into various impediments in the legal framework, Islamic fi nance may need to relocate its interest of sett ling disputes to Alternative Dispute Resolution (ADR). Alternative dispute resolution may be defi ned as procedures that serve as alternatives to litigation for the resolution of disputes. It generally involves the intervention and assistance of a neutral and impartial third party. It can be formal (e.g., arbitration) or informal (negotiation and mediation), and is a private and binding process where disputes are resolved by an award made by an independent tribunal (third party or parties, mediator, negotiator, or the arbitrator). The tribunal
is either agreed by the party or nominated by an independent body, e.g., a court or a professional institution such as the Chartered Institute of Arbitrators. For further details see: ISRA, Islamic Financial System; Principles and Operations.

RESOLUTION No. 91/8/9: THE PRINCIPLE OF ARBITRATION IN ISLAMIC FIQH
التحكيم الوارد بالعقود
Is it Lawful to Financially Penalize a Rich Debtor Who Delays Payment?
Who Bears the Loss in a Murabahah to the Purchase Order Financing Due to an Accident that Occurred Before the Goods Are Delivered to the Client?
Is Allowed to Include a Clause in KFH’s Contracts Which States That the Parties May Resort to Arbitration Before Resorting to Court in Case of Dispute Between Them?

The Arabic word means reconciliation between people and to remove any alienation between them. Technically it is a contract that remove a disagreement between opponents by consent. For further details see ISRA Compendium.

RESOLUTION No. 91/8/9: THE PRINCIPLE OF ARBITRATION IN ISLAMIC FIQH
Accounting Arrangements for Recording Collection of Doubtful Debts
Is It Permissible to Record and Distribute the Profits According to the Years of Payment in Accord with the Precise Rules of Accounting?
How Does the Bank Record the Profits of a Delayed-Payment Murabahah Sale?
مشروعية تداول العملات في عمليات الصرف قبل تقييدها حقيقة في الحساب
توزيع أرباح الصكوك في أثناء فترة عمل المشروع وقبل الفراغ منه
When Does an Agent Record the Profit from Murabahah on Behalf of His Principal?
When the Purchase Undertaker Is a Distribution Agent for the Exporter
احتساب نتائج المشاركة
If the Bank Drops the Outstanding Balance Due on a Car Destroyed in a Traffic Accident, Does the Buyer Have a Right to Ask for the Insurance Compensation?
Charges for Expenses of an Offering
Business Expenses in Musharakah based on Percentage of Capital
Selling Goods Recorded as Accounts Receivable before the Invoice is Settled
Can a Muslim Work as Visiting Specialist in a Commercial Corporation Involved in Usurious Transactions?
an Islamic Bank “Loan” Employees to Another Institution When the Cost of Their Salaries Brings No Direct Benefit to the Bank’s Shareholders?
Are Operational Leases and Finance Leases Both Considered Valid Lease Agreements?
Is it Shari‘ah Compliant to Make an Accounting Distinction between Prices of Short-Term and Long-Term Corporate Assets?
When Should Profits Earned Be Credited to the Accounts of Investment Account Holders?
Is It Allowed to Distribute Mudarabah Profits on the Basis of Gross Profits Rather Than Net Profits?
What Principle Should Be Used to Calculate Banking Sector Profit?
How to Treat a Customer Who Withdraws his Deposit from an Unrestricted Investment Account before the Agreed Time?
Is It Allowed to Buy Shares of a Conventional Insurance Company in Order to Convert It into a Cooperative Insurance Company?
What is the Starting Time in Calculating Zakah for an Amount Added to a Bank’s Reserve Fund and for the Issuance Premium?
Is it Permissible to Distribute the Profits before the Endorsement of the General Assembly?
Is it Allowed to Hide the Profit of a Party In The Marketing Bulletin?
What is the Ruling on the Condition Set by the CBK that the Assets Leased through ijarah muntahiyah bi al-tamlik must be Treated According to Shari’ah Standard No. 9 Issued by AAOIFI?
Method for Profit Distribution
Method for Revenue Recognition
Does the Unpaid Zakat on the Company’s Reserves for All Proceeding Years Considered a Debt Owed by the Company, and What Does the Extra Amount Paid as a Result of an Accounting Error Considered?
What's the Shariah Opinion Regarding the Profits Distribution of Murabahah to the Purchase Order Contract?
What's the Shariah Opinion Regarding the Murabahah Partnership and its Profit Distribution?
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Tax is payment due to a legislative authority as a result of the income or gains earned by the citizens or companies of the state. For further details see: ISRA, Islamic Financial System; Principles and Operations.

Can Interest Be Used to Pay Taxes?
ضريبة التمويل
دفع ضريبة عن مخصص مخاطر الاستثمار وقيدها على حساب الرصيد المتجمع في حساب مخاطر الاستثمار
الضريبة المترتبة على الشركات التي يؤسسها المصرف الإسلامي الأردني خارج الأردن
الفوائد المصرفية التي يضطر البنك لإيداعها في المصارف الربوية
استعمال الفوائد المحصّلة من بنم الجزائر في تسديد حصة بنك البركة الجزائري في شركة ضمان الودائع
إنفاق حصيلة الإيرادات الناتجة من الفوائد المحرمة وغرامات المدينين المعسرين المماطلين
فرض غرامة تأخير على العميل الذي لا يفي بالتزاماته
Revision Of Murabahah Price
What are the Conditions of Istisna‘ Contract?
Conditions Regarding the Creation of Investment Fund on Real estate investment?
Penentuan Hukum Syarak Di Dalam Pelaksanaan Skim Pajak Gadai Islam (Al-Rahn) Di Malaysia (Cadangan Kadar Upah Simpan Barang Gadaian)
What's the Shariah Opinion Regarding the Establishment of a Company Abroad to Benefit from Tax Exemptions Providing that these Companies Are Involved in Interest?
الحصة المفروضة من قبل الحكومة على السلع المستوردة من الصين وأثر ذلك على اتفاقية الوكالة

Money laundering is the process of transforming the proceeds of illegal activities into legitimate capital. In principle, any financial transaction could be an act by which unlawfully acquired money is laundered. There are consequently an infinite number of mechanisms whereby money, commonly, is laundered. For further details see: MONEY LAUNDERING LAW: Forfeiture, Confiscation, Civil Recovery, Criminal Laundering and Taxation of the Proceeds of Crime.


*بيع العقار في جنوب أفريقيا
اعتماد عمولة تغطية قيمة الحوالة وعمولة تنظيم تعهد قطع تصدير/ كتاب مسبق وعمولة تسديد تعهد
Transfer of Ownership of Goods from the Seller to the Buyer without Registering them in the Name of the Bank

Islamic Economics

The modern industrial environment has brought with it unprecedented socioeconomic problems affecting human wellbeing well beyond the traditional Shari'ah scholarship, even though the core principles of Islamic economics originated in the works of early Shari'ah scholars who laid down the foundations of maqasid and utility theory (e.g., Ghazali, Ibn Taymiyyah, Shatibi). Islamic economics is therefore, a newly emerging discipline that takes the lead in resolving newly arising economic issues from the viewpoint of maqasid. In other words, Islamic economics has emerged to satisfy new Needs in relation to the Mind, the productive human resource. For further details see: ISRA, Islamic Financial System; Principles and Operations.

Islamic economics is based on a paradigm which is not secularist and value-neutral. It treats all human beings as vicegerents of God and brothers unto each other. All resources at the disposal of human beings are trust and must be used for the well-being of all in conformity with the values provided by the Shari'ah. However, well-being in Islam is not a function of just material possessions and unlimited consumption. It is rather a function of the balanced satisfaction of both the material and the spiritual needs of the human personality. This can be done by actualising the maqasid al-shari'ah (goals of Shari'ah). For further details see: ISRA, Islamic Financial System; Principles and Operations.

قرار رقم 171 (9/18) بشأن حقوق الارتفاق وتطبيقاته المعاصرة في الأملاك المشتركة

Microeconomics The branch of economics that studies the behavior of individual decision- making units such as house holds and business firms. For further details see: THE FINANCIAL SYSTEM AND THE ECONOMY: Principles of Money and Banking.

The branch of economics that studies the aggregate, or total, behavior of all house holds and firms. For further details see: THE FINANCIAL SYSTEM AND THE ECONOMY: Principles of Money and Banking.

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. For further details see: ISRA, Islamic Financial System; Principles and Operations.


Risk Management Principles

Hassan (2009) identifies three types of risks from the Islamic perspective. First, is the essential risk that is inherent in all business transactions. The second risk is the prohibited risk in the form of excessive gharar. The final form of risk identified by Hassan is the permissible risk that does not fall in the above two categories. For further details see: ISRA, Islamic Financial System; Principles and Operations.


How Does the Bank Record the Profits of a Delayed-Payment Murabahah Sale?
The Purchase Undertaker Does Not Want the Intermediate Seller to Incur Added Expenses for Insurance against Certain Risks (1)
The Purchase Undertaker Does Not Want the Intermediate Seller to Incur Added Expenses for Insurance against Certain Risks (2)
قرار رقم: 195 (1/21) بشأن التحوط في المعاملات المالية
احتياطي معدل الأرباح
Legal Constraints on Buying Shares of Limited Liability Companies
تكوين احتياطي مخاطر الاستثمار

General Issues and Challenges of IFS

Risk sharing is a "contractual or societal arrangement whereby the outcome of a random event is borne collectively by a group of individuals or entities participating in an exchange contract, or by individuals or entities in a community" (Askari et al. 2011). For further details on risk sharing see: SOCIAL CAPITAL AND RISK SHARING: An Islamic Finance Paradigm.

Resolution No. 67: Purchasing aviation fuel and selling it to Company S
Transferring The Balance Of Certain Current Accounts To Savings Accounts
Co-Takaful Agreement

Insolvency & Bankruptcy: Bankruptcy is a legal process, under the order of a court, by which the debtor's assets are taken by the Director General of Insolvency. These assets are later distributed equitably among the creditors. 

Transfer of Contract With The Intention of Absconding One’s Responsibilities
الصرف من صندوق الإيرادات قيد التصفية على مستخدمي البنك
غرامة التأخير والمماطلة في السداد
بطاقة الائتمان الإسلامية وفقاً لصيغة القرض الحسن
Insurance of a Debt
The Purchase Undertaker Becomes Unable to Pay for the Good After the Bank Has Purchased It
Is it Allowed to execute a tawarruq transaction in order to pay off the debt if the objective is to realize the interests of both parties, especially the indebted customer?
Is it Allowed to Oblige Customers to Give Donations trough Additional Amount on sale Price?
Is it Allowed for KFH to Accept Shares and Bonds with Interest, Collect the Interest from the Company and Deduct it from the Debt until the Entire Debt is Paid?
Is it allowed to sell a portion of debts to the bad debt market at a price slightly less than what is owed by the client?
Is It Allowed for the Law Firm to Charge Fees to the Lessee for Late Payment?
Is it Allowed for KFH to Enter into a Contract with Debt Collection Agencies that Provide Gifts and Money in order to Collect the Owed Debts?
What is the Ruling on Establishing a Takaful Fund for Customers Indebted to KFH’s Local Real Estate Department?
What’s the Ruling on Risk Management of Housing Loans?
Surplus Sharing from Sale of Ijarah Asset between Lessor and Lessee
Surplus Sharing from Sale of Ijarah Asset between Lessor and Lessee
Application of Wa`d as a Mechanism in Dealing with Customer’s Default in Financing Based on Musyarakah Mutanaqisah
Sale of Collateralised Asset in the Event of Default by Financing Receiver to Pay the Financing Amount to Financier
Priority of Depositors in Recovering Deposit in the Event of Winding Up of an Islamic Banking Institution
Financing Settlement Through New Financing
Is it Allowed for KFH to Give Zakat Funds to an Employee Who is Heavily Indebted?
Is it Allowed for the Creditor to Pay the Debtor Any Amount from the Creditor’s Zakat Funds in Order for the Debtor to Pay the Debt Owed to the Creditor?
Is It Allowed for KFH to Calculate the Actual Legal Costs for Each Lawsuit Fee by Comparison with Similar Debt Collection Cases Handled by Other Law Firms?
RESOLUTION No. 64/2/7: INSTALLMENT SALE
Sale of the Commodity Subject Matter of the Contract
Profits from the Sale of Commodity Under the Contract
Status of Conventional Fund Placed in Mudarabah Special Investment Account in the Event of Winding Up of Banking Institutions
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
+ more
انخفاض قيمة العملة
استثمار البنك ودائع العملاء بالعملة الصعبة وردها بالعملة نفسها
Is It Allowed to Buy the Shares of Companies That Deal in Interest in Order to Change Them?
Is It Allowed to Buy the Shares of Companies Whose Activities Are Lawful but Have Usurious Loans?
Is It Allowed to Buy Shares of a Conventional Insurance Company in Order to Convert It into a Cooperative Insurance Company?
What are the Rulings of Purchasing Existing Companies and Restructuring them so that they Conform to the Investment Requirements of the Shari’ah?
Is it Allowed to Purchase Existing Companies in order to Islamize them?
Is it Allowed to provide a service (purchasing real estate) to customers on behalf of a conventional bank?
What are the permissible means to restructure a conventional debt in order to conform to the Shari’ah principles?
Is it Allowed for KFH to Accept Shares and Bonds with Interest, Collect the Interest from the Company and Deduct it from the Debt until the Entire Debt is Paid?
Is it Permissible to Purchase a Land’s Usufruct Together with the Constructed Facilities from a Company that Promises to Lease the Constructed Facilities from KFH?
Is it Allowed to Participate in a Lease Contract that is Currently Established on Conventional Lease Agreement in Order to be Leased Using a Shari’ah Compliant Lease Agreement?
Is it Allowed to Participate in a Lease Contract That Contains a Clause which Contravenes the Laws of Shari’ah?
Hukum Pembayaran Simpanan Kumpulan Wang Simpanan Pekerja (KWSP) Bagi Ahli Yang Memeluk Islam
What’s the Shariah Ruling Regarding a Loan with Specified Nominal Interest Given to a Company by the Shareholders Owing to Investment Conditions?
What Are the Conditions that Must Be Fulfilled by Any Company that Declares Its Desire to Be Shari’ah Compliant in Its Activities and Financial Dealings?
What’s the Shariah Opinion Regarding the Frameworks for the Conversion of Debt into Shares and the Islamization of a Targeted Company?
Is It Permissible to Offer Various Services Including Professional and Technical Training, Consultancy Services and Seminars to Riba-Based Banks?
What’s the Shariah Opinion Regarding the Handling of a Bank’s Previous Riba-based Loans that Were Made before the Bank Was Converted to an Islamic Bank?
Is It Allowed for a Bank Converted to Conventional to Islamic to Distribute Any Profits Resulting from the Interest Earned to its Shareholders?
How Can KFH as a Shareholder of an Islamic Bank that Converted from the Conventional System Handle the Profits Provided as Cash and Bonus Shares?
Is It Allowed to Establish a Portfolio to Purchase Companies That Provide Shariah Compliant Support Services Providing That Some of Them Provide Haram Services?
What Are the Conditions for Providing Credit Lines to a Company?
المشاركة في نشاط تجاري يتعامل بالربا إقراضًا واقتراضًا
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"
RESOLUTION No. 76/7/8: PROBLEMS OF ISLAMIC BANKS
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?
What is the Ruling of Penalty Clause?
+ more

Another hindrance to the development of the Islamic financial system is the different interpretations of Shari'ah among Shari'ah scholars on what is Shari'ah-compliant. The different opinions among Shari'ah scholars on relatively similar issues may create
confusion among the general public as well as practitioners of Islamic finance. In order to avoid the confusion among the market participants, there is a need for some sort of standardisation. In other words, standardising the rulings would make it easier for both companies and ordinary people to understand them better. In addition, the standardisation of the practices across the globe may bring about further growth and strength to the Islamic financial industry. For further details see: ISRA, Islamic Financial System; Principles and Operations.

RESOLUTION No. 98 (1/11): ISLAMIC UNITY
قرار رقم 190 (5/20) بشأن دور المجامع الفقهية في ترشيد مسيرة المؤسسات المالية الإسلامية: آليات وصيغ
قرار رقم: 202 (8/21) بشأن الحوار بين أتباع المذاهب الإسلامية
Revisiting The Rulings On Bai' 'Inah
What’s the Shariah Committee’s Opinion Regarding the Establishment of an Association for Islamic Banks and Financial Institutions?
RESOLUTION No. 38 (13/4): THE RECOMMENDATIONS OF THE FOURTH SESSION OF THE COUNCIL OF THE ISLAMIC FIOH ACADEMY
RESOLUTION No. 48 (10/5): ENFORCEMENT OF SHARI'A RULES
RESOLUTION No. (62/13/6): RECOMMENDATIONS OF THE SIXTH SESSION

The concept, financial inclusion, was initially referred to the delivery of financial services to low-income segments of society at affordable cost. However, during the past decade, the concept has evolved into four dimensions: (i): easy access to finance for all households and entreprises, (ii) sound institutions guided by prudential regulation and supervision, (iii) financial and institutional sustainability of financial institutions, and (iv) competition between service providers to bring alternatives to customers. Demirguc-Kunt, Bent and Honohan (2007). For further details see: FINANCIAL INCLUSION: Islamic Perspective.

Resolution No: 13 (1/3)[1]: Concerning The Islamic Development Bank’s inquiries
RESOLUTION No. 83/14/8: THE COMMISSIONING AND DEBATING OF RESEARCHES AT THE ACADEMY' S SESSIONS
Resolution No. 104: The permissibility of participating with University A to develop a cure for cancer
الفوائد المصرفية التي يضطر البنك لإيداعها في المصارف الربوية
إنفاق حصيلة الإيرادات الناتجة من الفوائد المحرمة وغرامات المدينين المعسرين المماطلين
فرض غرامة تأخير على العميل الذي لا يفي بالتزاماته
May an Islamic Bank Deposit Money with a Foreign Bank and Give the Interest in Charity?
an Islamic Bank “Loan” Employees to Another Institution When the Cost of Their Salaries Brings No Direct Benefit to the Bank’s Shareholders?
Can Muslim Male Employees Work with a Non-Muslim Woman Who Does Not Dress According to Shari‘ah?
What is the Ruling on Men Training Female Employees?
Is It Allowed to Conduct Mixed Training Programs for Male and Female Employees?
Is it Allowed to Involve in a Project that Provides Credit Lines to Invest in Education?
What is the Ruling on the Legality of Dealing in Education, Medical Treatment and Travel?
What is the Ruling on Spending zakat Funds to Print Academic Thesis on Islamic Banking?
Is It Permissible to Offer Various Services Including Professional and Technical Training, Consultancy Services and Seminars to Riba-Based Banks?
Is It Allowed to Spend Interest Given to KFH Without Its Request to Organize Seminars?
Is It Allowed for the Organization Providing Training Courses for KFH’s Employees to Compensate the Shortage of Male Lecturers with Female Lecturers?
RESOLUTION No. 38 (13/4): THE RECOMMENDATIONS OF THE FOURTH SESSION OF THE COUNCIL OF THE ISLAMIC FIOH ACADEMY
RESOLUTION No. 48 (10/5): ENFORCEMENT OF SHARI'A RULES
RESOLUTION No. 49 (11/5): INTERNATIONAL ISLAMIC LAW COMMISSION

 

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