Shariah Non Compliance Risk Management And Legal Documentations In Islamic Finance
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| Author | : Ahcene Lahsasna |
| Publisher | : John Wiley & Sons |
| Total Pages | : 243 |
| Release | : 2014-04-02 |
| Genre | : Business & Economics |
| ISBN | : 1118796861 |
A comprehensive guide to one of the key risk management issues in the expanding field of Islamic finance For Islamic financial institutions, Sharia non-compliance is a growing and key risk that must be carefully managed. This book offers a thorough look at non-compliance risk and explains the legal documentation necessary to ensure compliance for professionals in the Islamic finance industry. In addition, the book offers helpful guidance and understanding for the legal departments of Islamic financial institutions, as well as lawyers, legal firms, Shariah advisors, Shariah officers, and students studying Islamic finance. The book covers fundamental concepts, major risk elements, tools and techniques for identifying non-compliance, legal documentation, and the impact of non-compliance, among other vital topics. Offers comprehensive coverage of the growing field of non-compliance risk management in Islamic finance Includes in-depth coverage of legal documentation Written by an expert on the topic who teaches at INCEIF, The Global University for Islamic Finance and IIUM, International Islamic University of Malaysia in Malaysia
| Author | : Ahmad A Alkhamees |
| Publisher | : Martinus Nijhoff Publishers |
| Total Pages | : 301 |
| Release | : 2017-09-18 |
| Genre | : Law |
| ISBN | : 9004344438 |
Ahmad Alkhamees defines Creative Shari‘ah compliance as compliance with the letter but not the objectives of Shari‘ah. In recent years, Islamic finance industry practises have come under scrutiny, with strong critiques levelled against many institutions that claim to provide Shari‘ah-compliant products and services, which in fact undermine the spirit and the objectives of Shari‘ah. This book significantly contributes to the sphere of Islamic finance in three main ways. First, it critically appraises justifications of creative Shari‘ah compliance practises. Second, it examines how Shari‘ah supervisory board (SSB) governance practises, and the inconsistent fatwas issued by SSBs, contribute to the issue of creative Shari‘ah compliance. Most importantly, it suggests regulatory mechanisms which regulators can employ in Islamic countries such as Saudi Arabia and in secular countries such as the United Kingdom to deal with the issue of creative Shari‘ah compliance.
| Author | : Asmadi Mohamed Naim |
| Publisher | : UUM Press |
| Total Pages | : 204 |
| Release | : 2020-01-01 |
| Genre | : Business & Economics |
| ISBN | : 9672210922 |
The book provides comprehensive compilation on Islamic legal documents related to Islamic financial system consists of legal statutes, frameworks, guidelines, circulars and internal compliant manual covering Islamic banking, takaful and Islamic capital markets. Brief description of those documents are laid down to assist non-legal background readers in having comprehensive view of Islamic finance legal system. Few special focuses are done to Shariah screening methodologies for stocks, Islamic fund and real estate with special review on few sukuk issuances as to familiarize reader with the principle terms and conditions (PTC) of the sukuk. Islamic finance is not just a system but it is a way to achieve the spirit of Shariah i.e. maqasid Shariah in providing prosperity to the society in blessing ways avoiding all prohibited elements as stated in Islamic law.
| Author | : Kiran Javaria |
| Publisher | : Cambridge Scholars Publishing |
| Total Pages | : 104 |
| Release | : 2019-01-18 |
| Genre | : Reference |
| ISBN | : 1527526356 |
Islamic finance is a growing part of the global financial sector. The risks faced by Islamic banks are real, and how well they mitigate them will determine their future. This book answers questions regarding how Islamic Financial Institutions should focus on their risk management practices and the necessary solutions and policy implementation tactics. It also analyses the risk mitigation techniques Islamic institutions are putting to use, looking at different Islamic banks from across the world to investigate their strategies and solutions. Among the topics discussed here are the implementation and outcomes of Basel III, practical enterprise risk management practices, liquidity risk management, and the success story of the global takaful industry.
| Author | : Muhammad Al-Bashir |
| Publisher | : BRILL |
| Total Pages | : 361 |
| Release | : 2008 |
| Genre | : Religion |
| ISBN | : 9004152466 |
This study addresses derivatives instruments in Islamic finance. It highlights the benefits of these instruments, their legal aspects and the appropriate alternatives. The forward, futures and options contracts in commodity markets are discussed and the arguments in favour of and against these instruments examined. The forward contracts issue includes the possibility of trading gold in forward basis, the forward market for currencies and the possible alternative to manage related risks. With the examination of futures contracts, the main arguments against such a contract are addressed, for example the sale prior to taking possession and the sale of debt hedging and speculation. The study proposes "khiyar al-shart" and "bay al-arbun" as tools of risk management and alternatives to options. The sale of pure rights is at the center of the admissibility of options in Islamic law and is investigated comprehensively.
| Author | : Syed Adam Alhabshi |
| Publisher | : Walter de Gruyter GmbH & Co KG |
| Total Pages | : 192 |
| Release | : 2021-02-08 |
| Genre | : Business & Economics |
| ISBN | : 3110562758 |
Risk-sharing investment is currently the buzz word in Islamic finance. However, there is an incongruence in applying multilayered and opaque Tijarah contracts for investment purposes. This has contributed to the divergence between Shariah and Common Law and caused tremendous problems and systemic legal risks to Islamic finance. The authors of Shariah Investment Agreement introduce a legal tool in the form of a Shariah Investment Agreement carefully drafted to ensure that it is Shariah-compliant and can be applied in Common Law jurisdictions as well, so as to allow for the execution of risk-sharing investment in Islamic finance. It details the building blocks and key considerations that must be noted when drafting such agreements so the investor and investee will know what to expect when entering into such a contract. Proper implementation of the Shariah Investment Agreement will pave a clear route to a harmonious convergence between Shariah and Common Law and lead to Islamic finance developing further to become a stronger, unstoppable force in the finance industry.
| Author | : Wafik Grais |
| Publisher | : World Bank Publications |
| Total Pages | : 38 |
| Release | : 2006 |
| Genre | : Accounting |
| ISBN | : |
Abstract: The structures and processes established within an institution offering Islamic financial Services (IIFS) for monitoring and evaluating Shariah compliance rely essentially on arrangements internal to the firm. By being incorporated in the institutional structure, a Shariah supervisory board (SSB) has the advantage of being close to the market. Competent, independent, and empowered to approve new Shariah-conforming instruments, an SSB can enable innovation likely to emerge within the institution. The paper reviews the issues and options facing current arrangements for ensuring Shariah compliance by IIFS. It suggests a framework that draws on internal and external arrangements to the firm and emphasizes market discipline. In issuing its fatwas, an SSB could be guided by standardized contracts and practices that could be harmonized by a self-regulatory professionals' association. A framework with the suggested internal and external features could ensure adequate consistency of interpretation and enhance the enforceability of contracts before civil courts. The review of transactions would mainly be entrusted to internal review units, which would collaborate with external auditors responsible for issuing an annual opinion on whether the institution's activities has met its Shariah requirements. This process would be sustained by reputable entities such as rating agencies, stock markets, financial media, and researchers who would channel signals to market players. This framework would enhance public understanding of the requirements of Shariah and lead to more effective options available to stakeholders to achieve improvements in Islamic financial services.
| Author | : Humayon A. Dar |
| Publisher | : Harriman House Limited |
| Total Pages | : 281 |
| Release | : 2012-01-09 |
| Genre | : Business & Economics |
| ISBN | : 0857192000 |
Unprecedented economic growth and wealth accumulation in predominately Muslim countries have prompted many financial institutions in the US and Europe to position their investment teams across the Middle East and Asia to be closer to the markets in which they invest, and to take advantage or asset-gathering opportunities. This growth has also encouraged an increasing number of western industrialised countries to adopt legislation that responds to the requirements of the Musli investment community. To be effective in these markets it is essential that professionals have an understanding of how Shari'a legal principles are applied in the financial sector. Failure to do so exposes them and their clients to potential financial, legal and reputational pitfalls. The Chancellor Guide to the Legal and Shari'a Aspects of Islamic Finance is the first professional reference to focus specifically on the legal dimension of Islamic Finance. The guide brings together nineteen Islamic Finance legal practitioners and advisers to provide a comprehensive yet practical legal perspective on the subject. Each contributor draws on several years' hands-on experience in Islamic Finance product development and advice to leading financial institutions to provide a real-world, contemporary assessment of the key legal issues in Islamic Finance. The guide's hands-on approach and accessible style make it required reading for everyone with a professional interest in Islamic Finance, be they lawyers, accountants, regulators, bankers or investors. It is also a unique reference for academic institutions worldwide.
| Author | : Imam Wahyudi |
| Publisher | : John Wiley & Sons |
| Total Pages | : 432 |
| Release | : 2015-09-01 |
| Genre | : Business & Economics |
| ISBN | : 1118734459 |
Gain insight into the unique risk management challenges within the Islamic banking system Risk Management for Islamic Banks: Recent Developments from Asia and the Middle East analyzes risk management strategies in Islamic banking, presented from the perspectives of different banking institutions. Using comprehensive global case studies, the book details the risks involving various banking institutions in Indonesia, Malaysia, UAE, Bahrain, Pakistan, and Saudi Arabia, pointing out the different management strategies that arise as a result of Islamic banking practices. Readers gain insight into risk management as a comprehensive system, and a process of interlinked continuous cycles that integrate into every business activity within Islamic banks. The unique processes inherent in Islamic banking bring about complex risks not experienced by traditional banks. From Shariah compliance, to equity participation contracts, to complicated sale contracts, Islamic banks face unique market risks. Risk Management for Islamic Banks covers the creation of an appropriate risk management environment, as well as a stage-based implementation strategy that includes risk identification, measurement, mitigation, monitoring, controlling, and reporting. The book begins with a discussion of the philosophy of risk management, then delves deeper into the issue with topics like: Risk management as an integrated system The history, framework, and process of risk management in Islamic banking Financing, operational, investment, and market risk Shariah compliance and associated risk The book also discusses the future potential and challenges of Islamic banking, and outlines the risk management pathway. As an examination of the wisdom, knowledge, and ideal practice of Islamic banking, Risk Management for Islamic Banks contains valuable insights for those active in the Islamic market.
| Author | : Muhammad Ashraf |
| Publisher | : |
| Total Pages | : 15 |
| Release | : 2018 |
| Genre | : |
| ISBN | : |
Customers interested in the Islamic banking Industry continue to put a question that whether the bank they wish to do business with is practically implementing Sharīʻah rules and guidelines despite being registered as an Islamic bank and having fatwá from the competent authority. This paper proposes a set of 14 rating factors that measure the risk of Sharīʻah non-compliance at an Islamic bank. These factors are used as an input to develop Sharīʻah Risk Rating Model, which can be used by the customers of the Islamic banking industry, the management of an Islamic bank, and the central banks to measure the degree of Sharīʻah compliance at an Islamic bank. The paper also suggests a methodology towards allocating capital charge against the risk of Sharīʻah non-compliance under Pillar 2 of Basel III accords. The main strengths of this model are simplicity and relevance towards assessing the Sharīʻah noncompliance risk because input factors are based on the information derived from published financial statements only. Another key strength is that the end rating can be used on a standalone basis or as an extension to the conventional rating models provided by external agencies such as Fitch, Moody's, S&P etc. Development of this model is aimed at motivating the banking customers, management of Islamic banks, and central banks to improve the implementation of Sharīʻah guidelines and hence contribute towards accelerated growth of the Islamic finance industry. The model was applied on three selected banks on unsolicited basis and results reflect discriminating power of the input factors in order to gauge the Sharīʻah risk.
