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The Foundations of Islamic Banking

Theory, Practice and Education
Edited by Mohamed Ariff, Professor of Finance, Bond University, Australia and Senior Professor, University Putra Malaysia and Munawar Iqbal, Professor, King Abdul Aziz University, Saudi Arabia and Chief of Research, IRTI, Islamic Development Bank
After barely half a century of experience, Islamic banking has become established as a niche industry across the world, offering new and sophisticated financial products designed to be compliant with Islamic legal principles and common law. This comprehensive book explores the theory, principles and practices underpinning this rapidly expanding sector of banking.
Extent: 296 pp
Hardback Price: £81.00 Online: £72.90
Publication Date: 2011
ISBN: 978 1 84980 792 0
Availability: In Stock
Paperback Price: £32.00 Online: £25.60
Publication Date: 2012
ISBN: 978 0 85793 740 7
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  • Economics and Finance
  • Financial Economics and Regulation
  • Islamic Economics and Finance
After barely half a century of experience, Islamic banking has become established as a niche industry across the world, offering new and sophisticated financial products designed to be compliant with Islamic legal principles and common law. This comprehensive book explores the theory, principles and practices underpinning this rapidly expanding sector of banking.

Expert contributors – including eminent scholars and senior practitioners in the field – examine the roots of the principles of ethical Islamic financial transactions, which have evolved over several millennia, on issues including usury, interest rates, and financial contracting for funding enterprises, mortgages, leasing and other transactions. Regulatory and governance issues are discussed, and the practice and operation of Islamic financial institutions are explained via three distinct case studies. Importantly, the final chapter looks at what steps are being taken to provide professional accreditation to Islamic banking professional personnel, and prescribes requirements for training in this growing industry.

This rich and wide-ranging guide to the foundations and fundamental principles of this new form of ethics-based financial practice will prove a fascinating and illuminating read for regulators, practitioners, and scholars in the fields of economics, finance, money and banking.
‘Mohamed Ariff and Munawar Iqbal have put together a significant and useful body of productive thinking that will be of use to both academics and practitioners. . . This book is a very good collection of scholarly papers, well worth reading and reflecting upon. It will undoubtedly help students, academics and practitioners to improve their understanding of Islamic financial institutions and Islamic financial markets. It will be equally useful to specialists in economics, finance, money and banking because it combines a comprehensive discussion of theoretical aspects of the Islamic financial market with very rigorous empirical analysis.’
– Toseef Azid, The Muslim World Book Review

‘This wide-ranging guide to the foundations and fundamental principles of this new form of ethics-based financial practice will be of interest for regulators, practitioners, and scholars in the fields of economics, finance, money and banking.’
– Islamic Horizons
Contributors: I. Abraham, S.O. Alhabshi, S.H. Aljunid, M. Ariff, M.K. Badar, I. Bhatti, M. Bhatti, E. Girard, K. Hassan, T. Hassan, M. Iqbal, M.K. Lewis, C. Mews, A. Saeed, S.H. Razak, M. Shamsher, M.T. Skully, A. Walsh, M. Zaman
Contents:

Preface

1. Introduction to Islamic Financial Institutions
Mohamed Ariff and Munawar Iqbal

PART I: FOUNDATIONS OF ETHICAL FINANCIAL TRANSACTIONS
2. Ethics-based Financial Transactions: An Assessment of Islamic Banking
Mohamed Ariff

3. Ethical Principles in Islamic Business and Banking Transactions
Mervyn K. Lewis

4. Adapting Understanding of Riba to Islamic Banking: Some Developments
Abdullah Saeed

PART II: ISLAMIC BANKING PRINCIPLES, REGULATIONS AND GOVERNANCE
5. Development, History and Prospects of Islamic Banking
Munawar Iqbal

6. Development of Legal Issues of Corporate Governance for Islamic Banking
Ishaq Bhatti and Maria Bhatti

7. Corporate Governance and Islamic Banks
Michael T. Skully

PART III: THE PRACTICE: OPERATING ISLAMIC FINANCIAL INSTITUTIONS
8. Performance of Islamic Banks and Conventional Banks
Mohamed Ariff, Mohammad K. Badar, Shamsher M. and Taufiq Hassan

9. Shari’ah-consistent Investment Vehicles in Malaysia
Kabir Hassan and Eric Girard

10. Takaful Insurance: Concept, History and Development Challenges
Syed Othman Alhabshi and Shaikh Hamzah Razak

PART IV: A DEBATE ON THE ISSUE OF REWARD FOR PARTING WITH CAPITAL
11. Usury and its Critics: From the Middle Ages to Modernity
Constant Mews and Adrian Walsh

12. Riba and Interest in Islamic Banking: An Historical Review
Raquib Zaman

13. Tensions in Christian Financial Ethics: An Historical Overview
Ibrahim Abraham

PART V: EDUCATION AND PROFESSIONAL BANKING ACCREDITATION
14. Human Capital Development in Islamic Finance: Initiatives and Challenges
Syed Hamid Aljunid

Index