Mezbah Uddin Ahmed

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Doctor of Philosophy of Islamic Revealed Knowledge and Heritage in Fiqh and Usul al-Fiqh
Fields/Area of Specialization
Islamic finance
Mr. Mezbah is an Islamic finance researcher at ISRA. He is also actively involved in various Shariah audit, advisory and consultancy projects at ISRA Consulting. He writes regularly on contemporary issues related to Islamic finance. He has contributed as an editor and writer of the Islamic Financial System

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Now showing 1 - 9 of 9
  • Publication
    Shariah audit of Islamic banks in Bangladesh: the present practice and the way forward
    Md. Kausar Alam; Abu Umar Faruq Ahmad; Mezbah Uddin Ahmed; Md. Salah Uddin; Mezbah Uddin Ahmed (Emerald Publishing Limited, 2023)

    The study explores the existing Shariah audit practice of Islamic banks (IBs) in Bangladesh aiming at providing suggestions for improvements on the detected shortfalls in the relevant areas. This research applied a qualitative method, and data were collected through conducting semi-structured interviews in Bangladesh. A total of 17 interviews were conducted for accomplishing the research objectives. The study finds that there is no comprehensive Shariah audit manual in the current operation for IBs in Bangladesh, and as such, the requirements of their Shariah compliance remain a big question. Although the Shariah audit is conducted within IBs, and the Shariah audit officers or Shariah officers inspect necessary documents while conducting the Shariah audit, they only cover 10-20% of total investments and transactions. Based on the findings of this study, it is recommended that the Shariah auditing tasks should broadly cover at least 80% of the investment portfolios, documents and financial contracts and activities. The findings of this research are expected to significantly contribute to the regulatory authorities concerned in Bangladesh and beyond, which include the suggestions that IBs can adopt to strengthen their Shariah governance system. The study also pinpoints that in the current system, Shariah auditors' roles are somehow limited in examining and checking the investment sides with a minimal portion (10-20%), for which they are unable to perform their responsibilities in a befitting manner to provide assurance services and overall Shariah compliance of IBs activities. This study explores the current Shariah audit systems and provides recommendations to improve the existing systems which will be beneficial for Islamic banks of Bangladesh.

  • Publication
    Financial reporting dimensions of intangibles in the context of Islamic finance
    Syed Musa Alhabshi; Sharifah Khadijah Syed Agil; Mezbah Uddin Ahmed (IIUM Press, 2018)

    Prior studies have identified that not all "intangibles" are reported as "intangible assets" in the statement of financial position. This particularly concerns the Islamic finance industry where intangibles are often used as underlying assets in structuring products. Accordingly, this research examines the unique Shari'ah requirements and the dichotomous views on the validity and permissibility of intangibles to be recognized as assets. As a result of an apparent need to re-examine the sufficiency of international financial reporting standards (IFRS/IAS) and the views of Shari'ah scholars on financial assets, the research is designed to analyse the sufficiency of IAS 38 Intangible Assets with reference to the Conceptual Framework for Financial Reporting of International Accounting Standards Board (IASB). For this purpose, an in-depth interview, two focus group discussions and a survey of target respondents from both academia and industry directly involved in reporting of Islamic financial services are carried out. From the engagement session with the Shari'ah scholars, the research has identified an alternative view of concern with reference to appropriate Shari'ah rulings to determine the permissibility and validity of intangible assets and its reporting implications. Whereas, a mixed response is observed in the survey in terms of clarity on accounting policy, treatment and disclosures with reference to the technicality of the standards as well as the peculiarity of the context in Islamic finance industry.

  • Publication
    Istijrar: an alternative solution to murabahah-based import financing facilities under letter of credit-I in Malaysia
    Muhamad Nasir Haron; Aniza Rahaya Zulkifli; Marjan Muhammad; Mezbah Uddin Ahmed (International Shari'ah Research Academy for Islamic Finance (ISRA), 2020)

    Islamic banks provide similar trade finance facilities to those of conventional banks. They intermediate between buyers (i.e., importers) and sellers (i.e., exporters), act as a custodian of documents, and provide means to reduce payment risks via different payment terms (e.g., open account, documentary collection and letter of credit (LC)). They also provide financing - as need be - to help with working capital tied to the trade transactions. This research focuses only on financing by Islamic banks to importers that involve LCs. Different underlying Shari'ah contracts are used for import financing facilities under LC, the most common being the murabahah contract. At the time of sale, the existence of the subject matter and its ownership by the seller are the key requirements for the validity of a murabahah contract. In the absence of either of these requirements, the contract is considered null and void.

  • Publication
    Shari'ah analysis of zakat on sukuk
    Mezbah Uddin Ahmed; Moutaz Abojeib; Mahadi Ahmad; Mezbah Uddin Ahmed (International Shari'ah Research Academy for Islamic Finance (ISRA), 2021)

    Sukuk in its contemporary form as a financial instrument has gained prominence only over the last one to two decades. Like a share, a sukuk is defined as an instrument representing undivided ownership over the underlying assets. Naturally, the question arises whether sukuk are subject to the same zakat rulings as shares. Accordingly, this research has identified the similarities between shares and Sukuk. The zakat rulings applicable to shares are also identified, and the research has made an attempt to apply those rulings in the context of sukuk. However, the research has identified the peculiarities of sukuk as it is currently practiced in the global market and provided fresh insights on how these may impact the applicability of zakat to sukuk. While the research includes theoretical Shari'ah analysis and discussion on various relevant zakat matters, it also reviews today's practices. Accordingly, relevant Shari'ah standards and requirements of various jurisdictions are identified, and several sukuk prospect uses are examined in relation to zakat calculation and disclosures. By this the research aims at enabling a coherent understanding of the theory and practice.

  • Publication
    Protection of investment account holders in Islamic banks in Malaysia: legal and accounting in Malaysia
    Mezbah Uddin Ahmed; Noor Suhaida Kasri (ISRA Consultancy Sdn Bhd, 2017)

    The Islamic banking industry in Malaysia is governed by the Islamic Financial Services Act 2013 (IFSA). This legislation marks another step in the evolution of the Islamic banking industry in Malaysia. Among its unique components, it re-classifies deposittaking products into two, namely Islamic deposits and investment accounts. The distinction has brought about a significant impact on the role that Islamic banks have traditionally been playing. The move from purely a credit intermediary to a mixed credit-and-investment intermediary is expected to promote real economic growth and development. In IFSA, investment account is defined as an account under which money is paid and accepted for the purposes of investment. This must be in accordance with the Shariah on terms that there is no expressed or implied obligation for the Islamic bank to repay the money in full or with any profit. This definition is instrumental as it explicitly distinguishes the character of an investment account from an Islamic deposit account as the latter guarantees return of the capital with or without a profit. This definition embeds statutorily the true spirit of Shariah-compliant investments, namely profit and loss sharing in musharakah, profit sharing and loss bearing in mudarabah and fee-based in wakalah bil istithmar.

  • Publication
    Zakat calculation software for corporate entities
    Mezbah Uddin Ahmed; Noor Suhaida Kasri (Palgrave Macmillan, 2021)

    Ensuring socio-economic justice, eradication of poverty and equitable distribution of wealth are among the primary objectives of Islam. Even so, a significant number of Muslims around the world are deprived of their basic needs. The scenario only worsens in times of financial and political turbulence. There is a desperate need to find sources of funding to rescue people from their miseries and offer sustainable solutions. Zakat has great potential to meet the funding needs. This chapter argues that zakat contributions will be amplified if corporate entities pay zakat as legal persons or on behalf of their Muslim shareholders. This chapter proposes development of a zakat calculation software to facilitate corporate entities and Islamic financial institutions calculating their zakat obligations reliably. Development of such software requires Islamic finance research entities to team up with information technology experts. Prominent Shariah scholars will play the essential role of validating and endorsing the Shariah compliance of the software.

  • Publication
    Maqasid al-Shariah in CSR practices of the Islamic banks: a case study of IBBL
    Kazi Md. Tarique; Dewan Mahboob Hossain; Md Abdul Momen; Mezbah Uddin Ahmed (Islamic Bank Training and Research Academy, 2017)

    Maqasid al-Shariah (the objectives of Islamic law) are meant to guide and benefit mankind in this world and the Hereafter. The Corporate Social Responsibility (CSR) activities focus on the welfare of the society at large and can also serve the objectives of the Shariah. This research focuses on the CSR activities of the leading Islamic bank in a developing country - Bangladesh. The study is based on the CSR activities of Islami Bank Bangladesh Limited (IBBL) - the oldest and largest Islamic bank of Bangladesh. The analysis is done on the basis of the requirements of Maqasid al-Shariah. The study is based on secondary data. It conducted content analysis of eight year annual reports (2009 to 2016) of the bank. The main areas where the bank is performing its CSR activities are identified. Then an analysis is done according to the levels of Maqasid al-Shariah (necessities, complements and embellishments). It is found that most of the CSR activities and expenditures of the bank are dedicated to the necessities. And, activities representing embellishments received slightly more importance than the activities representing complements. The contribution of the study is unique in nature since there is no prior empirical study that assesses the CSR in light of Maqasid al-Shariah in the Bangladeshi context.

  • Publication
    A critique of zakat practices in India
    Shahbaz Alam; Mezbah Uddin Ahmed (Lembaga Zakat Negeri Kedah Darul Aman, 2020)

    This paper attempts to identify and evaluate the current situation of zakat collection, distribution and management in India. This paper identifies the inherent objectives of zakat to understand the real potential of zakat institutions and how zakat is important to Indian Muslims and how the society can innovate and modernise the zakat system. This paper suggests a few recommendations that religious leaders and government authorities in India may consider adopting. It suggests the introduction of a mosque card as an innovative way of distributing zakat by integrating mosques and their local community.

  • Publication
    Application of murabahah mode of financing by Islamic banks of Bangladesh: issues and recommendations
    Md. Mahabbat Hossain; Md. Atiqur Rahman Khan Khadem; Mezbah Uddin Ahmed; Mezbah Uddin Ahmed (2023)

    Murabahah is a sale contract whereby the seller adds a markup with cost and discloses the amounts to the buyer. Islamic banks apply this concept to finance their customers on a short- and long-term basis. In fact, about 70 per cent of the total investments of the Islamic banks in Bangladesh is based on the murabahah concept. However, the application of this concept varies from bank to bank and product to product. Some of the practices face heavy criticism from different stakeholders. This research aims to identify the application of murabahah by the Islamic banks in Bangladesh in offering various investment products and compare these practices with the Shari'ah requirements of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and other reputed Shari'ah authorities. The research adopted a content analysis approach whereby the murabahah contract documents of all full-fledged Islamic banks in Bangladesh are examined. The research further conducted interviews of Islamic banking practitioners to establish the process flow of different murabahah-based investment products and conducted focus group discussions to validate the findings. The research finds the scope for improvements that the Islamic banks of Bangladesh may consider in achieving greater compliance with the AAOIFI Shari'ah standards. The research also proposes relevant recommendations for consideration of the Islamic banks of Bangladesh. The findings and recommendations of the research would be a reference for the Shari'ah governance functions of Islamic banks including the Shari'ah supervisory boards in identifying the potential weaknesses and to take steps in addressing those weaknesses