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Research Monograph Corporate waqf via initial public offering (IPO): a viable instrument for the sustainability of Malaysia's higher learning institutions Authors: Mahadi Ahmad; Noor Suhaida Kasri; Sa'id Adekunle Mikail; Mohamed Ibrahim Negasi (2020) The need for sustainable funding of institutions of higher learning led the Government of Malaysia to formulate its Universities Transformation Programme 2015-2025. This transformation agenda came out as the Purple Book which highlighted the need to address the funding gap that may occur in the education sector in the event of unexpected budget cuts. It called for the enhancement of income generation, endowments and waqf to achieve self-sustainability for higher learning institutions (Ministry of Higher Education Malaysia, 2016). Based on the above premise, this research explores the viability of corporate waqf via initial public offering (IPO) as an instrument to raise funds and sus...

Research Monograph Istijrar: an alternative solution to murabahah-based import financing facilities under letter of credit-I in Malaysia Authors: Marjan Muhammad; Mezbah Uddin Ahmed; Muhamad Nasir Haron; Aniza Rahaya Zulkifli (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 sal...

Research Monograph Unearned wakalah fee in the takaful industry in Malaysia: a critical analysis Authors: Sa'id Adekunle Mikail; Fares Djafri; Mahadi Ahmad; Burhanuddin Lukman (2021) The issue of unearned wakalah fees (UWF) arises due to the statutory requirements in the Islamic Financial Services Act (IFSA 2013) that mandate takaful operators to refund any undue contribution with the corresponding wakaah fee in the event of surrender or termination of a takaful certificate. The relevant statutory provisions and Bank Negara Malaysia (BNM) guidelines on the valuation basis for liabilities of family and general takaful are open to more than one interpretation, and the exact definition and components of money not due are not clear. The implementation of the statutory provisions and regulatory guidelines on the refund of UWF has raised the following issues for the Ma...

Research Monograph Shari'ah analysis of zakat on sukuk Authors: Mahadi Ahmad; Mezbah Uddin Ahmed; Moutaz Abojeib (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 insight...

Research Monograph Islamic finance: Shariah and the SDGs - thoughts leadership series part 4 - October 2021 Authors: Fares Djafri; Younes Soualhi (2021) This report is the last part of a four-part thought leadership series delivered by the International Shari'ah Research Academy for Islamic Finance (ISRA) in partnership with the Islamic Finance Council UK (UKIFC). The series is intended to inspire IFIs to embrace the SDGs and demonstrate to the world that consideration for people, planet and purpose can coexist with profit and form the heart of the next generation of Islamic financial products. This part will mainly document the current level of knowledge, understanding and perspectives on the SDGs amongst key IF industry stakeholders, primarily Shariah scholars. The concept of sustainable development was articulated for the first tim...

Research Monograph The emerging Shari'ah issues of the Covid-19 pandemic in contemporary Islamic financial applications Authors: Said Bouheraoua; Fares Djafri; Sa'id Adekunle Mikail (2021) The outbreak of the coronavirus epidemic (COVID-19), classified by the World Health Organization as a pandemic, has led to the emergence of many challenges. It started as a health crisis and then turned into a global economic crisis that most countries could not manage or control as a result of lockdown policies and restrictions on movement and travel. This is not to mention the forms of damage that have affected the contractual obligations and rights of various contracting parties at the level of financial institutions such as banks, takaful companies and others. The challenges imposed by the coronavirus pandemic have led to a reexamination of the fiqh treatment of catastrophes. The ...

Research Monograph The concept of the time value of money: a Shari'ah viewpoint Authors: Abdul Khir, Mohamed Fairooz (2012) The concept of the time value of money (TVM) has been well accepted and widely applied in the conventional financial system for a very long time. However, Islamic scholars hold differing views regarding its conceptual and practical foundation in the Islamic financial system. The opponents of TVM have argued that recognizing it will lead to acceptance of riba, against which Islam is at war. This may, however, be a hasty judgment. Islam does not reject any concept that aligns with its teaching, promotes justice among people and secures their interests, particularly in financial transactions. The concept of TVM establishes that time can be given a counter-value in association with real c...

Research Monograph Criteria for determining the Shari'ah compliance of shares: a Fiqhi synthesis Authors: Mohamad, Shamsiah; Habib, Farrukh; Salim, Kinan (2018) Shari'ah has specific rules for dealing in each class of assets and activities; i.e., cash, debt, goods, usufruct, and those classified as either halal (permissible) or haram (impermissible). These rulings can be easily applied when such an asset or activity is an independent subject matter of a transaction. However, the issue becomes complicated when an asset or activity is mixed with others and the combination is represented as a single subject matter. A fine example of this situation is shares of a joint stock company. A company share represents all the activities and underlying assets of that company. Some of the activities and assets of that company may be Shari'ah non-compliant ...

Research Monograph The endowment fund as a source of sustainability for higher education in Malaysia: maximising investment returns Authors: Baharom Abdul Hamid; Wiaam Hassan; Sarafuddin Abdul Syahid Sowell (2018) Higher education plays an important role in the human capital development of a country. Investment in higher education generally rises every year, and sustaining the financing of public institutions involved in higher education is becoming economically burdensome upon the state.While the cost for sustaining higher education is rising, the allotment for it in the government budget is eroding. In light of this, governments around the world, including Malaysia, are exploring measures to financially maintain higher education institutions without shifting the burden of ever-increasing university fees onto students and their families.

Research Monograph Islamic banking and finance in North Africa: past development and future potential Authors: Wilson, Rodney (2011) The aim of this report is to assess the state of Islamic banking in North Africa, examine why it has failed to take-off and consider its future potential and how it can contribute to the economic development.

Research Monograph Protecting takaful against the risk of failure: a critical appraisal of the takaful benefits protection system (TBPS) in Malaysia Authors: Shaikh Abdul Razak, Shaikh Hamzah; Mikail, Said Adekunle; Bouheraoua, Said; Ahmad, Muhammad Ali Jinnah; Abdullah, Nurdianawati Irwani (2014) The establishment of the Takaful and Insurance Benefits Protection System (TIPS) in Malaysia is a statutory requirement. TIPS aims to ensure financial stability, soundness and public confidence. Perbadanan Insurans Deposit Malaysia (PIDM), known internationally as the Malaysia Deposit Insurance Corporation, is the sole regulatory body entrusted with the mandate to regulate deposit insurance across the country. At the outset, its mandate was confined to banking institutions. Since 2010, however, PIDM’s role has been extended to include takaful and conventional insurance institutions. With regard to takaful, the operation of the Takaful Benefits Protection System (TBPS) and the relation...

Research Monograph Benefitting from a loan (qard) contract: an analysis of juristic opinions Authors: Saleem, Muhammad Yusuf; Abozaid, Abdulazeem (2013) In Islam, a loan (qard) is considered a gratuitous contract, and providing a loan to a person in need is a recommended (mandub) act for which a lender is rewarded. The gratuitous nature of the loan contract is emphasised in various hadiths which also prohibit the lender from deriving any stipulated benefit from the loan he has provided. Loans that generate conditional benefit to the lender are considered usurious. The practice of usury (riba) is inextricably tied to the loan and debt where a lender charges the borrower an additional amount. The main focus of this research paper is to provide a critical discussion on the ruling that prohibits the lender from deriving conditional benefi...

Research Monograph Islamic interbank money market products: the Malaysian experience of developing new financing instruments Authors: Lahsasna, Ahcene; Shayad, Faisal (2014) In managing liquidity, conventional banks resort to investing in treasury bills, overdrafts, placements with the central bank or with other conventional banks in order to gain interest, even if the placement is only overnight. However, it is not possible for Islamic banks to use the same instruments because of the numerous Shari'ah violations in them. Furthermore, Islamic banks have alternative financial products that are derived from Islamic jurisprudence. They can use various contracts such as qard hasan (benevolent loan), mudarabah (profit sharing between a capital provider and an entrepreneur who contributes only his labor and expertise), murabahah (mark-up sale), or other Shari'a...