Banking

February 15, 2018

Investment Banking and Commercial Banks

The commercial and investment banks had operated in their independent domains for a good part of the twentieth century. The former catered to individuals and businesses […]
February 11, 2018

Accessory Contracts and Hibah

Islamic banks use many other accessory contracts including Wakalah, Jua’lah, Tawarruq, Kafalah, Rahn, Hawalah, Istijrar, Amanah, Wadiah, and Hibah. Ju’alah is a reward or payment for […]
February 10, 2018

The Concept of Lease – Ijara

The instrument of Ijarah brings Shari’ah compliance to the traditional lease contracts of commercial institutions. Elements of Riba or gharar present in many lease contracts make […]
February 10, 2018

Forward Sales – Salam and Istisna’a

Salam is a cash sales agreement where the seller promises to provide the buyer with an agreed product at a future date in exchange for an […]
February 6, 2018

Reverse and Organized Murabaha

  Both traditional and Islamic banks have to deal with short term cash issues. They either have too much cash which needs to be invested to […]
February 5, 2018

Murabaha – Cost Plus Sale

Murabaha is an instrument where the bank acquires a product upon request from the customer and sells it at an agreed upon profit. This is an […]
February 5, 2018

Diminish Musharakah

Mudarabah and Musharakah are the preferred methods of interest-free financing. However, they are not well suited for modern day acquisition of property and other tangible assets. […]
February 3, 2018

Qard Hasan – A Benevolent Loan

Qard is any kind of loan given by one party to the other and which is due back to the lender within an agreed upon contract. […]
February 2, 2018

Indexation of Financial Obligations

Indexation is a part of financial contract where the amount due is adjusted for the change in value of currency based on a defined index. In […]