FIN – ISLAMIC FINANCE -UNIVERSITI TEKNOLOGI MARA (UiTM), KAMPUS BANDARAYA MELAKA. Islamic bonds, structured in such a way as to generate returns to investors without infringing Islamic law (that prohibits riba or interest). Sukuk represents. Sukuk is an Islamic financial certificate that provides an investor with ownership in an underlying asset. Sukuk were broadly used by Muslims in the middle ages.
|Published (Last):||7 January 2013|
|PDF File Size:||8.97 Mb|
|ePub File Size:||12.60 Mb|
|Price:||Free* [*Free Regsitration Required]|
Although, at first glance, the structure appears ideal for the financing of greenfield development, certain structural drawbacks have proven difficult to overcome and, as a result, sukuk al-istisna has not featured as an alternative source of Islamic funding on multi-sourced project financing in the manner once predicted.
Of particular significance is the prevailing view that sukuk al-istisna are not tradable during the construction period. Under an istisna, it is important that the price and specification of the good to be manufactured are agreed at the outset. Accordingly, sukuk al-istisna often combines aukuk istisna arrangement with a forward lease arrangement — whilst the istisna is the method through which the investors can advance funds to an originator, the ijara provides the most compatible payment method to those investors.
The use of staged payments a common feature in istisna construction arrangements — see further below may however result in an unutilised amount of sukuk proceeds being held in the structure for a prolonged period during construction pending the achievement mmaksud the relevant milestones. It should, however, be noted that this approach to investment of the unutilised sukuk proceeds has received some criticism.
Set out below is a summary of the basic requirements that should be considered when using a combination of istisna and forward leasing as the underlying structure for the issuance of sukuk:.
The following structural refinements are possible in respect of the sukuk al-istisna structure described above:. For latest information and data on sukuk, see the IslamicBanker Sukuk Monitor.
For more information, please see our Education resources on: Multiple Use of Modalities. Basic Characteristics of Islamic Investment Modalities. Belief in Divine Guidance. A Brief Sukyk to Islam.
Sources of Islamic Finance. Capital, Entrepreneur and Islam. Islamic banks — Current Practices. Five Main Contracts in Islamic Finance. Option Contract In Islamic Finance. Combination of Musharakah and Mudarabah. Mudarabah — Distribution of Profit.
Musharakah – Distribution of Profit. Mudarabah as a Mode of Finance. Musharakah as substitute for regular overdraft.
Basic Rules of Sale. Cost Calculation in Murabahah. Pricing for Cash and Credit Sales. Default Penalty – An Alternative. Features of Murabahah Financing.
Murabahah as a Mode of Financing. Rebate on Earlier Payment. Roll Over in Murabahah. Securities against Murabahah Price. Subject Matter of Murabahah. Use of Interest Rate as Benchmark. Constructing a Murabaha deal. Murabaha in prearranged deals. Rules of Leasing – Ijarah. Ijarah — The Parties. Ijarah as a Mode of Financing. The Commencement of Lease. Insurance of the Assets. Leased Asset – Residual Value. Assignment of the Lease. Liability in Case of Loss. Penalty – late payment of rent. Ijarah Leasing as a Mode of Finance.
Permission of Cash Rent Only. Investment of Unpaid Wages. Profit with Risk of Loss. Conditions of the Contract of Sale. Rights of the Seller.
Sale of Alcholic Drinks. Other Haram Contracts of Sale. Money as Medium of Exchange. Al-Hawala Endorsement of Debt. Remission of the Poor Debtor. Honesty in Public Funds. Prudent Use of Public Funds. Generosity of the Treasurer. Assessment on Public Finance. Economic Effects of Zakat. Philosophy of Economic Development. Negation of Excessive Pursuit of Wealth. Islamic Economics and Economics.
Allocation of Risk Through Mudarabah. An Appraisal of Monetary Policy. An Islamic Perspective on Discounting. Basic Features of Islamic Economics. Behavior of the Producer. Behavioral and Institutional Setting.
Capitalist Accumulation or Globalization. Challenges posed by MNCs. Changes Taking Maksux in Conventional Economics. Characteristics of an Islamic Economy. Commentary on Monetary Policy in an Islamic Economy. Comments on Current Islamic Banking. Comments on Discounting of in Project Evaluation. Comments on Fiscal Policy in an Islamic Economy. Comments on the Foundations of Taxation Policy. Comments on the Objectives of Fiscal Policy.
Comments on the Theory of Fiscal Policy. Comparison with the Welfare State. Desirable Strategy for Isalmization. Discount Rate in the Theory of Corporation Finance. Discounting for Public Projects. Discounting Under Uncertainty for a Private Investor. Discussion on Current Islamic Banking. Discussion on Discounting of in Project Evaluation. Discussion on Fiscal Policy in an Islamic Economy. Discussion on Monetary Policy in an Islamic Economy.
Discussion on the Foundations of Taxation Policy. Discussion on the Theory of Fiscal Policy. Distinguishing Characteristics of an Islamic Economy. Drawing upon the Legacy. Economic History of Ssukuk. Economic Philosophy of Islam. Emergence of Islamic Banks. Setting the Muslim Mindset, Malaysia.