Contracts and Deals in Islamic Finance - A User?s Guide to Cash Flows, Balance Sheets, and Capital Structures

A very accessible and concise guide to Islamic finance
 
Contracts and Deals in Islamic Finance provides a clear breakdown of Islamic financial contracts and deal structures for beginners. The embedded requirements within selected Islamic financial contracts, such as risk weightage, capital structures, creations of cash flows, and balance sheets, are explained fully to provide a solid understanding of the backbone of the industry. Aimed primarily at beginners and those with a background in conventional banking, this book guides readers through the major contracts, how they're applied, and how to discern a contract's legitimacy. Case studies and interviews with bankers and global regulators provide real-life examples of contract application, and the author's own experiences provide deep insight into the everyday issues that arise. Ancillary instructor's materials include PowerPoint slides and lecture notes that facilitate use in the classroom.
 
Literature describing the application of Islamic financial contracts is few and far between, and those providing a basic breakdown of these contracts and questioning their validity are rarer still. This book is the first of its kind, offering a basic approach to understanding Islamic contracts, designed for the true beginner.
* Understand the current contracts applied in Islamic banking
* Learn how contracts are applied across different jurisdictions
* Identify illegitimate contracts and those not in the spirit of Shariah law
* Examine the current economic realities surrounding Islamic finance
 
By highlighting the underlying themes in Islamic finance and assessing the current practices, this book gives readers the solid understanding and up-to-date perspective that form a solid foundation upon which successful Islamic finance is practiced. For a solid introduction to the Islamic finance industry, Contracts and Deals in Islamic Finance is an accessible, practical guide.

Sommario

Foreword xv
 
Preface xvii
 
Acknowledgments xxi
 
Product Offerings xxiii
 
Introduction 1
 
CHAPTER 1 The Islamic Finance Space 5
 
Modern Phase of Islamic Finance 8
 
CHAPTER 2 Bai al Inah 13
 
Definitions of Bai al Inah 13
 
Bai al Inah Process Flow 15
 
Legal Issues with Bai al Inah 17
 
Bai al Inah as a Financial Product 19
 
Transfer of Ownership 20
 
Documentation Involved 21
 
Resolutions on Bai al Inah 21
 
Conclusion 22
 
CHAPTER 3 Murabahah, Bai Mu'ajjal, and Bai Bithman Ajil 23
 
Murabahah Sale/Credit Sale/Credit 25
 
Enhancements to Murabahah 26
 
Murabahah Working Capital 28
 
Credit-Based Sale/Markup or Riba 28
 
Bonafide Murabahah/True Sale 29
 
Trading House Model 31
 
Financial Services Division of a Manufacturer or Retailer 32
 
Bai Bithman Ajil 32
 
BBA with Inah 32
 
Conclusion 34
 
CHAPTER 4 Tawarruq 35
 
Issue of Price Fixing 37
 
Transfer of Title 38
 
Payment of Sales Tax 39
 
Applications of Tawarruq in Banking Products 40
 
Real Economic Activity 43
 
Conclusion 44
 
CHAPTER 5 Deferred Payment Sale or Credit Sale 45
 
Accounting Entries for Murabahah by Purchase Orderer 47
 
Accounting Entries for a Bai al Inah Contract 48
 
Pricing of Deferred Sales under Murabahah, BBA, Inah, and Tawarruq 49
 
Risk Treatment of Deferred Payment Sales 53
 
Fixed Income Portfolio 57
 
Conclusion 58
 
CHAPTER 6 Bai Al Wafa 59
 
Financial Assets as Subject of Sale 60
 
Bai Al Wafa and Sale of Equities 60
 
Bai Al Wafa and Sale of Sukuk 60
 
Conclusion 61
 
CHAPTER 7 Salaam and Istisna: Deferred Delivery Sale 63
 
Salaam 63
 
Istisna 68
 
Conclusion 70
 
CHAPTER 8 Bai al Sarf 75
 
Basic Rulings on Bai al Sarf 75
 
Conclusion 77
 
CHAPTER 9 Bai al Dayn 79
 
Purchase Price, Rental Payments, Receivables, and Debt 80
 
Rental Payments Due in an Ijara Contract 81
 
Financial Products 81
 
Sale of Equity 82
 
Conclusion 83
 
CHAPTER 10 Bai al Urbun 85
 
Conclusion 89
 
CHAPTER 11 Ijarah and Its Variants 91
 
Normal Ijarah 92
 
Accounting Entries for Ijarah Contract 93
 
Ijarah Muntahiya Bi Tamleek 95
 
Al Ijarah Thumma al Bai (AITAB) 95
 
Sale and Leaseback 96
 
Conclusion 97
 
CHAPTER 12 Wadiah 99
 
Forms of Wadiah 100
 
Enhancements to Wadiah 100
 
Money Creation 104
 
Conclusion 108
 
CHAPTER 13 Qard 111
 
Applications of the Contract of Qard 112
 
Qard as a Deposit Instrument 113
 
Recording of Qard 113
 
Conclusion 114
 
CHAPTER 14 Mudharabah 115
 
Simple Application of Mudharabah 117
 
Perpetual Mudharabah 118
 
Re-Mudharabah 118
 
Restricted Mudharabah and Unrestricted Mudharabah 118
 
Mudharabah as a Deposit 120
 
Mudharabah as a Fund 121
 
Interbank Mudharabah Placements 122
 
Indicative Rate of Return 122
 
Profit Sharing Ratio 123
 
Importance of Disclosure and Accounting Treatments 123
 
Mudharabah as an Asset Product 124
 
Accounting Treatment of Mudharabah Transactions 126
 
Conclusion 126
 
CHAPTER 15 Musharakah 129
 
Musharakah and Banking 130
 
Mushrakah as Asset Product 132
 
Poolin

Info autore

HUSSAIN KURESHI has extensive experience in consumerbanking, credit risk management, loan origination, and monitoring for SME and commercial clients. He has a successful banking career that spans over 15 years and specializing in banking operations and management with international organizations.
MOHSIN HAYAT has over 20 years of institutional and international capital arket experience. Simultaneously as an entrepreneur and investor, he has specialized in creating strategic alliances in over 45 countries and building businesses in New York, Hong Kong and across Asia-Pacific. His success is driven by a keen interest in combining business knowledge and investment management fundamentals.

Riassunto

A very accessible and concise guide to Islamic finance Contracts and Deals in Islamic Finance provides a clear breakdown of Islamic financial contracts and deal structures for beginners.

Dettagli sul prodotto

• Autori: Mohsin Hayat, Hayat Mohsin, H Kureshi, Hussei Kureshi, Hussein Kureshi, Hussein Hayat Kureshi, Kureshi Hussein
• Editore: Wiley, John and Sons Ltd
• Lingue: Inglese
• Formato: Copertina rigida
• Pubblicazione: 10.03.2015
• EAN: 9781119020561
• ISBN: 978-1-119-02056-1
• Pagine: 300
• Serie: Wiley Finance Editions; The Wiley Finance Series; Wiley Finance; Wiley Finance Editions
• Categorie: Scienze sociali, diritto, economia > Economia > Economia aziendale; Kapitalanlage, Finanzwesen, Finance & Investments, Finanz- u. Anlagewesen, Spezialthemen Finanz- u. Anlagewesen, Finance & Investments Special Topics, Islamischer Kapitalmarkt