Essays on Islamic Banking and Finance

By Mahmood Ahmed

The book provides essays on Islamic banking and finance published earlier in thereputed journals. It covers quite a comprehensive list of concepts and ideas for peoplewho are interested on the topic and would like to practice it. Based on the Quranicinjunction, "Allah, The Almighty, has permitted trade and forbidden riba (2: 275),"Islamic banks do not deal in money rather deals with money using the Islamic modesof finance.The bank converts or links 'bank money' into 'commodity' and sells thoseto the ordering buyer at a 'mark-up profit' under the installments of re-payment infuture. Islamic banking therefore, may be called 'money to commodity to money(MCM) model of banking. On the other hand, conventional banks deal in money. Itmay be called money upon money (MM), which is prohibited 'riba' model ofbanking. Islamic banks necessarily link financing to real goods, services and projects.Outright lending without the involvement of goods and services may not be possiblein the system. Further, it may be called 'asset-backed' financing system. Islamicfinance in form and legality is asset-backed at the micro-juristic level. It also ensurescontrol of bank over 'money movement' which ultimately contributes to minimize theoverdue risk of bank and curb over expansion of credit to both public and privatesectors. This may help attain monetary expansion in harmony with the growth ofoutput and, thus help minimize inflationary pressures. In Islamic banking, profit is thereward of risk. Islamic banks bear risk under documentary ownership andconstructive possession of goods for a short or fleeting time. The 'mark-up profit' isthe reward for converting 'bank-money' into 'commodity' and selling them underconstructive possession to the promised buyer. It is 'mark-up profit' that is generatedfrom the adaptation of Shariah principles of buying and selling to Islamic banking.Mark-up profit therefore, is neither 'general profit, nor 'riba'. The adaptation ofShariah is allowed in the Shariah principle of 'Istihsan'.

• Format: Paperback
• Language: English
• ISBN: 1983399418
• ISBN13: 9781983399411
• Release Date: July 2018
• Publisher: Independently Published
• Length: 282 Pages
• Weight: 0.92 lbs.
• Dimensions: 0.6" x 6.0" x 9.0"