Principles of Islamic Finance

AAOIFI Standard Number Three – Default in Payment by a Debtor

The purpose of this standard is to explain the Shari’a rulings applicable to the transactions of Islamic Financial Institutions relating to delay on the part of solvent debtors in settling their debts, delay on the part of guarantors and contractors in fulfilling their obligations, and the ruling on the matter of penalty clauses. »

6th January 2016
AAOIFI Standard Number Four – Settlement of Debt by Set-off

The aim of this standard is to outline rules governing the use of set-off in settling debts, the Shari’a requirements and conditions applicable to set-off, what is permissible or not permissible in this procedure and the most significant practices of Islamic financial institutions (institution/institutions) in this regard. »

6th January 2016
AAOIFI Standard Number Five – Guarantees

This standard deals with guarantees that are intended to secure obligations and protect amount of debts, either from being uncollectible or from being in default. Such guarantees may take the form of written documents, attestations, personal guarantees, pledges, cheques and promissory notes. »

6th January 2016
AAOIFI Standard Number Six – Bank Conversion to an Islamic Bank

This standard discusses fundamental mechanisms for converting a conventional bank to a bank that comply with Shari’a rules and principles right after the decision to undertake immediate comprehensive conversion within a particular designated period that is announced, whether such a decision comes from within the bank or from outside the bank to be converted by outside parties interested in convert... »

6th January 2016
AAOIFI Standard Number Seven – Hawala

This standard deals with hawala transactions that involve a change of debtor, i.e. transfer of debt. The scope of this standard shall not include banking remittances except the remittances that take the form of hawala (transfer of debt). »

6th January 2016
Interest Benchmarking in Islamic Transactions

The theory of Islamic banking & finance was introduced about four to five decades ago and as per this theory; the transactions can be benched-marked to prevailing ‘interest rate’ in the country. The argument in its support is that 'interest rate' is a mere number and Islamic finance transactions are only being pegged to this rate to access the future price. »

13th November 2015
A History of Islamic Finance

Some principles of Islamic finance stem from prior Abrahamic traditions, whilst some historical Islamic finance instruments have been adopted into modern conventional products such as letters of credit and cheques. »

22nd October 2015
Sharia Finance Contract Structures

Sukuk structures in accordance with the principles of Shari’ah are the same as the principles which apply to other products in Islamic law and finance. Real world case studies and guides produced by Latham and Watkins, and Linklaters. »

2nd July 2015
Misconceptions of Sharia

“Sharia Law” is a phrase which elements of the media in the West have made synonymous with beheadings, stoning to death, the chopping off of hands, banning women from driving and education, full-face veils, intolerance and the like. Such arguments fail to understand there is no single version of Sharia Law which worlds 1.6 billion Muslims follow. Sharia Law varies greatly from country to country. »

2nd July 2015
The Modern Journey of Development

Covering the major modern milestones of the development of the modern financial industry, from Mit Ghamr Bank to the UK Sovereign Sukuk. »

1st July 2015
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