{"id":8962,"date":"2020-02-16T00:10:07","date_gmt":"2020-02-16T00:10:07","guid":{"rendered":"https:\/\/islamic-knowledge.co.uk\/?p=8962"},"modified":"2023-07-31T06:17:58","modified_gmt":"2023-07-31T06:17:58","slug":"islamic-finance-an-outline","status":"publish","type":"post","link":"https:\/\/alimaaninstitute.co.uk\/articles\/islamic-finance\/islamic-finance-an-outline\/","title":{"rendered":"ISLAMIC FINANCE: AN OUTLINE"},"content":{"rendered":"
\u2018Islamic finance\u2019 is defined as finance that embodies the ethos and values of Islamic law.<\/a>[1]<\/a> It is much wider than the term \u2018interest-free banking or finance\u2019. Interest-free finance refers to a number of financial instruments and operations which try to avoid interest. However, Islamic finance does not only avoid interest-based transactions. It is also required to avoid Gharar <\/em>(speculative behaviour), which is forbidden under Islamic law.<\/a>[2]<\/a> Moreover, parties are required to exchange benefits as profits without exerting unlawful pressure on the other party, and without applying fraudulent methods.<\/a>[3]<\/a> Other prohibitions under Islamic finance includes investments in activities related to tobacco, alcohol and drugs, speculation, gambling, pornography and weapons manufacturing. As a result of embodying all these principles, Islamic finance has been hailed as a \u201csocially responsible\u201d way of investment which provides safeguards for vulnerable populations. <\/a>[4]<\/a><\/p>\n The global market capitalization of Islamic finance, covering its three main sectors (banking, capital markets and takaful \u2013 <\/em>Islamic insurance) has been estimated at USD 1.89 trillion in 2016.<\/a>[5]<\/a> It is expected that its global assets will surpass USD 3 trillion by 2020.<\/a>[6]<\/a><\/p>\n In 2014, the UK became the first country outside the Muslim world to issue its first Islamic bonds (known as Sukuk) worth of \u00a3200 million.<\/a>[7]<\/a><\/p><\/blockquote>\n <\/a>[1]<\/a> Muhammad Ayub, Understanding Islamic Finance<\/em> (John Wiley & Sons 2007) 73.<\/p>\n <\/a>[2]<\/a> ibid.<\/p>\n <\/a>[3]<\/a> Abdur Rahman Doi, Shari\u2019ah the Islamic Law<\/em> (Ta Ha Publishers 1984) 351.<\/p>\n <\/a>[4]<\/a> Magdy Mart\u00ednez-Solim\u00e1n, \u2018Islamic Finance: An Innovative Avenue For Financing The Sustainable Development Goals\u2019, UNDP Geneva<\/em> (3 March 2017) <http:\/\/www.europe.undp.org\/content\/geneva\/en\/home\/our-perspective\/2017\/3\/3\/Islamic-Finance-An-Innovative-Avenue-For-Financing-The-Sustainable-Development-Goals.html<\/a>> accessed 31 May 2018.<\/p>\n <\/a>[5]<\/a> Islamic Financial Services Stability Report: Stability Report 2017<\/em> (IFSB Malaysia 2017) 7.<\/p>\n <\/a>[6]<\/a> Mart\u00ednez-Solim\u00e1n (n 4).<\/p>\n <\/a>[7]<\/a> \u2018Government Issues First Islamic Bond\u2019, Gov.UK<\/em>, (25 June 2014) <https:\/\/www.gov.uk\/government\/news\/government-issues-first-islamic-bond> accessed 31 May 2018.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":" \u2018Islamic finance\u2019 is defined as finance that embodies the ethos and values of Islamic law.[1] It is much wider than the term \u2018interest-free banking or finance\u2019. Interest-free finance refers to a number of financial instruments and operations which try to avoid interest. However, Islamic finance does not only avoid interest-based transactions. It is also required […]<\/p>\n","protected":false},"author":1,"featured_media":9655,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[16],"tags":[57,73],"class_list":["post-8962","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-islamic-finance","tag-finance","tag-islamic-finance"],"yoast_head":"\nReferences:<\/h2>\n