Degree
Master of Science in Islamic Banking & Finance
Department
Department of Finance
Faculty/ School
School of Business Studies (SBS)
Date of Submission
Spring 2024
Supervisor
Dr. Mohammad Azam Ali, Assistant Professor & Senior Research Fellow CBER, Department of Accounting & Law
Keywords
Collateral, Pledge, Islamic law of contract, Islamic Banking
Abstract
The results of the analysis have revealed that factors such as collateral have a prominent importance in the Islamic financing contracts. The study explains that it is permissible from Shari‘ah view point to accept collaterals for advances of financing facilities under Shari‘ah nominated contracts. To validate this, references from Quran and Hadith are also cited in this report considering it as primary sources of Shari‘ah. The study classified different types of collaterals that can be utilized in Islamic financial contracts along with charge (pledge) for proceeding Islamic contracts. It also covers the rights and obligations assigned to the parties of a contract i.e. lender and borrower in mainly used types of Shari‘ah nominated contracts. The Study concludes that acceptance of collateral is only required to fulfill the regulatory requirement is Islamic Banks. Whereas, it may not prevent the financing institution to avoid loss situation in a transaction if there is no negligence of customer. This may vary on a case to case basis and may have several implications.
Document Type
Restricted Access
Submission Type
Research Project
Recommended Citation
Azim, F. (2024). Shari‘Ah Analysis of Collateral in Conventional and Islamic Banks in Pakistan (Unpublished graduate research project). Institute of Business Administration, Pakistan. Retrieved from https://ir.iba.edu.pk/etd-ms-ibf/52
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