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Abstract
The Centre of Excellence in Islamic Finance (CEIF) at IBA has published this book titled ‘Case Studies in Islamic Finance and Shari’ah Compliance’. The Global Islamic Economy is valued in excess of US$ 2.2 trillion , and the Islamic Finance Sector is expected to reach US$ 3.8 trillion by 2022 . The Islamic Finance Industry in Pakistan has recorded annual growth rate exceeding 14% over the past two decades, and is still on an upward growth trajectory. However, its share in the banking sector deposits is merely 14.5% . The industry has a lot of scope to expand Islamic nance outreach. This can be possible if the industry invests in and develops its own human resources and managerial capacity. Realizing the need for literature that is focused on application of Islamic Finance Industry practices across the globe, CEIF has made a modest attempt to bring together in this volume the case studies that would shed light on the practical application of the principles of Islamic Finance and Shari’ah Compliance. The book includes case studies on diverse range of topics, from basic to advanced level, which can be used to reinforce class room learning in Islamic Finance degree and training programs. Renowned industry practitioners, academicians and members of the distinguished research team at CEIF have contributed to this book. In its pursuit to encourage knowledge transfer, case studies by foreign authors have also been included to share their experiences with the local market. Shari’ah scholars further added to the richness of the content through their valuable insights and opinions on Shari’ah related matters.
Keywords
Financial liabilities, Financial assets, Shari'ah, Case studies, Islamic Finance
Table of Contents
Acknowledgements.................................................................................................................................. iii Foreword...................................................................................................................................................iv Preface .......................................................................................................................................................v Definitions ................................................................................................................................................vi Omega Airlines: Sukuk al Ijarah vs Sukuk al Mudarabah in Aircraft Financing .....................................1 Dr. Obiyatullah Ismath Bacha – Sarwat Ahson Accounting for Islamic Financial Transactions: A Case Study on Financial Reporting Practices ..........8 Dr. Zulkarnain Muhamed Sori Educational Loans: The Case of Akhuwat ...........................................................................................34 Dr. Irum Saba – Dr. Khadija Bari Maldives Islamic Bank: Liquidity Management Challenge .................................................................. 41 Shazia Farooq – Harith Harun Essen Pakistan Limited – Working Capital Financing for a Multinational Company ..........................50 Nasir Razak Mahar Shari’ah Audit of Ijarah Based Transactions ......................................................................................... 61 Asfand Zubair Malik Case # 1: Unique Goods Company – Adjustment of Floating Rate Rentals............................................................65 Case # 2: Mr. Shahzaib Khan – Treatment of Advance Rentals in Total Loss and Theft Cases...........................66 Case # 3: Mr. Yasir Alvi – Waiver of Late Payment Charity .......................................................................................67 Shari’ah Context in the Issuance of Perpetual Subordinated Sukuk: The Case of MAHB Malaysia ...70 Dr. Ahcene Lahsasna Accounting for Leasing: The Case of Islamic Car Financing................................................................82 Dr. Zulkarnain Muhamed Sori – Dr. Shamsher Mohamed Technical Note: The Need and Structure for Disbursement of Zakat .................................................92 Dr. Irum Saba – Hafsa Hassan First Complete Asset Replacement in a Sovereign Sukuk ................................................................... 106 Sarwat Ahson – Ahmed Ali Siddiqui Stepping on the Field – Akhuwat and Government of Punjab Providing Agricultural Loans to Small Farmers ..................................................................................................................................................118 Syed Hussain Haider – Jayyeda Taimoor Abid Sugar Mills Limited: Working Capital Crisis Management......................................................... 130 Shazia Farooq – Ahmed Ali Siddiqui i Case Studies in Islamic Finance and Shari’ah Compliance Salam as Practiced in Islamic Financial Institutions ........................................................................... 139 Mufti Muhammad Omer Ahmed Surplus Liquidity Management by Pakistan’s Islamic Finance Industry .......................................... 150 Sarwat Ahson – Ahmed Ali Siddiqui Accounting the Property Acquisition: The Case of Musyarakah Mutanaqisah ................................. 160 Dr. Zulkarnain Muhamed Sori Halal Journey of SHANGRILA (Pvt.) Limited ....................................................................................171 Atif Ahmed – Isra Ahmed Emerald Electric Company Limited: Liquidity Management Issues ................................................. 183 Shazia Farooq – Ahmed Ali Siddiqui Shari’ah Audit of Murabaha Based Transactions ................................................................................ 195 Asfand Zubair Malik Case # 1: M.Q. Processing Company – Murabaha Financing for Purchase of Edible Oil ........................... 200 Case # 2: Iqra Feeds – Murabaha Financing for Imports ........................................................................... 201 Case # 3: Saleem Power – Murabaha Financing for Purchase of Fuel ........................................................ 203 Technical Note on Application of Shirkat-ul-Aqd based Sukuk in Service Industry - A Case of TPL Trakker Sukuk ....................................................................................................................................... 206 Syed Sitwat Rizvi – Isra Ahmed Islamic Microfinance as a Commercial Enterprise............................................................................... 221 Irsa Ajmal Consumer Finance – Car Ijarah ........................................................................................................... 229 Syed Sheraz Akhter Dolmen City REIT – A Shari’ah Compliant Rental REIT Scheme ..................................................... 234 Adnan Rizvi – Marium Zehra Subrogation and Transfer of Ownership in Total Loss & Theft – A Technical Note on Motor Insurance/Takaful ................................................................................................................................ 245 Muhammad Farhan Hasan A Permissible Mode of Currency Trading ........................................................................................... 260 Muhammad Omer Ahmed Khan – Muhammad Hasan Amir Shari’ah Compliance of Equity Stocks ................................................................................................. 267 M. Farhan-ul-Haq Usmani – Isra Ahmed Rajput Cement Factory: Capacity Expansion ..................................................................................... 285 Shazia Farooq – Ahmed Ali Siddiqui Technical Note: WAPDA GoP (Government of Pakistan) Ijarah Sukuk ........................................... 300 Mohsin Ali
Publication Date
2018
ISBN/ISSN
978-969-9759-09-3
Rights Information
Copyright © Author, 2018
Note
The case studies and technical notes presented in this book express views of the authors; IBA Center for Excellence in Islamic Finance (CEIF) is not responsible in any way for the opinions expressed therein. The book comprises of a blend of real cases with fully disclosed identities, real cases with undisclosed identities for confidentiality purpose, and completely fictitious cases. For real cases, consent was taken from organizations represented therein by the authors. Consent has not been taken where publicly available information has been used. References to real entities like government bodies mentioned in some cases have been made, as mere examples, by the authors and may not represent the positions of these bodies or persons. Reasonable efforts have been made to ensure authenticity of the information provided in the document, and reference materials have been cited. However, the authors and CEIF cannot assume responsibility for reasonableness of all data provided, and consequences of its subsequent use. Neither this book, nor any part of it, can be translated or reproduced by any means, be it electronic mechanical, magnetic, manual or otherwise including printing, photocopying, recording, and microfilming, or through any information storage or retrieval systems, without prior approval of CEIF.
Recommended Citation
Siddiqui, A., Ahson, S., & Farooq, S. (2018). Case Studies in Islamic Finance and Shari’ah Compliance. IBA Press. Retrieved from https://ir.iba.edu.pk/iba-press/5
