Table of Contents
Foreword xiii
Preface to 2nd Edition xv
Acknowledgements xvii
Introduction 1
Islamic History 10
The Quran 10
The Five Principles of Islam 11
The Mosque 12
Muhammad and the Origins of Islam 12
The Spread of Islam 14
The Golden Age of Islam 15
Decline and Fall 17
A Revival of Fortunes 18
Middle-Eastern Oil 20
Islamic Nationhood in the Late Twentieth Century 20
The Iranian Revolution and After 22
Islamic Banking and Islamic Revival 24
Shari'ah Law and Islamic Jurisprudence 26
From the Obligatory to the Forbidden 27
The Quran, the Sunnah and the Hadith 27
The Five Major Schools of Islamic Law 28
Classical Islamic Jurisprudence and the Processes for Ascertaining the Law 31
The Concept of Fatwah 33
From Revelation to Codification: Scholasticism and the Formulation of Doctrine 35
Closing of the Door of Ijtihad 36
Shari'ah and State Law in the Modern Era 37
Islamic CommercialLaw 40
Islamic vs. Non-Islamic Commercial Transactions 41
Principal Requirements of the Shari'ah in Relation to Commercial Activities 42
Islam: the Difference between Equity and Debt 44
Rationale of the Prohibition of Interest 45
Conventional Banking and the Prohibition of Riba in Islam 47
Treatment of Deposits with Interest 48
Profit and Loss Sharing 48
Profit-Sharing Enterprises 49
Islamic Contract Law 50
Types of Contract in Shari'ah 51
Islamic Financing in a Contemporary Setting 53
The Problem of Uncertainty (gharar) 54
Summary 55
Islamic Financial Products 59
The Emergence of Islamic Banking 60
Different Paths, Same Goal 63
What Investment Products are Permissible under Islamic Shari'ah Law 65
Shari'ah Investment Principles 66
Equity-Financing and Debt-Financing in Pre-Islamic Arab Society 68
Islamic Equity-Financing and Debt-Financing 70
Equity Securities: Profit-Sharing Contracts 71
Debt-Financing Contracts 73
Debt Securities 78
Shari'ah Qualifications in Leasing 79
Other Risk-Taking Products 80
Islamic Insurance 81
Takaful Insurance in a Contemporary Context 82
Takaful Compared with Conventional Insurance 83
Summary 84
Issues and Challenges of Islamic Banking Today 87
Obstacles to the Application of Islamic Law to Present Day Banking 88
Derivation from Revealed Sources 89
Methodological Differences 90
Pluralism of Fatwahs 93
The Problem of Applying Islamic Law in a Western Legal Environment 94
Accounting and Corporate Regulatory Practices 95
Depositors and Regulators 98
Regulators' Concerns 100
Legal Challenges 104
Developing an Efficient Regulatory Framework 104
Special Requirements of Islamic Banking 106
Assessment and Management of Investment Risks 108
Proposals for a Regulatory Framework for Islamic Banking 110
Conclusion 111
Islam in South-east Asia 115
The Coming of Islam to South-east Asia 115
European Rivalries and Colonisation 117
The Road to Independence 119
Post-Independence: A New World Order 120
The Philippines 121
Indonesia 123
Malaysia 124
Brunei 127
Islam in South-east Asia Today 128
Colonial Legacies: Islam and State Law in South-east Asia 130
Shari'ah vs. State Law 131
British Malaya 132
The Introduction of English Common Law to Malaya 134
Out of India 135
Muslim Law in Malaysia 137
Conflict between Muslim Law and English Common Law 138
Maria Hertogh: A Case in Point 140
Post-Independence 142
Islamic Banking in Malaysia 144
Origins of Islamic Banking in Malaysia 145
Bank Negara Guidelines on Islamic Banking 147
The Shari'ah Supervisory Council 148
Making Islamic Banking Compatible with Conventional Banking 149
Some Observations on the Malaysian Legal Framework 150
Islamic Financial Products in Malaysia: The Concept of an Islamic Window 151
The Malaysian Government Investment Certificate 152
Debt Securities 153
Islamic Accepted Bills 155
Takaful Insurance in Malaysia 155
Conclusion 157
Islamic Banking in Indonesia 161
Islam and Government in Indonesia 162
Traditional Islamic Financial Institutions in Indonesia 165
Introduction of Measures to Permit Islamic Banking in Indonesia 166
Contemporary Indonesian Islamic Financial Institutions 166
The Introduction of Standard Accounting Procedures 168
Forms of Lending and Borrowing in Indonesia 169
Lending Forms 169
Profit-Sharing Forms 170
Borrowing Forms 171
Conclusion 172
Labuan: A Niche in the Islamic Money Market 175
Role of Labuan Financial Services Authority 176
Labuan Offshore Companies 177
Currency and Exchange Control 177
Tax Incentives 177
Labuan International Financial Exchange 178
Moving Forward with Islamic Banking 179
Conclusion 180
Islamic Banking in Brunei 182
Introduction 182
Brunei International Financial Corporation (BIFC) 184
The Exclusion of Money Laundering a First Priority 185
Parallel Jurisdictions 185
Islamic Banking in Brunei 186
Takaful in Brunei 189
Latest Developments 189
Conclusion 192
Banking in Singapore 194
Introduction 194
Legal Framework - Legislation Enacted by the Parliament of Singapore 198
English Common Law and Statutes 199
Singapore - An Alternative to Switzerland 200
Singapore - Financial System Stability Assessment 201
Singapore's Role as a Financial Centre 202
Islamic Banking in Singapore 203
Conclusion 209
Conclusion 210
Introduction 210
Conversion Project Plan 212
Moral Hazard and the Risk of Fraud 213
The Problem of Delays in Payment and Insolvency 214
Problems with Futures Contracts 215
Moving Forward 216
Conclusion 218
Glossary 221
Bibliography 226
Index 236
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