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Understanding Islamic Finance

This course is an introduction to Islamic finance.

1 Students Enrolled


·        Books on this topic

·        Islamic Finance is making sure that our practices are in line with Islamic law

·        The Arabs in pre-Islamic time would engage in many different kinds of transactions

·        Innovations in transactions come from either need or greed

·        Until the 1800s, Islamic practices were generally upheld throughout the Muslim world

·        In 2017, the total worth of the Islamic finance industry had an estimated worth of $2.05 trillion

·        Supply and demand is an important issue

·        It’s important to standardize on what is acceptable, and thus in 1990 AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions) was established

·        Conventional banks opened “Islamic windows”

·        The Islamic financial sector did better than the rest of the financial sector during the subprime mortgage crisis

·        Why should we study this topic?

·        Money cannot be mixed in terms of contract - it must be explicitly defined

·        Some people argue that usury is a necessity of a financial system

·        The basic thesis of secular economics is that capitalism leads to the best of all possible worlds

·        Murabaha

·        Time value of money

·        Prohibition of usury

·        Misconceptions about usury

·        Giving a loan is not a business transaction, it is a brotherly act

·        Should fiat currency be considered the same as dinar and dirham?

·        Contemporary banks grew out of goldsmiths

·        Definition of usury

·        Types

·        Islamic law says that money has specific purposes and should not be a subject of speculation

·        Problems with barter (advantages of money)

·        Six commodities

·        It is permissible to give a gift when repaying a loan with conditions

·        A business contract must specify how it is to be paid (i.e. which currency to be used)

·        What to do when one is already in a usurious contract?

·        Gharar

·        The ruling of a transaction depends on the kind of transaction

·        There is a lot of difference of opinion in gharar

·        Insurance

·        Business Ethics & Norms

·        Philosophy and Features of Islamic Finance

·        Banks were originally a link between people who wanted money and people who had money, and Islamic banks fulfill this need

·        Not all pre-fixed returns are riba

·        Higher risk leads to higher (potential) reward

·        Islamic banks, in general, deal in goods rather than money, unlike secular banks

·        Islamic Contract Law

·        Islamic Bonds (Sukuk)

·        We are not supposed to consume wealth through forbidden means, it must be through free, mutual consent

·        Promise vs Contract

·        This fiddling around with the sharia is due to demand from the Muslim community

·        In investment agreements, the loss must be allocated based on proportion of ownership, but the profit can be allocated based on an agreed ratio

·        Token money vs deposit (earnest money)

·        Options

·        Validity of a contract

·        Sale of debt

·        Legal chicanery

·        Options in sales (خيار)

·        Example of chicanery

·        Islamic banking

·        Recourse if a loan is not repaid

·        If a debt is owed, could one accept lesser payment right now and reduce the amount?

·        Can one charge late fees?

·        Islamic financing in US

·        Ameen Housing

·        Musharakah or “diminishing partnership” model

·        Need

·        Stocks




12 Months


Sheikh Jamaal al-Din M. Zarabozo

Sheikh Jamaal al-Din M. Zarabozo, born 1960 is a Spanish parented, French-born, and American based Islamic scholar, lecturer, and author of numerous books on Islam and speaker of many lectures on Islam.

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