Table of contents for Understanding Islamic finance / Muhammad Ayub.

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1 Introduction
1.1 Economic Scenario in the Neoclassical Framework
1.2 Conventional Debt: A Recipe for Exploitation
1.3 Growth per se May not Lead to Socio-economic Justice
1.4 Social Welfare Activities of the States
1.5 The Main Culprit
1.6 The Need of the Hour
1.7 Economics and Religion
1.8 Islamic Principles Can Make the Difference
1.9 Regulating Trade and Business
1.10 Islamic Finance Passing Significant Milestones
1.11 Could it Work to Achieve the Objectives?
1.12 About this Book

2 Distinguishing Features of the Islamic Economic System
2.1 Introduction
2.2 Islamic Sharī´ah and its Objectives
2.3 Why Study Islamic Economics?
2.4 Islamic Economics: What should it be?
2.5 Paraphernalia of Islamic Economics
2.6 Summary

3 The Main Prohibitions and Business Ethics in Islamic Economics and Finance
3.1 Introduction
3.2 The Basic Prohibitions
3.2.1 Prohibition of Riba
3.3 Business Ethics and Norms
3.4 Summary and Conclusion

4 The Philosophy and Features of Islamic Finance
4.1 Introduction
4.2 The Philosophy of Islamic Finance
4.3 Debt versus Equity
4.4 Islamic Banking: Business versus Benevolence
4.5 Exchange Rules
4.6 Time Value of Money in Islamic Finance
4.7 Money, Monetary Policy and Islamic Finance
4.8 Summary


5 Islamic Law of Contracts and Business Transactions
5.1 Introduction
5.2 Māl (Wealth), Usufruct and Ownership
5.2.1 Defining Various Related Terms
5.3 General Framework of Contracts
5.4 Elements of a Contract
5.5 Broad Rules for the Validity of Mu’āmalāt
5.6 W’adah (Promise) and Related Matters
5.7 Types of Contracts
5.8 Commutative and NonCommutative Contracts
5.9 Conditional or Contingent Contracts
5.10 Summary

6 Trading in Islamic Commercial Law
6.1 Introduction
6.2 Bai´ – Exchange of Values
6.3 Legality of Trading
6.3.1 Trade (Profit) versus Interest: Permissibility versus Prohibition
6.4 Types of Bai´
6.5 Requirements of a Valid Sale Contract
6.6 Riba Involvement in Sales
6.7 Gharar – A Cause of Prohibition of Sales
6.8 Conditional Sales and “Two Bargains in One Sale”
6.9 Bai´ al’Arbūn (Downpayment Sale)
6.10 Bai´ al Dayn (Sale of Debt)
6.11 Al ’Inah Sale and the Use of Ruses (Hiyal)
6.12 Options in Sales (Khiyar)
6.13 Summary

7 Loan and Debt in Islamic Commercial Law
7.1 Introduction
7.2 The Terms Defined
7.3 Illegality of Commercial Interest
7.4 Loaning and the Banking System
7.5 Guidance from the Holy Qur’ān on Loans and Debts
7.6 The Substance of Loans
7.7 Repayment of the Principal Only
7.8 Time Value of Money in Loans and Debts
7.9 Instructions for the Debtor
7.10 Instructions for the Creditor
7.11 Husnal Qadha (Gracious Payment of Loan/Debt)
7.12 Remitting a Part of a Loan and Prepayment Rebate
7.13 Penalty on Default
7.13.1 Insolvency of the Debtor
7.14 Hawalah (Assignment of Debt)
7.15 Security/Guarantee (Kafalah) in Loans
7.16 Bai´ al Dayn (Sale of Debt/Debt Instruments)
7.17 Impact of Inflation on Loans/Debts
7.18 Summary


8 Overview of Financial Institutions and Products: Conventional and Islamic
8.1 Introduction
8.2 What is Banking or a Bank?
8.3 The Strategic Position of Banks and Financial Institutions
8.4 Categories of Conventional Financial Business
8.5 The Need for Islamic Banks and NBFIs
8.6 The Issue of Mode Preference
8.7 Islamic Investment Banking
8.8 Islamic Financial Markets and Instruments
8.9 Summary and Conclusion

9 Murabaha and Musawamah
9.1 Introduction
9.2 Conditions of Valid Bai´
9.3 Murabaha – a Bai´ al Amānah
9.4 Bai´ Murabaha in Classical Literature
9.5 The Need for Murabaha
9.6 Specific Conditions of Murabaha
9.6.1 Bai´ Murabaha and Credit Sale (Murabaha–Mu’ajjal)
9.7 Possible Structures of Murabaha
9.8 Murabaha to Purchase Orderer (MPO)
9.9 Issues in Murabaha
9.10 Precautions in Murabaha Operations
9.11 Musawamah (Bargaining on Price)
9.12 Summary

10 Forward Sales: Salam and Istisna’a
10.1 Introduction
10.2 Bai´ Salam/Salaf
10.3 Benefits of Salam and the Economic Role of Bai´ Salam
10.4 Features of a Valid Salam Contract
10.5 Security, Pledge and Liability of the Sureties
10.6 Disposing of the Goods Purchased on Salam
10.6.1 Alternatives for Marketing Salam Goods
10.7 Salam – Post Execution Scenarios
10.8 Salam-Based Securitization – Salam Certificates/Sukuk
10.9 Summary of Salam Rules
10.10 Salam as a Financing Technique by Banks
10.11 Istisna’a (Order to Manufacture)

11 Ijarah – Leasing 279
11.1 Introduction
11.2 Essentials of Ijarah Contracts
11.3 General Juristic Rules of Ijarah
11.4 Modern Use of Ijarah
11.5 Islamic Banks’ Ijarah Muntahia-bi-Tamleek
11.6 Summary of Guidelines for Islamic Bankers on Ijarah

12 Participatory Modes: Shirkah and its Variants
12.1 Introduction
12.2 Legality, Forms and Definition of Partnership
12.3 Basic Rules of Musharakah
12.4 The Concept and Rules of Mudarabah
12.5 Mudarabah Distinguished from Musharakah
12.6 Modern Corporations: Joint Stock Companies
12.7 Modern Application of the Concept of Shirkah
12.8 Diminishing Musharakah
12.9 Diminishing Musharakah as an Islamic Mode of Finance
12.10 Summary and Conclusion

13 Some Accessory Contracts
13.1 Introduction
13.2 Wakalah (Agency)
13.3 Tawarruq
13.4 Ju’alah
13.5 Bai´ al Istijrar (Supply Contract)

14 Application of the System: Financing Principles and Practices
14.1 Introduction
14.2 Product Development
14.3 The Nature of Financial Services/Business
14.4 Prospects and Issues in Specific Areas of Financing
14.5 Islamic Banks’ Relationship with Conventional Banks
14.6 Fee-based Islamic Banking Services
14.7 Summary and Conclusion
Appendix: The Major Functions of a Sharī´ah Supervisory Board in the Light of the AAOIFI’S Shar¯ı´ah Standard

15 Sukuk and Securitization: Vital Issues in Islamic Capital Markets
15.1 Introduction
15.2 The Capital Market in an Islamic Framework
15.3 Securitization and Sukuk
15.4 Summary and Conclusion

16 Takaful: An Alternative to Conventional Insurance
16.1 Introduction
16.2 The Need for Takaful Cover
16.3 The Sharī´ah Basis of Takaful
16.4 How the Takaful System Works
16.5 Takaful and Conventional Insurance Compared
16.6 Status and Potential of the Takaful Industry
16.7 Takaful Challenges
Appendix: Fatāwa (Juristic Opinions) on Different Aspects of Insurance

17 An Appraisal of Common Criticism of Islamic Banking and Finance
17.1 Introduction
17.2 The Common Myths and Objections
17.3 Appraisal of Conceptual Criticism
17.4 Appraisal of Criticism on Islamic Banking Practice
17.5 Conclusion

18 The Way Forward
18.1 Introduction
18.2 Agenda for the Policymakers
18.3 Potential, Issues and Challenges for Islamic Banking
18.4 Conclusion

Arabic/Urdu References
Suggested Further Reading

Library of Congress subject headings for this publication:
Finance -- Islamic countries.
Finance -- Religious aspects -- Islam.
Economics -- Religious aspects -- Islam.