Postgraduate Diploma

in Islamic Finance Practices

Trainer:
Dr. Md. Habibur Rahman, CIFP
Shari’ah And Islamic Finance
Faculty Of Business And Management
University Sultan Zainal Abidin (Unisza)
Terengganu, Malaysia
hrnizamee10@gmail.com
Unit #3_ FUNDAMENTALS OF ISLAMIC FINANCIAL SYSTEMS
Class #2

Discussion Agenda:

- Islamic Banking In Bangladesh

- Various Types Of Islamic Financial Institutions
- Regulatory bodies and standard providers
for IFIs around the globe
- Challenges and Ways Forward For Islamic Finance
Islamic Banking in Bangladesh

Islamic Banking Cell

Research Department
Bangladesh Bank
January-March 2021
Executive summary
• At the end of March 2021, Bangladesh’s 10 full-fledged Islamic banks have been operating with 1558
branches out of total 10767 branches of the whole banking sector. In addition, 19 Islamic banking branches
of 8 conventional commercial banks and 178 Islamic banking windows of 11 conventional commercial
banks are also providing Islamic financial services in Bangladesh. At the end of the January-March 2020,
deposits and investment grew by 9.44% and 9.62% respectively, while excess liquidity increased by 3.72%
and remittance decreased by 26.51% compared to that of the last quarter.

• The market share of Islamic banks in entire banking sector has increased to 27.54 percent in terms of
deposits and 27.72 percent in terms of investments at the end of January-March, 2021. Market share in
terms of deposits and investments were 25.33 percent and 25.69 percent at the end of the preceding
quarter. The conversion of conventional Standard Bank and NRB Global Bank into Islamic banks has
contributed to the promotion of market share of Islamic banks. NRB Global Bank has been renamed as
Global Islami Bank.
Mobilization of deposits
Investment
Investment
Liquidity Status.
Global Islamic financial assets.
Islamic finance assets
by Jurisdiction/ Bangladesh
(IFSB 2020).
Concluding remarks.

• The investments made by Islamic banks in ideal Islamic modes like Mudaraba and Musharaka are
at a minimal level (below 2% of total investments). Given this, lslamic banks should pay more
attention in Research and Development (R&D) to develop proper guidelines and policies to
promote investments under Mudaraba and Musharaka modes. Islamic banks can also play
increase investments in microfinance programs and women enterprises towards poverty
alleviation and empowerment of the poor. It would promote welfare oriented banking as
directed by objectives of Islamic Shariah popularly known as Maqasid al Shariah.

• To address Shariah compliance issues of Islamic financial industry properly, adoption of Shariah
standards from International accounting and auditing organizations will be useful. In this regard,
Islamic banks and conventional banks having Islamic banking branches and windows may
undertake necessary action to be the member of Accounting and Auditing Organization for
Islamic Financial Institutions (AAOIFI).
Cont’d
• In addition, Bangladesh’s Islamic banking sector also needs to increase the application of
Shariah-compliant fintech to carry out financial transactions more efficiently.
• The outbreak of Covid-19 has created challenges for Islamic banking sector as
conventional banking sector. Islamic banking sector needs to properly implement
stimulus packages to mitigate adverse impacts of the pandemic and maintain its
development roles in the national economy by promoting saving-investment process and
trade activities further. In fact, the Covid-19 pandemic is a real test for Islamic banks for
maintaining resilience and employing usual commercial tools as well as social tools in
the recovery process of the national economy. Islamic banks should focus on support
for the poor and destitute through enhanced investments in small and micro enterprises
and increased expenditures in CSR activities.
 Knowledge and Learning

Products development and variation

Scope for Regulatory development
development Governance and Audit
in BD Employees’ and stakeholders’ knowledge

Public awareness
Various types of
Islamic financial institutions
Islamic financial institutions
Types of
Islamic Banking
1. Commercial Banks
DEFINITION
Under the Banking and Financial Institutions Act (BAFIA) 1989, a “bank‟ is
defined as “a person which carries on banking business”
Banking business” in turn is defined as:
“the business of:
(i) receiving deposits on current account, deposit account, savings account
or other similar account;
(ii) paying or collecting cheques drawn by or paid in by customers; and
(iii) provision of finance; or such other business as the Central Bank, with
the approval from the Minister of Finance, may prescribe”
Cont’d

The “provision of finance” under BAFIA includes:

the lending of money
leasing business
factoring business
the purchase of bills of exchange, promissory notes, certificates of deposits,
debentures or other negotiable instruments and
the acceptance of any liability, obligation or duty of any person.
 Commercial Banks _
ROLES AND RESPONSIBILITIES

• To actively promote and inculcate the saving habits, especially among the younger
generation. It is also an important strategy to fight unnecessary inflationary pressures on
the economy of the country.
• Commercial banks should also make their profit rates reasonable enough to make it
worthwhile for the average people to save for the financial well-being of the populace in the
country.
• Services and facilities that have been offered by the commercial banks should be readily
available at reasonable costs.
• Banks should educate the users on making the most out of the services and facilities
by giving simple pep talks and publishing pamphlets and brochures, clarifying on the
procedure and advantages of the various types of services and facilities available.
• As the financial intermediaries between the depositors and borrowers, banks have to
ensure that such funds lent out are for productive and economically viable purposes
and activities for the betterment of the country as a whole.
COMMERCIAL BANKS

History
Islamic banking and finance started in 1963 with the establishment of the
Mit Ghamr Savings Bank in Egypt, close in 1971
First commercial bank - Dubai Islamic Bank (DIB) was established in
1975.
Bank Islam Malaysia Berhad (BIMB) was the first Islamic bank in
Malaysia, established in July 1, 1983.

IBBL- 1985.
Functions
Islamic commercial banks play the role of intermediaries.
funds are bought by offering a variety of deposit products (Wadiah and/or qard-
based current account deposits, mudarabah-based savings account and
investment account deposits)
funds are sold through a variety of financing products (eg. equity- and debt-
based).
Like any conventional bank, Islamic commercial banks serve as intermediaries
between surplus and deficit units.
Functions
• Retail banking services such as acceptance of deposits, granting of loans and
advances and financial guarantees
• Trade financing facilities such as letters of credit, discounting of trade bills,
shipping guarantees, trust receipt and Banker‟s Acceptances (BA) Treasury
services such as foreign exchanges business, money market, investment and
etc.
• Cross border payment services such as money transfer service, international
payment facilities
• Custody services such as safe deposits and share custody
ISLAMIC BANKING PRODUCTS

Islamic equity-based financing products - Trustee partnership (mudarabah)

facility, joint venture (musyarakah) facility and declining partnership (musyarakah
mutanaqisah) facility.

Islamic debt-based financing products - cost-plus sale (murabahah) with

deferred payment (bai-bithaman-ajil) facility, leasing (ijara) facility, deferred delivery
sale (salam) facility, manufacture-sale (istisna) facility, recurring sale (istijrar) facility,
and benevolent loan (qard) facility.
ISLAMIC BANKING PRODUCTS

❑ Some of the few controversial financing products offered by Islamic

commercial banks are repurchase (bai’al-Inah), bill discounting (bai al-
dayn), tripartite resale (tawarruq), short-term cash loan and credit card
based on tawarruq and bai al-Inah.

❑ Islamic commercial banks also provide a range of fee-based services,

such as, opening of letter of credit (wakala) and letter of guarantee
(kafala).
2. Investment Banks.

Commercial banks act as retail businesses while merchant banks took

up the need for wholesale business. - involving large amounts, or
amounts too large for commercial banks to handle.
Expand the business to include underwriting and advisory services.
Fee based activities.
The current trend however, is for merchant banks to become investment
banks.
INVESTMENT BANKS

There are no dedicated Islamic merchant banks, although there are Islamic
investment banks (largely in Bahrain).
The main player in the Malaysian market place is Commerce International
Merchant bank (CIMB), operates as a bank within a bank.
CIMB‟s Islamic focus areas include Islamic debt and equity capital market,
private equity, private banking, asset and fund management and corporate finance.
Merchant/investment banks provide specialist expertise in banking and capital
market products and services to meet the demands of corporate and high net
worth clients.
 PRODUCTS AND SERVICES

Merchant or investment banks operate more so in arranging finance and in

advisory services.
Some of the more consumer oriented products which these types of wholesale
banks are:
Islamic securities
Islamic Asset-Backed Securitisation
Islamic structured finance
Syndication and other fee-based activities using acceptable Islamic principles
(BBA, Murabahah, Ijarah, Istisna‟, Wadiah, Mudarabah, Musyarakah, Qardhul
Hasan, Bai Al-Inah and kafalah.
Functions of Investment Banks

Revenue-generating
Activities: Support
Activities:
Primary market making
Secondary market Trading Clearing
Corporate restructuring Internal finance (funding)
Financial engineering Information services
Advisory services
Investment management
Venture capital
Consulting
Secondary Market Trading

Covers dealer activity and brokerage activities, with trading (speculation

and arbitrage) playing the important role.
Arbitrage is the buying and selling of assets between two or more markets
in order to profit from any differences in the prices quoted in these markets.
By buying in the lower-priced market and selling in a higher-priced market,
a arbitrager can make a profit from any disparity in prices between them.
Advisory Services
Include any activity in which an investment banks provide advice,
recommendations or opinions in exchange for a fee.
Investment banks offer a wide range of advice, e.g;
Restructuring of a clients‟ balance sheet for asset/liability management
purposes
Taking public companies private & taking private companies public
Assists in bankruptcy workouts
The investment bank is used to help expand or shrink the corporation
depending on industry conditions.
3. FINANCE COMPANIES

Cater consumer credit market.

Relied on hire purchase, leasing, small consumer
loans, personal loans as well as factoring.
Providing money, as for short-term loans.
Do not accept deposits.
Why do Finance Companies
Charge Higher

In order to provide credit, they first had to raise funds - by soliciting deposits,
largely from the household sector.
Different to the deposits with commercial banks which guaranteed by the
government, depositors of finance companies expected a higher return
relative to deposits at commercial banks, in view of the level of risks involved.
Hence, finance companies charged more for their loans.
The small businesses who failed to secure commercial bank loans approach finance
companies, where they were more often than not successful in obtaining the credit.
This meant that the loan portfolio of finance companies held riskier assets,
for which of course, finance companies charged higher rates relative to banks.
Functions

Meet the needs of consumer credit.

Finance companies were traditionally disallowed from offering cheque accounts.
Issue commercial paper and obtain funding from institutional investors
Financing cars, machinery and equipment, personal loans (credit cards in current
situation) and in some cases undertaking factoring services.
Products & Services

Leasing and hire-purchase.

Leasing basically represents a „divorce‟ between the ownership and use of
physical assets.
Hire purchase is an arrangement by which a hired article becomes the property of
the hirer, after a stipulated number of payments.
Finance companies use this vehicle to finance automobile, machinery and
equipment loans.
Ijarah is the mode of financing that is commonly applied in this situation.
Ijarah WaIqtina is the same as Ijarah except that the lessee can acquire
ownership of the asset by making installment payments.
 4. TAKAFUL OPERATORS

History
Established in the second century of the Islamic era when Muslim Arabs, while
expanding their trade into Asia, mutually agreed to contribute to a fund to protect
themselves in the event of mishaps or robberies along their numerous sea voyages (marine
insurance).
The development of takaful in modern times was initially undertaken in Sudan in 1979
and Malaysia in 1984.
The culmination of Takaful was encapsulated in 1985 when the Grand Counsel of Islamic
Scholars in Makkah, Saudi Arabia and Majma Al-Fiqh declared the conventional commercial
insurance as haram (forbidden) and only insurance based on the application of cooperative
principles is halal.
Functions
A type of joint guarantee insurance mechanism where a large group of people
pool their financial resources together, against possible losses.
It was developed because conventional insurance has certain features that
contradict with some of the essential values of Islamic financial contracts.
The concept of protection is deeply embedded in Islam through the endorsement
of the principle of compensation and group responsibility by the Holy Prophet
(pbuh).
A takaful contract must be based on principles of co-operation, protection,
mutual responsibility and must avoid acts of interest and uncertainty.
Products and Services

• Takaful works both as;

• 1)savings instrument where participants set their own target amount to
accumulate over a certain period:
• 2)a protection mechanism in which all participants guarantee each other
against events that would alter their financial status.
Types of Takaful Model

The operation of takaful within the business sector can be structured on a number of business
models as shown below:
• Wakalah model
• Mudharabah model
• Mudharabah + Wakalah model also known as hybrid model
• Waqf model
General Takaful Wakalah Model Flowchart
Family Takaful Wakalah Model Flowchart
General Takaful Mudharabah Flowchart
Family Takaful Mudharabah Flowchart
General Takaful Hybrid Model Flowchart
Family Takaful Hybrid Model Flowchart
Waqf Model
 Re-takaful

A takaful company pays premiums to a retakaful company so the retakaful company

assumes a portion of the takaful company‟s risks.
A takaful company can‟t bear the whole risk of covering its participants‟ claims. If
disaster strikes, the takaful fund may be depleted quickly and become insolvent, in which
case everyone (participants, the shareholders, and the takaful operator) loses.
By splitting the risk with a retakaful company, the takaful operator is much better able
to manage the company through periods of high claims.
Therefore, retakaful ensures the stability of takaful companies and the entire industry.
5. FUND MANAGEMENT COMPANIES

Manage the funds of their clients.

The need for Fund Management Companies;
Have no time to manage own funds
Lack of knowledge
Believe that fund managers have expertise to seek out better yields, at lower
risk.
Equity funds have been the most popular form of fund management company.
 Functions

Fund managers sell units of blocks Clients pay the stipulated amount pooled
together with the funds of other clients. This large pool is then invested by
specially trained personnel, who are supposed to be able to identify investments
with high yields and low risks.
Fund managers diversify the portfolio, thus further lowering the risk associated
with the investment.
Returns are distributed to the investors, after deduction of the administrative
charges incurred in managing the fund.
Products & Services

Approximately total 1749 Islamic funds worldwide by 2019.

The total assets managed through these funds currently exceed US$140 billion
by 2019, and is growing by 12-15 per cent per annum.
Some cater for their local markets, for example, Malaysia and Gulf based
investment funds.
Others clearly target the Middle East and Gulf regions, neglecting local markets
and have been accused of failing to serve Muslim communities.
Since the launch of Islamic equity funds in the early 90's, there have been the
establishment of credible equity benchmarks by Dow Jones Islamic Market Index
and the FTSE Global Islamic Index Series.
6. COOPERATIVE BANKS

Bank Kerjasama Rakyat was established in September 1954 under the Co-operative
Ordinance 1948.
To facilitate the expansion of the co-operative movement, co-operatives set up their
respective union banks to provide financial needs to their members.
On 28 September 1954, 11 of these union banks decided to merge and form Bank
Agong (Apex Bank).
In 1967, Bank Kerjasama Malaysia Berhad replaced Bank Agong with its membership
opening not only to co-operatives, but also to individuals.
On 6 January 1973, the name was changed to Bank Kerjasama Rakyat Malaysia Berhad
(known as Bank Rakyat).
Cont’d

On 8 May 1993, Bank Rakyat took a giant step towards becoming a Syariah
co-operative bank by introducing Islamic banking products at four of its
branches.
In a change of vision, Bank Rakyat became a full-fledged Islamic co-
operative bank in 2002.
Hence, with this major decision, Bank Rakyat marked another milestone in
history where it became the third bank to offer total islamic banking products
in Malaysia.
Functions
Providing financing facilities for agricultural purposes (production and marketing),
fishery, transportation, housing, business and other activities that are beneficial to its
members, and to promote thrift and savings.
Bank Rakyat‟s objective is to ensure satisfactory profit towards meeting dividend
payments to its members while charging reasonable profit rates that are not a burden
to its members.
Provide financing and accept deposits as well as produce satisfactory dividend
returns for the betterment of its members.
Ar-Rahnu.
Products & Services
Products & Services
7. SAVINGS INSTITUTIONS

Set up to act as repositories for small savers.

Lembaga Tabung Haji (Pilgrims Fund Board) – savings institution for
small savers aiming to undertake the haj, or pilgrimage.
Products & Services
LTH offers various impressive Islamic investment instruments – Bonds, Corporate
Notes, Government Investment Certificates, Mudharabah Bank Account and Bill of
Acceptance.
Tabung Haji's investment in subsidiaries is part of its strategy to participate directly in
potential and viable sectors – plantation, construction, real estate development, and service
sectors.
Tabung Haji has consolidated its 15 subsidiaries into seven core activities;
Plantations
Banking
Information Technology
Hospitality
Services
Real Estate Development and Construction
Marine
8. PENSION FUNDS

Caters for the time when one is retired.

Accumulate the periodic contributions of employees and employers and invest the pool of
funds in projects that are deemed secure, but which nevertheless yield an attractive return.
Investments undertaken by most pension funds/superannuation schemes are often
unacceptable to Muslims as the returns maybe from interest bearing accounts, or from activities
considered repugnant to Muslims.
Example
Britain (HSBC Asset Management) – employers make direct deductions from salaries
and wages, which may include the employers‟ own contribution and pass the funds to
HSBC, which in turn invests the funds on home loans, as well as Shariah compliant equities.
Any dividends generated from unacceptable business practices (e.g.: advertising agency's
profits that come from alcohol advertising), will be "purified".
Any non-Shariah compliant profits will be given to charity rather than being distributed
to investors, through the HSBC Community Foundation.
Cont’d
South Africa - Old Mutual Employee Benefits launched a product known as
the Pristine Retirement Scheme.
An integrated multiple employer retirement scheme, the Pristine Retirement
Scheme is the first fully Shariah compliant retirement scheme to be launched in
South Africa.
As in HSBC‟s case, Pristine invests the contribution in very selective Shariah
compliant investment. Employer are allowed to withdraw their contributions, plus
returns, after attaining retirement age.
9. ECONOMIC DEVELOPMENT INSTITUTIONS

Cater for the economic needs of the country.

State Islamic Religious Council
established through federal and state legislation.
relies on the Islamic Religious Department, which is a government department, available
in each state to provide administrative services and to implement the decisions of the
Councils.
The Council is mainly a policymaking and supervisory body, which has a major effect on
the operation of zakat in Malaysia.
The Council is responsible to the Sultan or Ruler of each state.
Functions
Zakat collection and distribution
Personal and societal adherence to matter of the faith such as;
Prayers
Fasting
Marriages
Divorces
Islamic education
Shariah law
Conversion
Muslim welfare
Muslim festivals.
Pusat Pungutan Zakat
The main responsibility of PPZ is to collect zakat on wealth as well as zakat on
itself.
PPZ is the first zakat office to operate in a new corporate style. It was mandated
for the collection of zakat in Malaysia.
The five main objectives of the centre are:
To improve and increase zakat collection.
To facilitate zakat payers in performing their zakat obligation.
To provide information on the obligation to pay zakat.
To introduce computerized zakatc ollection systems.
To introduce corporate work style in zakat collection management.
Cont’d
However, PPZ is not responsible for zakat distribution, which is done by
other agencies or sections of the Council.
Talks and reminders through the media and through direct mailing is
seen as the way to increase the number of zakat payers annually, and
also to remind them of their obligation towards the needy.
❖ Regulatory bodies and standard providers
for Islamic financial institutions around the globe

- AAOIFI
- BNM
- IFSB
- IILM
- BSAS
- IIRA
- IIFM.
AAOIFI
AAOIFI Shariah Standards

Background

Recommended
to follow by BB.
CSAA
CIPA.
Characteristics of
AAOIFI Shariah Standards

Based on the 4 major schools of Islamic

Jurisprudence, Fiqh Academies and Comprehensive and inclusive of
resolutions of Shariah Committees of Shariah aspects
Islamic financial Institutions.

Adopted a more conservative approach They serve as the backbone for

compared with other Standards (e.g: the Accounting Standards.
Malaysia).

Focused on Shariah aspects not the Blocking the doors of hiyal (legal
operational ones. stratagem)

Based on contemporary financial Written based on the actual

procedures of Shariah contracts
products
Adoption of the view that
Acknowledgment of the legal represent the majority of Muslim
environment and local regulations Scholars (past and present).

Occasionally, the view of the minority is adopted if

found suitable to the contemporary financial
environment (employment of maslalah).
Common features of AAOIFI
debt-based Shariah Standards

Combination of
contracts,
which are binding.

Prohibition of late
Prohibition of ibra’
payment
(discount on early
charges as income,
Payment) and
and all amounts are
binding mua’wadah
due..

Prohibition of
restructuring and Prohibition of debt
refinancing with extra trading and ‘inah
payment.
Common features of AAOIFI
equity-based Shariah Standards
(mudarabah and musharakah).

Based on Amanah
Loss shall be
according to the (trust)
capital
contribution ratio

Profit distribution
Profit is not
can be on any ratio
guaranteed
agreed thereon

Profit and loss

Capital is not
sharing
guaranteed
(musharakah)

Profit sharing
(mudarabah),
loss is borne by
capital provider
Shari’ah
Resolutions of the
Central Bank of
Malaysia (BNM)
BNM STANDARDS
IFSB
Standards
IILM
Malaysia based …

The International Islamic Liquidity Management

Corporation (the IILM) is an international organization
established by central banks, monetary authorities and multilateral
organizations to create and issue Shari’ah-compliant financial
instruments to facilitate effective cross-border Islamic liquidity
management.

Established on 25 October 2010, the IILM aims to enhance cross-

border investment flows, international linkages and financial stability
by creating more liquid Shari’ah-compliant financial markets for
institutions offering Islamic financial services.
BSAS is a commodity trading platform specifically dedicated to facilitate
Islamic liquidity management and financing by Islamic financial
institutions.

Initiated as a national project, BSAS exhibits the collaboration of Bank

Negara Malaysia (BNM), Securities Commission Malaysia (SC), Bursa
Malaysia Berhad (Bursa Malaysia) and the industry players in support of the
Malaysia International Islamic Finance Centre (MIFC) initiative. It receives
close co-operation and strong support of the Ministry of Plantation
Industries and Commodities through the Malaysian Palm Oil Board (MPOB),
Malaysian Palm Oil Association (MPOA) and Malaysian Palm Oil Council
(MPOC).

The fully electronic web based platform provides industry players with an
avenue to undertake multi commodity and multi currency trades from all
around the world.

All businesses and activities of BSAS are managed by Bursa Malaysia

Islamic Services Sdn. Bhd. (BMIS), a wholly-owned subsidiary of Bursa
Malaysia which is regulated, transparent and fully Shariah compliant.
The Islamic International Rating Agency (IIRA) has been set up to provide
independent assessments to issuers and issues that conform to principles of
Islamic finance.

IIRA's special focus is on development of local capital markets, primarily in

the region of the Organization of Islamic Countries (OIC) and to provide
impetus through its ratings to ethical finance, across the globe.

IIRA was founded as an infrastructure institution for the support of Islamic

finance as conceived by the Islamic Development Bank (IDB). This puts IIRA
in league with system supporting entities like AAOIFI and IFSB. The IDB
remains a prominent shareholder, and maintains oversight through its
nominee, as Chairman to the Board of Directors.

Headquartered in the Kingdom of Bahrain, IIRA commenced operations in

2005 and launched its series of conceptually distinctive methodologies,
beginning 2011. IIRA believes that the strength of Islamic finance lies in its
commitment to fairness. This renders the manner in which a transaction is
carried out, as important as the transaction itself. IIRA's specialized focus on
organizational governance and conduct of Shariah, augments the rating
process, and incorporates the unique features of Islamic finance in a way
that broadens the quality perspective.
 IIFM is a global standard-setting body of the Islamic Financial Services Industry (IFSI) focusing on
standardization of Shari’ah-compliant financial contracts and product templates.
INTERNATIONAL ISLAMIC
FINANCIAL MARKET ( IIFM is hosted by the Central Bank of Bahrain (CBB) and was established under Royal
Decree No (23) Year 2002 of the Kingdom of Bahrain as a neutral and non-profit
international Islamic infrastructure institution created by the collective efforts of the CBB (formerly
Bahrain Monetary Agency), Islamic Development Bank, Bank Indonesia, Bank Negara Malaysia
(delegated to Labuan Financial Services Authority), Central Bank of Sudan and Brunei Darussalam
Central Bank (formerly Autoriti Monetari Brunei Darussalam).

Besides the Founding and Permanent Members, IIFM Board of Directors consist of Islamic and
international banks namely Kuwait Finance House, Dubai Islamic Bank, Saudi National Bank, Bank
ABC Islamic, Gulf Finance House, Standard Chartered Saadiq, Credit Agricole CIB and National
Bank of Kuwait.
IIFM is also supported by certain regulatory and government bodies such as State Bank of Pakistan,
National Bank of Kazakhstan and DIFC Authority as well as by a number of international and
regional financial institutions and other market players active in Islamic finance.
Value Proposition

Focus on providing well defined services to the IFSI as follows:

I. Publish practical and ready-to-use globally standardized Shari’ah-compliant
Financial Documentation, Product Confirmations and related Guidance Notes
which are supported with the IIFM Shari’ah Board approval “Pronouncements”
as well as jurisdiction specific Legal Opinions.

II. Create industry awareness and share technical knowledge on IIFM Standards by
organizing specialized seminars, technical workshops and standardization specific
industry consultative meetings

III. Practical Training for Professionals on IIFM Published Standards

IV. Publish annual Sukuk Report and periodic Concept Papers on specific topics
Challenges and
way forwards for Islamic finance

1. Identity Crisis
2. Form versus Substance
3. Products innovation or replication
4. Shari’ah standardization and harmonization across the globe
5. Human capital development
6. Governance
7. Maqasid al-shari’ah
8. Trust and confidence