Islamic Finance and Banking: Modes of Finance

This Islamic finance and banking course gives an overview of the Islamic modes of finance. In this course, you will learn about Murabaha, Ijarah, Salam, Iistisjna, and Istisjrar modes of finance and their applications, management, the risks involved, and the mitigation measures.

You will also learn about the nature of Islamic banking systems and categories of Islamic Financial Institutions (IFIs).

No previous knowledge is needed.

Week 1 - A Framework for the Islamic Financial System-Part 3
Introductory overview of Islamic finance and banking

• Leasing or Ijarah Contracts
• Conventional vs Islamic Leasing
• Issues in Modern Ijarah Contracts
• The Concept of Ijarah Sukuk
• Deferred Delivery or Salam Contracts
• The Istisna‘a Contract
• The Istijrar Contract

Week 2 - A Framework for the Islamic Financial System-Part 4
Introduction

• Shirkah and its Two Categories
• The Concept of Mudarabah
• The Concept of Musharakah
• The Wadiah Wad Dhamanah Deposit
• The Qard-ul-Hasan Deposit
• The Concept of Wakalah (Agency)
• The Concept of a Tawarruq Contract
• The Concept of a Ju’alah Contract

Week 3 - Islamic Banking System and its Financial Products
Introduction

• Financial Intermediaries: Their Three Main Functions
• Intermediation Contracts Permitted by the Sharī‘ah
• Trust-based Intermediation Contracts
• Security-Based Intermediation Contracts
• Business Models for Islamic Financial Institutions (IFIs)
• Theoretical Perspective of an IFI’s Balance Sheet
• Categories of IFIs

Week 4 - Controversial Financing and Fee-based Products
Introduction

• Bai’ al-Einah (Repurchase)
• Bai’ al-Dayn (Bill Discounting)
• Tawarruq
• The Use of Wakalah to Provide a Letter of Credit
• The Use of Kafalah to Provide a Letter of Guarantee
• Other Fee-based Services