Islamic Banking and Finance: New Perspectives on Profit Sharing and Risk
Munawar Iqbal, David T. Llewellyn
Edward Elgar, Jan 1, 2002 - Business & Economics - 250 pages
It is a well-known fact that conventional commercial banks provide financial intermediation services on the basis of interest rates on assets and liabilities. However, since interest is prohibited in Islam, Islamic banks have developed several other modes through which savings are mobilized and passed on to entrepreneurs, none of which involve interest. Islamic Banking and Finance discusses Islamic financial theory and practice, and focuses on the opportunities offered by Islamic finance as an alternative method of financial intermediation. Key features of profit-sharing (as opposed to debt-based) contracts are highlighted, and the ways in which they can facilitate improved efficiency and stability of a financial system are explored.
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an Islamic perspective
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actual profit adverse selection agency problems agent assets asymmetric information audit Bank Muamalat Barkat behaviour borrower cause cent chapter Chi-square clients co-invest collateral Contingency table conventional banks cooperative criteria debt contract decision decision-making depositors deposits Descriptive statistics developed entrepreneur expected factors financial contracts financial system firm gharar hypothesis IFIs important incentive incentive-compatible incidence of agency increased India information asymmetry instalment sales interest interest-free investment involved Iran Islamic banks Islamic Development Bank Islamic Economics Journal jualah Khan leasing loans modes of financing monitoring costs moral hazard problem mudarabah contracts murabahah musharakah Muslim Muslim Funds Najibabad outcome Panel partnership party portfolio problems in mudarabah production profit-sharing contract profit-sharing modes profit-sharing ratio profit/loss-sharing purchase ranking reduce relationship reporting risk Saudi Arabia Saudi informal investors Shan ah share Shartah short-term Spearman correlation transactions uncertainty variables Venture Capital