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“An Introduction to Islamic Finance” will solve all confusions.
This book today in my hand is by Mufti Muhammad Taqi Usmani entitled “An Introduction to Islamic Finance” was published in 1998. The book is actually about the principles of Islamic Finance in depth and the main difference in Islamic and Conventional banking. The author is a Hanafi Islamic Scholar and has remained the chairman and member of sharia supervisory boards of different Islamic banks in different parts of the world. He is an expert in the fields of Islamic Jurisprudence, economics, Tassawuf and Hadith.
In the book author has successfully drawn attention that modes of financing are being used by the Islamic banks and financial institutions since last two decades, but all these instruments are not the substitutes of interest in the strict sense. It will also be wrong to presume that they may be used exactly in the same style as current conventional product is used. The instruments have their own set of principles, philosophy and conditions without which it is not allowed in Shari‘ah to use them as modes of financing.
The present book is a compiled collection of author’s previous different articles. He has discussed some preliminary points for Islamic banking at the beginning of the book. The author aimed to provide basic information about the principles and concepts of Islamic finance, with special reference to the modes of financing like Musharka, Mudarba, Murabaha, Ijara, Salam& Istisna, used by the banks and non-banking financial institutions. He has tried to explain the basic concept underlying these instruments. The compulsory requirements for their acceptability from the Shari‘ah standpoint, and the correct method of their application in contemporary banking system. He has also dealt with the practical issues involved in the application of the instruments and their possible solutions in the light of Quran and Sunnah.
I have observed it very helpful because it is written in simple English. Each financing model is explained in very detail including its types, profit calculation, termination time and its practice in contemporary banks
I hope it will facilitate to understand the basic principles of Islamic finance and the main points of difference between conventional and Islamic banking. I will prefer this book for the beginners of the Islamic finance. It is also easily understandable for those who do not belong to field of Islamic Finance. It is hoped that this brief discussion will open new horizons for the thinking of Muslim jurists and economists and will help them implementing a true Islamic economy.