Search results for: Islamic Law of Contract

Authors: Shabina Khan, Rukhsana Tabassum Syeda

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Islamic banking is a finance system based on the principles of Shariah law. Charging interest is prohibited in Islam. Instead of charging interest the lender shares some part of profit or loss with the borrower, there is a great need for Islamic banking after the collapse of leading Wall Street institutions notably Lehman Brothers and other global finance institution, economic recession, Islamic banking have emerged as an alternative to conventional banking. Islamic banking is growing at the rate of more than 15% not only in Muslim countries, but also in secular and modern industrialized countries like U.K. Japan, France, Singapore, Hongkong. India with a total population of about 184 million about $ 1.5% Muslim deposit interest is lying unclaimed in different Indian banks, as there are no banks based on shariah laws approved by the RBI. When we take the example of Kerala state in India, almost 26.2% population is Muslim. Thus thousands of crore of rupees earned in interest is suspended accounts. In Kerala alone Rs. 40,000 crore and in Jammu and Kashmir Rs. 50,000 crore as interest earned on deposit of Muslim are lying unclaimed. By 2050, Indian Muslim population would be the largest in the world. It will surpass Indonesia. The Muslim population is likely to exceed 18% i.e. 310 mn. Muslim population will increase four percentage points from 14% to 18%. This paper studies the problems and prospects of Islamic banking in India. India has 29 states and Maharashtra is one of them. In the Maharashtra state is Aurangabad district. According to census 2011, Aurangabad city population is 51.07% is Hindu .Muslim is the second most popular religion with approximately 30.79. There are branches of Islamic banking run by Anjuman e Islam in many parts of India by the name of Al- Khair Baitul Mal which is a nongovernment organization. Its branch is in Aurangabad. The main objectives of this study are: 1. To find the scope of Islamic banking. 2. To study and analyze the prospects and problems of such organizations in Aurangabad district. 3. To create awareness about Islamic banking. 4. To study the functions of the organizations based on Islamic banking rules. 5. To encourage non-Muslims to invest in Islamic banking. The methodology used will be primary as well as secondary data. This is helping the weaker section of the society to obtain sources for trade and business. This paper finds that there is sufficient scope of Islamic banking in the region.

Keywords: Aurangabad, conventional banking, Islamic banking, Riba (interest)

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Authors: Hamed Homaei, Iraj Mahdavi, Ali Tajdin

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One of the main concerns of miners is to increase the quality level of their products because the mining metals price depends on their quality level; however, increasing the quality level of these products has different costs at different levels of the supply chain. These costs usually increase after extractor level. This paper studies the coordination issue of a decentralized three-level supply chain with one supplier (extractor), one mineral processor and one manufacturer in which the increasing product quality level cost at the processor level is higher than the supplier and at the level of the manufacturer is more than the processor. We identify the optimal product quality level for each supply chain member by designing a revenue sharing contract. Finally, numerical examples show that the designed contract not only increases the final product quality level but also provides a win-win condition for all supply chain members and increases the whole supply chain profit.

Keywords: three-stage supply chain, product quality improvement, channel coordination, revenue sharing

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Authors: Danielle Jablanski

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This article addresses the use of drone strikes under international law and the intersection between Islamic law and current terrorist trends worldwide. It breaks down the legality of drone strikes under international law and dissects certain aspects of their usage in modern warfare; i.e. concepts of directly participating in hostilities and the role of CIA operators. The article then looks at international paradigms of law enforcement versus the use of military force in relation to terrorism. Lastly, it describes traditional aspects of Islamic law and several interpretations of the law today as applied to widespread campaigns of terrorism, namely that of the recent group ISIS or ISIL operating between the battlegrounds of Iraq and Syria. The piece concludes with appraisals for moving forward on the basis of honing in on reasons for terrorism and negative opinions of solely military campaigns to dismantle or disrupt terror organizations and breeding grounds.

Keywords: international law, terrorism, ISIS, islamic law

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Authors: Ahmad Syauqi

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This paper analyzes the permissibility of demonstrations against a leader's decision, policies, as well as statements against Islamic values from an Islamic point of view. Recorded at the end of 2016, a large demonstration in Jakarta involving many people, mostly from Muslim society against the former Governor of Jakarta, Basuki Tjahaja Purnama, was considered a form of harm to the value of harmony and the unity of religious communities in Indonesia. Hence, this paper aims to answer the question that became a tough discussion and a long debate among Indonesian Muslims after an immense demonstration known as the 212 movements, ‘how exactly Islam sees such act of demonstration?’. Is there any particular historical source in Islamic history that mention information related to demonstration? A phenomenological qualitative method was implemented throughout the process of this research to study the perspective of various Muslims scholars by reviewing, and comparing their opinions through the classical source of Islamic history and Hadith literature. One of the main roots of this extensive debate is due to the extremist group, which bans all forms of demonstration, assuming that such acts had come from the West and unknown culture in the Islamic history. In addition, they also claim that all the demonstrators are Bughat. While some other groups, freely declare that demonstration can be done anytime and anywhere, without specific terms and regulations associated. The findings of this research illustrate that the protests which we now know of today, in terms of demonstration had existed since ancient times, even from the time of the prophet Muhammad (peace be upon him). This paper reveals that there is a strong evidence that demonstration is justified in Islamic law and has a historical root. This can, therefore, be a proposition of such permissibility. However, there are still a number of things one has to be aware of when it comes to the demonstration, and clearly, not all demonstrations are legal from the Islamic perspective.

Keywords: Basuki Tjahaja Purnama, demonstration, Muslim scholars, protest

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Authors: Nasurullah Qureshi

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Shaikh Ahmad Sirhindi Mujadid Alif Thani (1564-1624) and his philosophy had influenced sub-continent as the whole; its rulers and nation. In his reign, he convinced the rulers toward Islamic way of life and succeed in his goal. After his death in 1624, his family consecutively produced prominent scholars to present. Some of them moved to Afghanistan and Pakistan's cities i.e., Jalalabad, Qandhar, Peshawar, Queta, Shikarpur, Hyderabad, and Sehwan. They played a vital role in their areas and transmitted spiritual and legal Islamic teachings to people. This research is aimed to elaborate efforts of the family's Sindh settled branch from 1898-present in fields of politics and Islamic education. Their link with Shaikh Ahmad Sirhindi will be provided in the introduction. After that, the work will explain their scholarly published work briefly in different fields of Islamic studies such as Quran exegeses and its translation in Sindhi language, Hadith and its sciences, Islamic Jurisprudence, Sufism and etc. In addition, their political role will be briefly discussed in the research throughout the period, especially their noticeable role in the separate homeland for Muslims in the subcontinent. Furthermore, the impact of their scholarly work, political influence and spirituality will be enlightened. Lastly, the research will present the critical viewpoint on their struggle.

Keywords: Shaikh Ahmad Sirhindi, Sirhindi scholars, Sindh, Sufism

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Authors: Md Abu Saieed

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Crafting and implementing public policy is one of the indispensable works in any form of state and government. But the policy objectives, methods of formulation and tools of implementation might be different based on the ideological nature, historical legacy, structure and capacity of administration and management and other push and factors. Public policy in Islamic economic system needs to be based on the key guidelines of divine scriptures along with other sources of sharia’h. As a representative of Allah (SWT), the governor and other apparatus of the state will formulate and implement public policies which will enable to establish a true welfare state based on justice, equity and equality. The whole life of Prophet Muhammad (pbuh) and his policy in operating state of affairs in Madina is the practical guidelines for the policy actors and professionals in Islamic system of economics. Moreover, policy makers need to be more meticulous in formulating Islamic public policy which meets the needs and demands of contemporary worlds as well.

Keywords: formulation, Islam, public policy, policy factors, Sharia’h

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Authors: Abdul Kader

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This paper attempts to investigate several contributory factors to recent volatility in the Islamic Banking sector of Bangladesh. In particular, the study explores corporate governance, credit management, credit regulations, inept board of directors, using religious sentiment as a means to deceive general people, and the degree of political interference as potential contributory factors. To find the correlation among different variables, semi-structured questionnaires were distributed among the clients, bank managers, some Banking scholars and ex-members of the board of directors of three Islamic Banks in Bangladesh. Later, ten interviews were collected from key informants to gain in-depth information about the present mismanagement of Islamic Banks in Bangladesh. After then, data were analyzed using statistical software and substantiated by secondary sources like newspapers, reports and investigative reports aired in screen media. The paper found a correlation between almost all contributory factors and recent unstable conditions in the Islamic banking sector. After performing regression analysis, this paper found a more significant relationship between some of the contributory factors with Banking volatility than others. For instance, credit management, inept board of directors, depriving customers of proving no profit in the name of business—no interest-- and political interference have a strong significant positive correlation with the present poor condition of Islamic Banking. This paper concludes that while internal management is important in recovering the losses, the government needs to ensure framing better policy for the Islamic Banking system, Central Bank needs to supervise and monitor all Islamic banks meticulously and loan receivers must go through the impartial evaluation and approved by the representatives of the Central Shariah Board. This paper also recommends that there is a need to strengthen the auditing system and improve regulatory oversight of the Islamic Banks in Bangladesh. Policy recommendations that this paper put forward could provide an outline for dealing with the existing challenging condition of Islamic Banks and these could be applied to similar problems in other countries where the Islamic Banking model exists.

Keywords: Islamic bank, volatility in banking sector, shariah law, credit management, political interference

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Authors: Sadia Bibi, Karim Ullah

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Islamic banks have excess liquidity, which needs proper management to earn a high rate of return on them to remain competitive. However, they lack assets-backed avenues and rely on a few sukuks, which led them to liquidity management issues. Financial engineering comes forward to innovate and develop instruments for the requisite financial problem. Still, they face many challenges, explored in the context of liquidity management in Islamic banks. The rigorous literature review shows that Shariah compliance, competition from the conventional banks, lack of sufficient instruments, derivatives are still not accepted as legitimate products, the inter-bank market being less developed, and no possibility of lender of last resort is the six significant constraints to financial engineering for liquidity management of Islamic banks. To further explore the problem, a multiple case study strategy is used to extend and develop the theory with the philosophical stance of social constructivism. Narrative in-depth interviews over the telephone are conducted with key personnel at treasury departments of selected banks. Data is segregated and displayed using NVivo 11 software, and the thematic analysis approach identifies themes related to the constraints. The exploration of further constraints to financial engineering for liquidity management of Islamic banks achieves the research aim. The theory is further developed by the addition of three more constraints to the theoretical framework, which are i) lack of skilled human resources, ii) lack of unified vision, and iii) lack of government support to the Islamic banks. These study findings are fruitful for the use of the government, regulatory authorities of the banking sector, the State Bank of Pakistan (Central Bank), and the product design & development division of Islamic banks to make the financial engineering process feasible and resolve liquidity management issues of Islamic banks.

Keywords: financial engineering, liquidity management, Islamic banks, shariah compliance

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Authors: Mornay Roberts-Lombard

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Consumers’ perceptions of value are crucial to ensuring their future commitment and behavioral intentions. As a result, service providers, such as Islamic banks, must provide their customers with products and services that are regarded as valuable, stimulating, collaborative, and competent. Therefore, the value provided to customers must meet or surpass their expectations, which can drive customers’ commitment (affective and calculative) and eventually favorably impact their future behavioral intentions. Consequently, Islamic banks in South Africa, as a growing African market, need to obtain a better understanding of the variables that impact Islamic banking customers’ value perceptions and how these impact their future behavioral intentions. Furthermore, it is necessary to investigate how customers’ perceived value perceptions impact their affective and calculative commitment and how the latter impact their future behavioral intentions. The purpose of this study is to bridge these gaps in knowledge, as the competitiveness of the Islamic banking industry in South Africa requires a deeper understanding of the aforementioned relationships. The study was exploratory and quantitative in nature, and data was collected from 250 Islamic banking customers using self-administered questionnaires. These banking customers resided in the Gauteng province of South Africa. Exploratory factor analysis, Pearson’s coefficient analysis, and multiple regression analysis were applied to measure the proposed hypotheses developed for the study. This research will aid Islamic banks in the country in potentially strengthening customers’ future commitment (affective and calculative) and positively impact their future behavioral intentions. The findings of the study established that service quality has a significant and positive impact on perceived value. Moreover, it was determined that perceived value has a favorable and considerable impact on affective and calculative commitment, while calculative commitment has a beneficial impact on behavioral intention. The research informs Islamic banks of the importance of service engagement in driving customer perceived value, which stimulates the future affective and calculative commitment of Islamic bank customers in an emerging market context. Finally, the study proposes guidelines for Islamic banks to develop an enhanced understanding of the factors that impact the perceived value-commitment-behavioral intention link in a competitive Islamic banking market in South Africa.

Keywords: perceived value, affective commitment, calculative commitment, behavioural intention

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Authors: Fahimeh Ghorbani, Alam Saleh

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Ideology, politics and art have always been omnipresent patterns of Islam since its early age. The Islamic empire, expanded from China to Andalusia, has instrumentalized art and architecture to enhance political legitimacy of different dynasties or states throughout its history. Quranic verses utilized to convey ideological messages in the major mosques and mausoleums. Iranians had already been employing art and architecture to propagate their political legitimacy prior to Islam. The land of Iran and its art with strong civilizational pre-Islamic history has been profoundly politicized since the rise of Islam in the region. Early Islamic period in Iran has witnessed introduction of a new architectural language, new formulas for spatial configuration in built spaces, as well as new system of architectural decoration. Studying Iran’s Early Islamic architecture helps in better understanding the process of socio-political identity making of Iranian-Islamic culture, and thus art and architecture. This period also set the stage for formation of glorious architectural movements through Persianate world in later periods. During the Early Islamic period in Iran, the innovative combination of Islamic ideology and Iranian Architecture created formidable ideological tools in politicizing art in the region and beyond. As such, this paper aims to investigate the political history and architectural legacy from late Sassanid to Early Islamic period, delves into the ways in which Early Islamic architecture played role in transforming Persian concepts of kingship, administration, and social organization. In so doing, the study focuses on the Perso-Islamic architectural synthesis under the Samanids and Seljuk dynasty as case studies. The paper also explores how the newly introduced Islamic architecture has been employed to address the question of political legitimacy and to propagate states’ political agenda in early Islamic Iran (650-1250). As for the existing literature, despite its uniqueness and significance, Early Islamic architecture of Iran has received little scholarly attention. However, there exists a sizeable body of scholarship on socio-historic condition of the land of Iran during Early Islamic period which provide a solid base for the project. Methodologically speaking, the authors look into the subject through various lenses. They will conduct historic and archival research in libraries, private collections, and archives in Iran and the related neighbouring countries in Persian, Arabic and English. The methods of visual and formal analysis are applied to examine architectural features of the period. There are also a high number of intriguing, yet poorly examined, published and unpublished documents, old plans, drawings and photos of monuments preserved in Cultural Heritage of Iran Organization which will be consulted.

Keywords: Iran, Islamic architecture, early Islamic Iran, early Islamic architecture, politicized art, political legitimacy, propaganda, aesthetics

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Authors: Lian Kösters, Wendy Smits, Raymond Montizaan

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The number of solo self-employed in the Netherlands has been increasing for years. The relative increase is among the largest in the EU. To explain this increase, most studies have focused on the supply side, workers who offer themselves as solo self-employed. The number of studies that focus on the demand side, the employer who hires the solo self-employed, is still scarce. Studies into employer behaviour conducted until now show that employers mainly choose self-employed workers when they have a temporary need for specialist knowledge, but also during projects or production peaks. These studies do not provide insight into the employers’ considerations for different contract types. In this study, interviews with employers were conducted, and available literature was consulted to provide an overview of the several factors employers use to compare different contract types. That input was used to set up a vignette study. This was carried out at the end of 2021 among almost 1000 business owners, HR managers, and business leaders of Dutch companies. Each respondent was given two sets of five fictitious candidates for two possible positions in their organization. They were asked to rank these candidates. The positions varied with regard to the type of tasks (core tasks or support tasks) and the time it took to train new people for the position. The respondents were asked additional questions about the positions, such as the required level of education, the duration, and the degree of predictability of tasks. The fictitious candidates varied, among other things, in the type of contract on which they would come to work for the organization. The results were analyzed using a rank-ordered logit analysis. This vignette setup makes it possible to see which factors are most important for employers when choosing to hire a solo self-employed person compared to other contracts. The results show that there are no indications that employers would want to hire solo self-employed workers en masse. They prefer regular employee contracts. The probability of being chosen with a solo self-employed contract over someone who comes to work as a temporary employee is 32 percent. This probability is even lower than for on-call and temporary agency workers. For a permanent contract, this probability is 46 percent. The results provide indications that employers consider knowledge and skills more important than the solo self-employed contract and that this can compensate. A solo self-employed candidate with 10 years of work experience has a 63 percent probability of being found attractive by an employer compared to a temporary employee without work experience. This suggests that employers are willing to give someone a less attractive contract for the employer if the worker so wishes. The results also show that the probability that a solo self-employed person is preferred over a candidate with a temporary employee contract is somewhat higher in business economics, administrative and technical professions. No significant results were found for factors where it was expected that solo self-employed workers are preferred more often, such as for unpredictable or temporary work.

Keywords: employer behaviour, rank-ordered logit analysis, solo self-employment, temporary contract, vignette study

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Authors: Farshad Negintaji, Hamid Reza Zeraat Pisheh, Mahshid Ghanea, Zahra Khalifeh, Mohammad Bagher Rahami

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This study has been examined the anatomical components of mosques with the approach of attending to Islamic wisdom and investigated the distinction between the anatomical design of mosques (traditional and modern) by considering the category of perception in Islamic architecture. To this end, this article by reviewing the theoretical and empirical literature of mosques' anatomy and the role of anatomy on the architectural design of Iranian mosques by examining the quantitative and qualitative indicators and in order to understand and identify the anatomy of mosques, indicators such as: entrance, portico, minarets, domes, bedchamber and pool have been used. The aim of this study has been to investigate materials, the functional properties, technology, sizes and fitness of (traditional and modern) mosques. For this purpose, a questionnaire was prepared in which the anatomical and spiritual elements of the mosque shape have been questioned. Research is related to field and is of descriptive, analytical and inferential type and quantitative and qualitative indicators have been examined.

Keywords: Islamic wisdom, Islamic architecture, mosque anatomy, the minaret, dome, bedchamber, entrance, pool, perception

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Authors: K. C. Iyer, Yogita Manan Bindal, Sumit Kumar Bakshi

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Disputes and litigation are becoming inherent to the construction industry in India, and despite construction being one of the major drivers of growth, there have not been many reforms in the government construction contracts. Many of the disputes arising from the government contracts, can be avoided by the proper drafting of contracts and their administration. This study aims to 1) identify the best practices in the construction contract as reviewed from the research papers and additional literature on contract management, 2) obtain perspectives from the industry experts on the implementation of these best practices with regards to likely challenges and relative benefits for implementing the best practices in construction contracts. The best practices for disputes arising due to delay events have been identified through extensive literature survey. The industry perspective is gathered by way of a questionnaire survey to understand the applicability of the identified best practices, the benefits that are likely to be obtained and the challenges that are likely to be faced in the implementation of these practices. The study concludes with the recommended best practices that can be implemented based on the perspectives obtained from the survey. The findings of the study can be used by the industry professionals while drafting construction contracts with a view to avoid disputes related to delay events.

Keywords: best practices, construction contract, delay, dispute avoidance

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Authors: Mohammad Saif

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In the post-Westphalianworld order, the concept of sovereignty has been a fundamental area of inquiry in Political Science, International Relations, and International Law. Modern Islamic political thought has also dedicated a fair share of debate on the subject. The debate fundamentally revolves around the ‘ontological differentiation’ between western and Islamic political thought. While the centrality of the individual in western political thought regards the individual as the center of universe, Islamic Political thought provides that space to God. The modern liberal democratic principles suggest sovereignty as one of the major attributes of modern nation state; Islamists regard sovereignty as an attribute of God. However, the position regarding God’ssovereignty in Islamic political thought is not coherent in conception. Some scholars regard such a position as ‘the political interpretation of Islam’. This paper is an attempt to first analyze the fundamental discord between two rival political ideologies (western and Islamic), and then forward a debate on the subject of sovereignty in South Asian Islamic Political thought, particularly between Syed Abul Ala Maududi (ideological father of modern islamist movements) andHifzurrahmanSeoharvi (lesser known in Academia but highly influential in shaping Deobandi position of principles related to political nature of Islamic theology). Maududi regardssovereignty as an attribute of God and the rulers as subservient to Gods will, Seoharvi suggests that God's sovereignty does not entail that the caliph or amir cannot be a ruler or hakim, nor can his command or hukum be an order. Certain references have also been made to contemporary scholars like Sayidd Qutub, Rashid al Ghanouchi, who in one way or the other have contributed to the debate on ‘sovereignty in Islamic thought’.

Keywords: nation state, sovereigty, sovereignty of God (Hakimmiyah), deoband

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Authors: Vijay Kumar, Ron Bird

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The study investigates the effect of bank-specific, industry-specific and macroeconomic variables on the profitability of conventional and Islamic banks. Our sample comprises 1,781 bank-year observations of 205 banks from four countries in the Asian region for the period 2004-2014. Our results suggest that credit quality, cost management and bank size are the keys factors that contribute positively to bank profitability in Asia. The banks with high non-performing loans and high cost-to-income ratio are more likely to be exposed to losses. The impacts of the bank-specific variables are stronger than are the industry-specific and macroeconomic variables. We find that Malaysian banks are the least profitable compared to the banks in Bangladesh, Indonesia and Pakistan. There is strong evidence to suggest that conventional banks are more profitable than Islamic banks. Our results suggest that the impact of capital adequacy ratio and bank size and loan to deposit ratio vary across Islamic and conventional banks and across different subsamples.

Keywords: capital adequacy ratio, Islamic banks, non-performing loan ratio, ownership

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Authors: Umar Sheikh Tahir

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This paper focuses on the historiography of the relationship between Logic and Arabic grammar in the Muslim Medieval Ages (a period between 750 and 1100/ 150 and 500 Ah). This sensation appears in the famous debate among many others between grammarians represented by abū Sa'id al-Sairafī and logicians represented by abū Bishr Mattā on Logic and its validity. This incident took place in Baghdad around 932 AD. However, this study singlehandedly samples these debates as the base for the contributions of Islamic philosophers to philosophy of language as well as Epistemology. The question that shapes this research is: What is the intellectual development for Muslim thinkers to philosophy of language in regards to this debate? The current research addresses the Arabic grammar and logical debates by conducting historiography to emphasize on Islamic philosophers’ concerns about this issue. Consequently, this debate generates philosophical phenomena and resolutions in deep-thinking. In addition, these dialogues create a language impression for Philosophy in Islamic world from the period under study. Thereupon, Islamic philosophers’ discourse on this phenomenon serves as contribution to the Philosophy of Language.

Keywords: debates, epistemology, grammar and grammarians, Islamic philosophy, philosophy language, logic

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Authors: Mohd Iqbal Malik

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Ethical philosophy of Quran pinnacled virtue and economics as the part and parcel of human life. Human beings are to be imagined by the sign of morals. Soul and morality are both among the essences of human personality. Islam lays the foundation of ethics by installation of making a momentous variance between virtue and vice. It suggests for the distribution of wealth in-order to terminate accumulation of economic resources. Quran claims for the ambiguous pavement to attain virtue by saying, ‘Never will you attain the good (reward) until you spend (in the way of Allah) from that which you love. And whatever you spend indeed, Allah knows of it.’ The essence of Quran is to eliminate all the deep-seated approaches through which the wealth of nations is being accumulated within few hands. The paper will study the Quranic Philosophy Of Islamic Economic System. In recent times, to get out of the human resource development mystery of Muslims, Ismail Al-Raji Faruqi led the way in the so-called ‘Islamization’ of knowledge. Rahman and Faruqi formed opposite opinions on this project. Al-Faruqi thought of the Islamization of knowledge in terms of introducing Western learning into received Islamic values and vice versa. This proved to be a mere peripheral treatment of Islamic values in relation to Western knowledge. It is true that out of the programme of Islamization of knowledge arose Islamic universities in many Muslim countries. Yet the academic programmes of these universities were not founded upon a substantive understanding and application of the tawhidi epistemology.

Keywords: ethical philosophy, modern Islamic finance, knowledge of finance, Islamic banking

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Authors: Merkouche Wassila, Marchand Alain, Renaud Stéphane

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Organizations are facing competitive pressures constraining them to modify their practices and change initial work conditions of employees, however, these modifications have to sustain initial quality of work and engagements toward the workforce. We focus on the importance of promises in the perspective of psychological contract. According to this perspective, employees perceiving a breach of the expected obligations from the employer may become unsatisfied at work and develop organizational withdrawal behaviors. These are negative counterproductive behaviours aiming to damage the organisation according to the principle of reciprocity and social exchange. We present an integrative model of the determinants and manifestations of organizational withdrawal (OW), a set of behaviors allowing the employee to leave his job or avoid his assigned work. OW contains two main components often studied in silos: work withdrawal (delays, absenteeism and other adverse behaviors) and job withdrawal (turnover). We use the systemic micro, meso and macro sociological approach designing the individual at the heart of a system containing individual, organizational, and environmental determinants. Under the influence of these different factors, the individual assesses the type of behavior to adopt. We provide better lighting for understanding OW using both psychological contract approach through the perception of its respect by the organization and job embeddedness approach which explains why the employee does not leave the organization and then remains in his post while practicing negative and counterproductive behaviors such as OW. We study specifically cynicism as a type of OW as it is a dimension of burnout. We focus on the antecedents of cynicism to try to prevent it in the workplace.

Keywords: burnout, cynicism, job embeddedness, organizational withdrawal, psychological contract

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Authors: Imen Dhaou

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This study examines conditional Value at Risk by applying the GJR-EVT-Copula model, and finds the optimal portfolio for eight Dow Jones Islamic-conventional pairs. Our methodology consists of modeling the data by a bivariate GJR-GARCH model in which we extract the filtered residuals and then apply the Peak over threshold model (POT) to fit the residual tails in order to model marginal distributions. After that, we use pair-copula to find the optimal portfolio risk dependence structure. Finally, with Monte Carlo simulations, we estimate the Value at Risk (VaR) and the conditional Value at Risk (CVaR). The empirical results show the VaR and CVaR values for an equally weighted portfolio of Dow Jones Islamic-conventional pairs. In sum, we found that the optimal investment focuses on Islamic-conventional US Market index pairs because of high investment proportion; however, all other index pairs have low investment proportion. These results deliver some real repercussions for portfolio managers and policymakers concerning to optimal asset allocations, portfolio risk management and the diversification advantages of these markets.

Keywords: CVaR, Dow Jones Islamic index, GJR-GARCH-EVT-pair copula, portfolio optimization

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Authors: Ons Triki, Fathi Abid

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The basic objective of this paper is twofold. It resides in designing a model for a contingent convertible lease contract that can ensure the financial stability of a company and recover the losses of the parties to the lease in the event of default. It also aims to compare the convertible lease contract on inefficiencies resulting from the debt-overhang problem and asset substitution with other financing policies. From this perspective, this paper highlights the interaction between investments and financing policies in a dynamic model with existing assets and a growth option where the investment cost is financed by a contingent convertible lease and equity. We explore the impact of the contingent convertible lease on the capital structure. We also check the reliability and effectiveness of the use of the convertible lease contract as a means of financing. Findings show that the rental convertible contract with a sufficiently high conversion ratio has less severe inefficiencies arising from risk-shifting and debt overhang than those entailed by risky debt and pure-equity financing. The problem of underinvestment pointed out by Mauer and Ott (2000) and the problem of overinvestment mentioned by Hackbarth and Mauer (2012) may be reduced under contingent convertible lease financing. Our findings predict that the firm value under contingent convertible lease financing increases globally with asset volatility instead of decreasing with business risk. The study reveals that convertible leasing contracts can stand for a reliable solution to ensure the lessee and quickly recover the counterparties of the lease upon default.

Keywords: contingent convertible lease, growth option, debt overhang, risk-shifting, capital structure

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Authors: Euphrasia Susy Suhendra, Lies Handrijaningsih

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The banking sector as an intermediary party or intermediaries occupies a very important position in bridging the needs of working capital investment in the real sector with funds owner. This will certainly make money more effectively to improve the economic value added. As an intermediary, Islamic banks raise funds from the public and then distribute in the form of financing. In practice, the distribution of funding that is run by Islamic Banking is not as easy as, in theory, because, in fact, there are many financing problems; some are caused by lacking the assessment and supervision of banks to customers. This study aims to analyze the influence of the Third Party Funds, Return on Assets (ROA), Non Performing Financing (NPF), and Financing Deposit Ratio (FDR) to Total Financing provided to the Community by Islamic Banks in Indonesia. The data used is monthly data released by Bank of Indonesia in Islamic Banking Statistics in the time period of January 2009 - December 2013. This study uses cointegration test to see the long-term relationship, and use error correction models to examine the relationship of short-term. The results of this study indicate that the Third Party Fund has a short-term effect on total funding, Return on Assets has a long term effect on the total financing, Non Performing Financing has long-term effects of total financing, and Financing deposit ratio has the effect of short-term and long-term of the total financing provided by Islamic Banks in Indonesia.

Keywords: Islamic banking, third party fund, return on asset, non-performing financing, financing deposit ratio

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Authors: Inese Tenberga

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Undoubtedly, the focus of the present capitalist system of finance has shifted from the concept of productivity of money to the ‘cult of money’, which is characterized by such notions as speculative activity, squander, self-profit, vested interest, etc. The author is certain that a civilized society cannot follow this economic path any longer and therefore suggests that one solution would be to integrate the Islamic financial model in the banking sector of the EU to overcome its economic vulnerability and structurally transform its economies or build resilience against shocks and crisis. The researcher analyses the Islamic financial model, which is providing the basis for the concept of non-productivity of money, and proposes to consider it as a new paradigm of economic thinking. The author argues that it seeks to establish a broad-based economic well-being with an optimum rate of economic growth, socio-economic justice, equitable distribution of income and wealth. Furthermore, the author analyses and proposes to use the experience of member states of the Islamic Development Bank for the formation of a new EU interest free banking. It is offered to create within the EU banking system a credit sector and investment sector respectively. As a part of the latter, it is recommended to separate investment banks specializing in speculative investments and non­speculative investment banks. Meanwhile, understanding of the idea of Islamic banking exclusively from the perspective of the manner of yielding profit that differs from credit banking, without considering the legal, social, ethical guidelines of Islam impedes to value objectively the advantages of this type of financial activities at the non-Islamic jurisdictions. However, the author comes to the conclusion the imperative of justice and virtue, which is inherent to all of us, exists regardless of religion. The author concludes that the global community should adopt the experience of the Muslim countries and focus on the Islamic banking model.

Keywords: credit sector, EU banking system, investment sector, Islamic banking

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Authors: Sobar M. Johari, Ida Putri Anjarsari

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In the transmission of monetary instrument towards real sector of the economy, Bank Indonesia as monetary authority has developed Islamic Bank Indonesia Certificate (abbreviated as SBIS) as an instrument in Islamic open market operation. One of the monetary transmission channels could take place through financing channel from which the fund is used as the source of banking financing. This study aims to analyse the impact of Islamic monetary instrument towards output or economic growth. Data used in this research is taken from Bank Indonesia and Central Board of Statistics for the period of January 2008 until December 2015. The study employs Granger Causality Test, Vector Error Correction Model (VECM), Impulse Response Function (IRF) technique and Forecast Error Variance Decomposition (FEVD) as its analytical methods. The results show that, first, the transmission mechanism of banking financing channel are not linked to output. Second, estimation results of VECM show that SBIS, PUAS, and FIN have significant impact in the long term towards output. When there is monetary shock, output or economic growth could be recovered and stabilized in the short term. FEVD results show that Islamic banking financing contributes 1.33 percent to increase economic growth.

Keywords: Islamic monetary instrument, Islamic banking financing channel, economic growth, Vector Error Correction Model (VECM)

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Authors: Muhammad Izzam Bin Mohd Khazar, Nur Adibah Binti Zainudin

Abstract:

Islamic banking as one of the financial institutions is highly required to maintain a prudent approach to ensure that any financing given is able to generate income to their respective shareholders. As the default payment of customers is probably occurred in the financing, having a prudent approach in the recovery process is a must to ensure that financing losses are within acceptable limits. The objective of this research is to provide the best practice of recovery which is anticipated to benefit both bank and customers. This study will address arising issue on the current practice of recovery process and followed by providing humanising recovery solutions in the light of the Maqasid Shariah. The study identified main issues pertaining to Islamic recovery process which can be categorized into knowledge crisis, process issues, specific treatment cases and system issues. Knowledge crisis is related to direct parties including judges, solicitors and salesperson, while the recovery process issues include the process of issuance of reminder, foreclosure and repossession of asset. Furthermore, special treatment for particular cases also should be observed since different contracts in Islamic banking products will need different treatment. Finally, issues in the system used in the recovery process are still unresolved since the existing technology is still young in this area to embraced Islamic finance requirements and nature of calculation. In order to humanize the financial services in Islamic banking recovery process, we have highlighted four main recommendation to be implemented by Islamic Financial Institutions namely; 1) early deterrent by improving the awareness, 2) improvement of the internal process, 3) reward mechanism, and 4) creative penalty to provide awareness to all stakeholders.

Keywords: humanizing financial services, Islamic Finance, Maqasid Syariah, recovery process

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Authors: Mohammad Yousaf Safi Mohibullah Afghan

Abstract:

The study made on Islamic and conventional banks scrutinizes the risks interconnected with credit and liquidity on the productivity performance of Islamic and conventional banks that operate in Pakistan. Among the banks, only 4 Islamic and 18 conventional banks have been selected to enrich the result of our study on Islamic banks performance in connection to conventional banks. The selection of the banks to the panel is based on collecting quarterly unbalanced data ranges from the first quarter of 2007 to the last quarter of 2017. The data are collected from the Bank’s web sites and State Bank of Pakistan. The data collection is carried out based on Delta-method test. The mentioned test is used to find out the empirical results. In the study, while collecting data on the banks, the return on assets and return on equity have been major factors that are used assignificant proxies in determining the profitability of the banks. Moreover, another major proxy is used in measuring credit and liquidity risks, the loan loss provision to total loan and the ratio of liquid assets to total liability. Meanwhile, with consideration to the previous literature, some other variables such as bank size, bank capital, bank branches, and bank employees have been used to tentatively control the impact of those factors whose direct and indirect effects on profitability is understood. In conclusion, the study emphasizes that credit risk affects return on asset and return on equity positively, and there is no significant difference in term of credit risk between Islamic and conventional banks. Similarly, the liquidity risk has a significant impact on the bank’s profitability, though the marginal effect of liquidity risk is higher for Islamic banks than conventional banks.

Keywords: islamic & conventional banks, performance return on equity, return on assets, pakistan banking sectors, profitibility

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Authors: Ariyanti Mustapha

Abstract:

The development of Islamic jurisprudence since the first century of hijra has fascinated many orientalists to explore the historiography of Islamic legislation. The practice of uÎËl fiqh began during the lifetime of the Prophet Muhammad and was continued by the companions as the legal reasoning due to the absence of the legal injunction in the QurÉn and Sunnah. The orientalists propagated that the Roman and Jewish legislation were transplanted in Islamic jurisprudence and it was the primary reason for its progression. This article focuses on the analysis of foreign elements transplanted in the uÎËl fiqh as mentioned by Ignaz Goldziher and Joseph Schacht. They insisted the methodology of Sunna and IjtihÉd were authentically from Roman and Jewish legislation, known as Mishnah and Ha-Kol were invented and transplanted as the principles in uÎËl fiqh. The author used qualitative and comparative methods to analyze the orientalists’ views. The result showed that many erroneous facts were propagated by Goldziher and Schacht by claiming the parallels between the principles, methodologies, and fundamental concepts in uÎËl fiqh and Roman Provincial law. They insisted Sunna and IjtihÉd as an invention from the corpus of Jewish Mishnah and Ha-kol and further affirmed by Schacht that Islamic jurisprudence began in the second century of hijra. These judgments are used by the orientalists to prove the inferiority of Islamic jurisprudence. Nevertheless, many evidences has proven that Islamic legislation is capable of developing independently without any foreign transplant.

Keywords: foreign transplant, ijtihad, orientalist, USUL Fiqh

Procedia PDF Downloads 126

Authors: M. S. Riyazulla

Abstract:

Since the dawn of the 21st century, there has been a perceptible decline in Islamic supremacy in world affairs, apart from the gradual waning of the amiable relations and relevance of Islamic countries in the International political arena. For a long, Islamic countries have been marginalised by the superpowers in the global conflicting issues. This was evident in the context of their recent invasions and interference in Afghanistan, Syria, Iraq, and Libya. The leading International Islamic organizations like the Arab League, Organization of Islamic Cooperation, Gulf Cooperation Council, and Muslim World League did not play any prominent role there in resolving the crisis that ensued due to the exogenous and endogenous causes. Hence, there is a need for Islamic countries to create a credible International Islamic organization that could dictate its terms and shape a new Islamic world order. The prominent Islamic countries are divided on ideological and religious fault lines. Their concord is indispensable to enhance their image and placate the relations with other countries and communities. The massive boon of oil and gas could be synergistically utilised to exhibit their omnipotence and eminence through constructive ways. The prevailing menace of Islamophobia could be abated through syncretic messages, discussions, and deliberations by the sagacious Islamic scholars with the other community leaders. Presently, as Muslims are at a crossroads, a dynamic leadership could navigate the agitated Muslim community on the constructive path and herald political stability around the world. The present political disorder, chaos, and economic challenges necessities a paradigm shift in approach to worldly affairs. This could also be accomplished through the advancement in science and technology, particularly space exploration, for peaceful purposes. The Islamic world, in order to regain its lost preeminence, should rise to the occasion in promoting peace and tranquility in the world and should evolve a rational and human-centric solution to global disputes and concerns. As a splendid contribution to humanity and for amicable international relations, they should devote all their resources and scientific intellect towards space exploration and should safely transport man from the Earth to the nearest and most accessible cosmic body, the Moon, within one hundred years as the mankind is facing the existential threat on the planet.

Keywords: carboniferous period, Earth, extinction, fossil fuels, global leaders, Islamic glory, international order, life, marginalization, Moon, natural catastrophes

Procedia PDF Downloads 40

Authors: Hasna Elalaoui Elabdallaoui, Abdelaziz Elfazziki, Mohamed Sadgal

Abstract:

Outlines: The social economy is a moral approach to solidarity applied to the projects’ development. To reconcile economic activity and social equity, crowdfunding is as an alternative means of financing social projects. Several collaborative blockchain platforms exist. It eliminates the need for a central authority or an inconsiderate middleman. Also, the costs for a successful crowdfunding campaign are reduced, since there is no commission to be paid to the intermediary. It improves the transparency of record keeping and delegates authority to authorities who may be prone to corruption. Objectives: The objectives are: to define a software infrastructure for projects’ participatory financing within a social and solidarity economy, allowing transparent, secure, and fair management and to have a financial mechanism that improves financial inclusion. Methodology: The proposed methodology is: crowdfunding platforms literature review, financing mechanisms literature review, requirements analysis and project definition, a business plan, Platform development process and implementation technology, and testing an MVP. Contributions: The solution consists of proposing a new approach to crowdfunding based on Islamic financing, which is the principle of Mousharaka inspired by Islamic financing, which presents a financial innovation that integrates ethics and the social dimension into contemporary banking practices. Conclusion: Crowdfunding platforms need to secure projects and allow only quality projects but also offer a wide range of options to funders. Thus, a framework based on blockchain technology and Islamic financing is proposed to manage this arbitration between quality and quantity of options. The proposed financing system, "Musharaka", is a mode of financing that prohibits interests and uncertainties. The implementation is offered on the secure Ethereum platform as investors sign and initiate transactions for contributions using their digital signature wallet managed by a cryptography algorithm and smart contracts. Our proposal is illustrated by a crop irrigation project in the Marrakech region.

Keywords: social economy, Musharaka, blockchain, smart contract, crowdfunding

Procedia PDF Downloads 51

Authors: Lalla Nezha Lakmiti, Abdelkahar Zahid

Abstract:

Due to the setbacks on the international scene and the wave of cacophonic financial scandals affecting large international groups, the new Islamic finance industry is not immune despite its initial resistance. The purpose of this paper is to understand and analyze the meaning of the Corporate Governance (CG) concept in Moroccan Islamic banking systems with specific reference to their institutions. The research objective is to identify also the path taken and adopted by these banks recently set up in Morocco. The foundation is rooted in shari'a, in particular, no stakeholder (the shareholding approach) must be harmed, and the ethical value is reflected into these parties’ behavior. We chose a qualitative method, semi-structured interviews where six managers provided answers about their banking systems. Since these respondents held a senior position (directors) within their organizations, it is felt that they are well placed and have the necessary knowledge to provide us with information to answer the questions asked. The results identified the orientation of participating banks and assessing how governance works, while determining which party is fovoured: shareholders, stakeholders or both. This study discusses the favorable condition to the harmonization of the regulations and therefore a better integration between Islamic finance and conventional ones in the economic context of Morocco.

Keywords: corporate governance, Islamic Banks, stakeholders, shareholders

Procedia PDF Downloads 83

Authors: Nerissa Gloria Balboa, Aire Yukdawan, Venice Gordula, Rhea Jannagen Curva

Abstract:

This research examined the lived experiences and compared their similarities and differences of former Catholics turned Muslim converts in and out of prison. Qualitative comparative study with an Interpretative Phenomenological Analysis approach was used to explore the lives of Muslim converts. Interviews were conducted at Islamic Studies, Call and Guidance of the Philippines (ISCAG) and Tarbiyyah Islamic Female Institute for Muslim converts out of prison, New Bilibid Prison (NBP) and Correctional Institution for Women (CIW) for Muslim converts in prison. Results of the study show that first, for Muslim converts out of prison, exploration begins through (1) experiences of Catholicism as a norm in the family and eventual realization of its emptiness in practice, (2) experiences of Islam as a norm in the environment and discovery of meaningfulness of Islam (3) experiences of gradual holistic transformation of being a Muslim; and (4) experiences of extension of oneself towards family and society. Secondly, for Muslim converts in prison, exploration begins through (1) experiences of Apathy towards Catholicism and eventual deviation from moral standards, (2) experiences of prison condition as an environment of reflection on spirituality; and (3) experiences of positive effects of being a Muslim inside Prison. Comparisons show that there exists similarities and differences across the two settings in terms of (1) experiences of Catholicism and the degree of its internalization and actualization, (2) experiences of Islamic encounters and the process of conversion; and (3) experience of Islamic devotion and Islamic construct for the self. Theoretical bases of religious conversion found in unique contexts are discussed, initiating a paradigm shift of thinking that is needed to address the deeply rooted prejudices within Catholic and Islamic circles.

Keywords: Catholicism, Islamic conversion, social psychology, religion

Procedia PDF Downloads 358