GC WOMEN UNIVERSITY SIALKOT

DEPARTMENT OF BUSINESS ADMINISTRATION

Course Outline
ISLAMIC FINANCE
Basic Information

Course Name ISLAMIC FINANCE

Course Code FIN-432
Program BBA
Semester Spring 2020
Credit Hours 3
Resource Person Ms. Tajalli Fatima
Office Hours: 9:am to 11:00 pm (Mon, Tues, Wed, Fri)

Course Description:
The course Beginning with the fundamental guidelines of Islam in the arena of dealings and business
transactions, this course covers the application of canonical Islamic laws to modern financial transactions.
Although the focus is on commercial banking, other aspects of financial marketplace are also addressed.
As an applied course, the focus is on: a) distinguishing features of Islamic Economic and Financial system b)
Identification of non-Shariah compliant financial instruments, c) Preparation of basic Shariah compliant
financial contracts d) Different aspect of Islamic and non-Islamic equity investments.

Evaluation
All the activities held during the session will be evaluated. Final grades for the course will be awarded on the
basis of the following breakdown:

Assignments: 10%
Quizzes: 10%
Mid Term Examination: 35%
Final Examination: 40%

Total: 100%

Learning Objectives:
Upon successful completion of the course, students should be able to:
1) Compare Islamic and conventional financial systems
2) Examine modes of financing used in Islamic banks
3) Analyze financial Instruments used in Islamic capital markets
4) Evaluate Shariah compliant equities
Course Outline:

Prepared by: Tajalli Fatima

Recommended Text Book:
1. Mufti Taqi Usmani, An Introduction to Islamic Finance (MTU).
2. Mufti Imran Usmani, Meezan’s Banks Guide to Islamic Banking (MBG)
3. Vogel, F. E. and Hayes, S. L. Islamic Law and Finance: Religion, Risk and Return (VH)

Reference Books:
1. Muhammad Ayub, Understanding Islamic Finance

Classroom Behavior:

During class, all cell phones and pagers must be turned off or set to “vibrate.” If you are on-call for
emergencies, please let me know at the beginning of the class.

Participant Responsibilities:

The Participant is responsible for all information presented in class (unless told otherwise) and all information
in the reading assignments, whether covered by the instructor. In case of absence it is the participant’s
responsibility to get class notes, handouts, and/or directions from a classmate. Regular student attendance and
participation is very important. The material covered in the classroom will be cumulative in nature, and missing
classes will tend to put a student "out of sync" in ways that won't be entirely evident until an assignment or
examination comes due. If you must miss a class, please let the instructor know - a make-up class can
sometimes be arranged, or classroom handouts picked up.

Honesty Policy:

A Participant found in cheating on any exam/ assignment/ project will receive no credit (i.e. no grade) for that
exam/ assignment/ project. Plagiarism is a serious academic offence. Students who plagiarize material for
assignments will receive a mark of zero (F) on the assignment and may fail the course. Plagiarism may result in
dismissal from a program of study or the college. Plagiarism involves presenting the words of someone else as
you own. Plagiarism can be the deliberate use of a whole piece of another person’s writing, but more frequently
it occurs when students fail to acknowledge and to document sources from which they have taken material.

Prepared by: Tajalli Fatima

 Topic Breakdown
Week 01 & 02 Preliminaries and Overview
● Introduction and preliminary reflection on Islamic Economic and
MBG Ch. 1-3 Financial System
● Introduction to Islamic Economics
● Develop building blocks of Islamic Economic and Financial System
Week 03 Comparison of Western and Islamic Economic Systems
● Understand the distinguishing features of Islamic Economic System
MBG Ch. 1-3 and compare them to Capitalism and Communism
Azmat (2009) on Muslim
Spain
Week 04 & 05 Islamic Law & Legal Theory & Canonical Contracts in Islam
● Explain the injunctions of Islamic financial transactions and examine
VH Ch. 5 (The Nominate rules for conditions and stipulations
Contract Scheme);
MBG Ch. 9
Week 07,08 & 09 Riba Al Qard
Pg 25-6 Supreme Court ● Understand the Islamic concept of Interest and its application to
Judgment modern day banking
VH Ch. 4 (Islamic Law of Riba Al Fadl
Usury, Risk & Property) ● Understand the Islamic concept of Riba Al Fadl and its applications
Week 10 Sale (Ba’i) in Islam
● Evaluate the conditions for both binding and void Islamic sales
MTU nd MBG Ch. 10&11 contracts
Week 11 Murabaha/Bai Muajjal
● Discuss the distinguishing features of Murabaha and its use on the asset
side of Islamic banks
Week 12, 13 Mudarabah/Musharakah
● Islamic concept of partnership and its use on both the asset and
liability side of Islamic banks
Musharkah and the Ideal Islamic Financing Model
● Examine the ideal nature of Musharkah and Mudarbah and analyze
the impediments in their implementation
Week 14 Ijarah l
MTU p. 157-181; ● Discuss the distinguishing features of Islamic leasing
Week 15 Diminishing Musharakah; Comparison between MM, Ijarah and DM
● Discuss the distinguishing features of DM and its use in Islamic house
financing
Week 16 Salam and Istisna
● Examine the distinguishing features of Salam and its use in agriculture
financing. Also discuss the characteristics of Istisna and its application
to project financing.

Additional Notes by Instructor (Optional):

Classroom conduct is kept in strict review by the instructor. Absenteeism without reason is discouraged and
constructive participation and teamwork/ group study in the course is highly encouraged.
Prepared by: Tajalli Fatima