“ISLAMIC BANKING”

SUBMITTED BY:

DEEPSHIKA TRIVEDI

Roll No. - 1319

B.A, LL.B

SUBMITTED TO:

Mr Ashok Kumar Sharma

Faculty of Law Law Relating to Investment, Securities, Corporate Finance,

and Competition

September, 2019

CHANAKYA NATIONAL LAW UNIVERSITY, NAYAYA NAGAR,

MEETHAPUR, PATNA-800001

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ACKNOWLEDGEMENT

Firstly, I would like to thank my faculty of Law Relating to Investment, Securities, Corporate
Finance, and Competition-Mr Ashok Kumar Sharma for providing me an opportunity to make
my project on such an interesting topic which is also a contemporary issue as for now.
Secondly, I would like to thank all my colleagues and friends for helping me out in arranging of
the accumulated collected study material.
Lastly, special thanks to my parents for guiding me in giving the final touch to this project and
helping me out throughout this project.

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Table of Contents
INTRODUCTION.................................................................................................................................5

1. HISTORY OF ISLAMIC BANKING...........................................................................................8

2. DIFFERENCE BETWEEN ISLAMIC AND CONVENTIONAL BANKING...........................10

3. SHARIAH ADVISORY COUNCIL (SAC)................................................................................12

4. CURRENT PRACTICES OF ISLAMIC BANKING..................................................................14

5. GLOBAL SCENARIO OF ISLAMIC BANKING......................................................................17

6. CONCLUSION, ANALYSIS AND SUGGESTION...................................................................20

BIBLIOGRAPHY...............................................................................................................................21

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 INTRODUCTION

Islamic banking refers to a system of banking or banking activity that is consistent with the
principles of Islamic law (Shariah) and its practical application through the development of
Islamic economics. Shariah prohibits the payment or acceptance of interest fees for loans of
money (Riba, usury), for specific terms, as well as investing in businesses that provide goods or
services considered contrary to its principles (Haraam, forbidden).

While these principles were used as the basis for a flourishing economy in earlier times, it is
only in the late 20th century that a number of Islamic banks were formed to apply these
principles to private or semi-private commercial institutions within the Muslim community.

During the Islamic Golden Age, early forms of proto-capitalism and free markets were present
in the Caliphate, where an early market economy and an early form of mercantilism were
developed between the 8th-12th centuries, which some refer to as "Islamic capitalism".

A vigorous monetary economy was created on the basis of the expanding levels of circulation of
a stable, high-value currency (the dinar) and the integration of monetary areas that were
previously independent.1

A number of economic concepts and techniques were applied in early Islamic banking,
including bills of exchange, the first forms of partnership (mufawada) such as limited
partnerships (mudaraba), and the earliest forms of capital (al-mal), capital accumulation (nama
al-mal), cheques, promissory notes, trusts (see Waqf) , transactional accounts, loaning, ledgers
and assignments.

Organizational enterprises independent from the state also existed in the medieval Islamic
world, while the agency institution was also introduced during that time.

Many of these early capitalist concepts were adopted and further advanced in medieval Europe
from the 13th century onwards. 2

https://www.researchgate.net/publication/280302830_Introduction_to_Islamic_Banking_and_Finance_Principles
_and_Practice
2
ibid
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OBJECTIVES

 To understand the concept of Islamic Banking.

 To understand the basic differences between Islamic and conventional banking.

RESEARCH METHODOLOGY

The researcher has adopted the doctrinal method of the research.

SOURCES OF DATA
In order to complete the research study, the researcher will collect the material through various
primary and secondary sources of data.

PRIMARY SOURCES such as books and documents.

SECONDARY SOURCES reviewing the Books, Newspapers, Magazine, Websites

LIMITATION OF THE STUDY

The researcher has limited time for the project. The need and background is also necessary for
having a bird’s eye view of the particular topic and it gets developed only by effective and
extended reading over a long period of time.

However, the researcher only has access to limited amount of work that is available in the
library. The researcher has a restricted access to information and sources for reasons beyond her
control. But the researcher will still attempt to take out the best possible work.
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 1. HISTORY OF ISLAMIC BANKING3

Modern banking system was introduced into the Muslim countries at a time when they were
politically and economically at low ebb, in the late 19th century. The main banks in the home
countries of the imperial powers established local branches in the capitals of the subject
countries and they catered mainly to the import export requirements of the foreign businesses.
The banks were generally confined to the capital cities and the local population remained largely
untouched by the banking system. The local trading community avoided the “foreign” banks
both for nationalistic as well as religious reasons. However, as time went on it became difficult
to engage in trade and other activities without making use of commercial banks. Even then many
confined their involvement to transaction activities such as current accounts and money
transfers. Borrowing from the banks and depositing their savings with the bank were strictly
avoided in order to keep away from dealing in interest which is prohibited by religion.

 Interest-free banking seems to be of very recent origin. The earliest references to the
reorganization of banking on the basis of profit sharing rather than interest are found in
Anwar Qureshi (1946), Naiem Siddiqi (1948) and Mahmud Ahmad (1952) in the late
forties, followed by a more elaborate exposition by Mawdudi in 1950.
 The writings of Muhammad Hamidullah 1944, 1955, 1957 and 1962 should be included
in this category. They have all recognized the need for commercial banks and their
perceived "necessary evil," have proposed a banking system based on the concept of
Mudarabha - profit and loss sharing.
 In the next two decades interest-free banking attracted more attention, partly because of
the political interest it created in Pakistan and partly because of the emergence of young
Muslim economists. Works specifically devoted to this subject began to appear in this
period. The first such work is that of Muhammad Uzair (1955). Another set of works
emerged in the late sixties and early seventies. Abdullah al-Araby (1967), Nejatullah
Siddiqi (1961, 1969), al-Najjar (1971) and Baqir al-Sadr (1961, 1974) were the main
contributors.
 The early 1970s saw institutional involvement. The Conference of the Finance Ministers
of the Islamic Countries held in Karachi in 1970, the Egyptian study in 1972, the First

3
History of Islamic Banking https://www.adb.org/sites/default/files/publication/436751/adbi-wp853.pdf
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 International Conference on Islamic Economics in Mecca in 1976, and the International
Economic Conference in London in 1977 were the result of such involvement. The
involvement of institutions and governments led to the application of theory to practice
and resulted in the establishment of the first interest-free banks. The Islamic
Development Bank, an inter-governmental bank established in 1975, was born of this
process.
 The first modern experiment with Islamic banking was undertaken in Egypt under cover
without projecting an Islamic image—for fear of being seen as a manifestation of Islamic
fundamentalism that was anathema to the political regime.
 The pioneering effort, led by Ahmad Elnaggar, took the form of a savings bank based on
profit-sharing in the Egyptian town of Mit Ghamr in 1963. This experiment lasted until
1967 (Ready 1981), by which time there were nine such banks in country.
 In 1972, the Mit Ghamr Savings project became part of Nasr Social Bank which,
currently, is still in business in Egypt. In 1975, the Islamic Development Bank was set-
up with the mission to provide funding to projects in the member countries. The first
modern commercial Islamic bank, Dubai Islamic Bank, opened its doors in 1975. In the
early years, the products offered were basic and strongly founded on conventional
banking products, but in the last few years the industry is starting to see strong
development in new products and services.
 Islamic Banking is growing at a rate of 10-15% per year and with signs of consistent
future growth. Islamic banks have more than 300 institutions spread over 51 countries,
including the United States through companies such as the Michigan-based University
Bank, as well as an additional 250 mutual funds that comply with Islamic principles. It is
estimated that over US$822 billion worldwide Shariah-compliant assets are managed
according to The Economist. This represents approximately 0.5% of total world
estimated assets as of 2005. According to CIMB Group Holdings, Islamic finance is the
fastest-growing segment of the global financial system and sales of Islamic bonds may
rise by 24 percent to $25 billion in 2010.
 The World Islamic Banking Conference, held annually in Bahrain since 1994, is
internationally recognized as the largest and most significant gathering of Islamic
banking and finance leaders in the world. The Vatican has put forward the idea that "the
principles of Islamic finance may represent a possible cure for ailing markets.

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 2. DIFFERENCE BETWEEN ISLAMIC AND
CONVENTIONAL BANKING

Islamic banking has the same purpose as conventional banking except that it operates in
accordance with the rules of Shariah, known as Fiqh al-Muamalat (Islamic rules on
transactions). The basic principle of Islamic banking is the sharing of profit and loss and the
prohibition of riba (usury).

Common terms used in Islamic banking include profit sharing (Mudharabah), safekeeping
(Wadiah), joint venture (Musharakah), cost plus (Murabahah), and leasing (Ijarah).

In an Islamic mortgage transaction, instead of loaning the buyer money to purchase the item,
a bank might buy the item itself from the seller, and re-sell it to the buyer at a profit, while
allowing the buyer to pay the bank in installments.

However, the bank's profit cannot be made explicit and therefore there are no additional
penalties for late payment. In order to protect itself against default, the bank asks for strict
collateral. The goods or land is registered to the name of the buyer from the start of the
transaction. This arrangement is called Murabaha. Another approach is EIjara wa EIqtina,
which is similar to real estate leasing. Islamic banks handle loans for vehicles in a similar
way (selling the vehicle at a higher-than-market price to the debtor and then retaining
ownership of the vehicle until the loan is paid).4

An innovative approach applied by some banks for home loans, called Musharaka al-
Mutanaqisa, allows for a floating rate in the form of rental. The bank and borrower form a
partnership entity, both providing capital at an agreed percentage to purchase the property.
The partnership entity then rents out the property to the borrower and charges rent. The bank
and the borrower will then share the proceeds from this rent based on the current equity share
of the partnership. At the same time, the borrower in the partnership entity also buys the
bank's share of the property at agreed installments until the full equity is transferred to the
borrower and the partnership is ended.

If default occurs, both the bank and the borrower receive a proportion of the proceeds from
the sale of the property based on each party's current equity. This method allows for floating
4
Concise Concepts of Islamic Banking available at https://www.sc.com/global/av/pk-ib-cb-differences.pdf

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rates according to the current market rate such as the BLR (base lending rate), especially in a
dual-banking system like in Malaysia.5

There are several other approaches used in business transactions. Islamic banks lend their
money to companies by issuing floating rate interest loans. The floating rate of interest is
pegged to the company's individual rate of return. Thus the bank's profit on the loan is equal
to a certain percentage of the company's profits. Once the principal amount of the loan is
repaid, the profit-sharing arrangement is concluded. This practice is called Musharaka.
Further, Mudaraba is venture capital funding of an entrepreneur who provides labor while
financing is provided by the bank so that both profit and risk are shared.

Such participatory arrangements between capital and labor reflect the Islamic view that the
borrower must not bear all the risk/cost of a failure, resulting in a balanced distribution of
income and not allowing lender to monopolize the economy.

Islamic banking is restricted to islamically acceptable transactions, which exclude those

involving alcohol, pork, gambling, etc. The aim of this is to engage in only ethical investing,
and moral purchasing.

In theory, Islamic banking is an example of full-reserve banking, with banks achieving a

100% reserve ratio. However, in practice, this is not the case, and no examples of 100 per
cent reserve banking are observed. 6

Islamic banks have grown recently in the Muslim world but are a very small share of the
global banking system. Micro-lending institutions founded by Muslims, notably Grameen
Bank, use conventional lending practices and are popular in some Muslim nations, especially
Bangladesh, but some do not consider them true Islamic banking.

However, Muhammad Yunus, the founder of Grameen Bank and microfinance banking, and
other supporters of microfinance, argue that the lack of collateral and lack of excessive
interest in micro-lending is consistent with the Islamic prohibition of usury (riba).

5
ibid
6
Differrences between Islamic and conventional banking available at http://www.mib.com.mv/blog/guide-to-
islamic-banking/difference-between-conventional-and-islamic-banking

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 3. SHARIAH ADVISORY COUNCIL (SAC)

Islamic banks and banking institutions that offer Islamic banking products and services are
required to establish a Shariah Supervisory Board (SSB) to advise them and to ensure that the
operations and activities of the banking institutions comply with Shariah principles. On the other
hand, there are also those who believe that no form of banking that involves interest payments
can ever comply with the Shariah.

In Malaysia, the National Shariah Advisory Council, which has been set up at Bank Negara
Malaysia (BNM), advises BNM on the Shariah aspects of the operations of these institutions and
on their products and services. In Indonesia the Ulama Council serves a similar purpose.

A number of Shariah advisory firms have now emerged to offer Shariah advisory services to the
institutions offering Islamic financial services. Issue of independence, impartiality and conflicts
of interest have also been recently voiced. The World Database for Islamic Banking and Finance
(WDIBF) has been developed to provide information about all the websites related to this type
of banking.

The term “Islamic banking” refers to a system of banking or banking activity that is consistent
with Islamic law (Shariah) principles and guided by Islamic economics. 7

In particular, Islamic law prohibits usury, the collection and payment of interest, also commonly
called riba in Islamic discourse. In addition, Islamic law prohibits investing in businesses that
are considered unlawful, or haraam (such as businesses that sell alcohol or pork, or businesses
that produce media such as gossip columns or pornography, which are contrary to Islamic
values). In the late 20th century, a number of Islamic banks were created to cater to this
particular banking market.8

USUARY OF ISLAM

The criticism of usury in Islam was well established during the Prophet Mohammed's life and
reinforced by several of verses in the Holy Qur’an dating back to around 600 AD. The original
word used for usury in this text was Riba, which literally means “excess or addition”.

7
Overview of SAC available at https://www.sacbnm.org/?page_id=3351
8
ibid
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This was accepted to refer directly to interest on loans so that, according to Islamic economists
Choudhury and Malik (1992), by the time of Caliph Umar, the prohibition of interest was a well-
established working principle integrated into the Islamic economic system.

It is not true that this interpretation of usury has been universally accepted or applied in the
Islamic world. Indeed, a school of Islamic thought which emerged in the 19th Century, led by
Sir Sayyed, still argues for an interpretative differentiation between usury, which it is claimed
refers to consumptional lending, and interest which they say refers to lending for commercial
investment (Ahmed, 1958).

Nevertheless, there does seem to be evidence in modern times for what Choudhury and Malik
describe as “a gradual evolution of the institutions of interest-free financial enterprises across
the world” (1992: 104). They cite, for instance, the current existence of financial institutions in
Iran, Pakistan and Saudi Arabia, the Dar-al-Mal-al-Islami in Geneva and Islamic trust
companies in North America. 9

9
Riba available at https://www.investopedia.com/terms/r/riba.asp
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 4. CURRENT PRACTICES OF ISLAMIC BANKING 10
Generally speaking, all interest-free banks agree on the basic principles. However, individual
banks differ in their application. These differences are due to several reasons including the
laws of the country, objectives of the different banks, individual bank’s circumstances and
experiences, the need to interact with other interest-based banks, etc. In the following
paragraphs, we will describe the salient features common to all banks.

Deposit accounts

All the Islamic banks have three kinds of deposit accounts: current, savings and investment.

Current accounts

Current or demand deposit accounts are virtually the same as in all conventional banks.
Deposit is guaranteed.

Savings accounts

Savings deposit accounts operate in different ways. In some banks, the depositors allow the
banks to use their money but they obtain a guarantee of getting the full amount back from the
bank.

Banks adopt several methods of inducing their clients to deposit with them, but no profit is
promised. In others, savings accounts are treated as investment accounts but with less
stringent conditions as to withdrawals and minimum balance. Capital is not guaranteed but
the banks take care to invest money from such accounts in relatively risk-free short-term
projects. As such lower profit rates are expected and that too only on a portion of the average
minimum balance on the ground that a high level of reserves needs to be kept at all times to
meet withdrawal demands.

10
Contempory practices of Islamic Banking available at
http://www.irti.org/english/research/documents/ies/154.pdf

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Investment account

Investment deposits are accepted for a fixed or unlimited period of time and the investors
agree in advance to share the profit (or loss) in a given proportion with the bank. Capital is
not guaranteed.

Modes of financing

Banks adopt several modes of acquiring assets or financing projects. But they can be broadly
categorised into three areas: investment, trade and lending.

Investment financing

This is done in three main ways: a) Musharaka where a bank may join another entity to set up
a joint venture, both parties participating in the various aspects of the project in varying
degrees. Profit and loss are shared in a pre-arranged fashion. This is not very different from
the joint venture concept.

The venture is an independent legal entity and the bank may withdraw gradually after an
initial period. b) Mudarabha where the bank contributes the finance and the client provides
the expertise, management and labour. Profits are shared by both the partners in a pre-
arranged proportion, but when a loss occurs the total loss is borne by the bank. c) Financing
on the basis of an estimated rate of return.

Under this scheme, the bank estimates the expected rate of return on the specific project it is
asked to finance and provides financing on the understanding that at least that rate is payable
to the bank. (Perhaps this rate is negotiable.) If the project ends up in a profit more than the
estimated rate the excess goes to the client. If the profit is less than the estimate the bank will
accept the lower rate. In case a loss is suffered the bank will take a share in it.

Trade financing

This is also done in several ways. The main ones are: a) Mark-up where the bank buys an
item for a client and the client agrees to repay the bank the price and an agreed profit later on.
b) Leasing where the bank buys an item for a client and leases it to him for an agreed period
and at the end of that period the lessee pays the balance on the price agreed at the beginning

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an becomes the owner of the item. c) Hire-purchase where the bank buys an item for the
client and hires it to him for an agreed rent and period, and at the end of that period the client
automatically becomes the owner of the item.

d) Sell-and-buy-back where a client sells one of his properties to the bank for an agreed price
payable now on condition that he will buy the property back after certain time for an agreed
price. e) Letters of credit where the bank guarantees the import of an item using its own funds
for a client, on the basis of sharing the profit from the sale of this item or on a mark-up basis.

Lending

Main forms of Lending are: a) Loans with a service charge where the bank lends money
without interest but they cover their expenses by levying a service charge. This charge may
be subject to a maximum set by the authorities. b) No-cost loans where each bank is expected
to set aside a part of their funds to grant no-cost loans to needy persons such as small farmers,
entrepreneurs, producers, etc. and to needy consumers. c) Overdrafts also are to be provided,
subject to a certain maximum, free of charge.

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 5. GLOBAL SCENARIO OF ISLAMIC BANKING

Over the last three decades Islamic banking and finance has developed into a full-fledged
system and discipline reportedly growing at the rate of 15percent per annum. Today, Islamic
financial institutions, in one form or the other, are working in about 75 countries of the world.
Besides individual financial institutions operating in many countries, efforts have been
underway to implement Islamic banking on a country wide and comprehensive basis in a
number of countries.

The instruments used by them, both on assets and liabilities sides, have developed
significantly and therefore, they are also participating in the money and capital market
transactions. In Malaysia, Bahrain and a few other countries of the Gulf, Islamic banks and
financial institutions are working parallel with the conventional system.

Bahrain with the largest concentration of Islamic financial institutions in the Middle East
region, is hosting 26 Islamic financial institutions dealing in diversified activities including
commercial banking, investment banking, offshore banking and funds management.

It pursues a dual banking system, where Islamic banks operate in the environment in which
Bahrain Monetary Agency (BMA) affords equal opportunities and treatment for Islamic
banks as for conventional banks.

Bahrain also hosts the newly created Liquidity Management Centre (LMC) and the
International Islamic Financial Market (IIFM) to coordinate the operations of Islamic banks
in the world. 11

To provide appropriate regulatory set up, the BMA has introduced a comprehensive
prudential and reporting framework that is industry-specific to the concept of Islamic banking
and finance. Further, the BMA has pioneered a range of innovations designed to broaden the
depth of Islamic financial markets and to provide Islamic institutions with wider
opportunities to manage their liquidity.

Another country that has a visible existence of Islamic banking at comprehensive level is
Malaysia where both conventional and Islamic banking systems are working in a competitive
11
Global financing Systems available at https://www.ifsb.org/download.php?
id=4811&lang=English&pg=/index.php

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environment. The share of Islamic banking operations in Malaysia has grown from a nil in
1983 to above 8 percent of total financial system in 2003. They have a plan to enhance this
share to 20 percent by the year 2010. However, there are some conceptual differences in
interpretation and Shariah position of various contracts like sale and purchase of debt
instruments and grant of gifts on savings and financial papers.

In Sudan, a system of Islamic banking and finance is in operation at national level. Like other
Islamic banks around the world the banks in Sudan have been relying in the past on
Murabaha financing.

However, the share of Musharaka and Mudaraba operations is on increase and presently
constitutes about 40 percent of total bank financing. Although the Islamic financial system
has taken a good start in Sudan, significant problems still remain to be addressed.

Like Sudan, Iran also switched over to Usury Free Banking at national level in March 1984.
However, there are some conceptual differences between Islamic banking in Iran and the
mainstream movement of Islamic banking and finance.12

Owing to the growing amount of capital availability with Islamic banks, the refining of
Islamic financing techniques and the huge requirement of infrastructure development in
Muslim countries there has been a large number of project finance deals particularly in the
Middle East region.

Islamic banks now participate in a wide financing domain stretching from simple Shariah-
compliant retail products to highly complex structured finance and large-scale project
lending. These projects, inter alia, include power stations, water plants, roads, bridges and
other infrastructure projects. Bahrain is the leading centre for Islamic finance in the Middle
East region.

The establishment of the Prudential Information and Regulatory Framework for Islamic
Banks (PIRI) by the BMA in conjunction with AAOIFI has gone a long way towards
establishing a legal and regulatory framework to meet the specific risks inherent in Islamic
financing structures. The BMA has quite recently signed MoU with the London Metal
Exchange (LME) to pool assets to develop and promote Shariah compliant tradable
instruments for Islamic banking industry.
12
Islamic Finance Outcome available at
https://www.spratings.com/documents/20184/4521646/Islamic+Finance+2018+Digital-1.pdf/cf025a76-0a23-
46d6-9528-cecde80e84c8

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The arrangement is seen as a major boost for industry’s integration in the global financial
system and should set the pace for commodity-trading environment in Bahrain. BMA has
also finalized draft guidelines for issuance of Islamic bonds and securities from Bahrain. In
May 03, the Liquidity Management Centre (LMC) launched its debut US$ 250 million Sukuk
on behalf of the Government of Bahrain.13

National Commercial Bank (NCB) of Saudi Arabia has introduced an Advance Card that has
all the benefits of a regular credit card. The card does not have a credit line and instead has a
prepaid line. As such, it does not incur any interest. Added benefits are purchase protection,
travel accident insurance, etc and no interest, no extra fees with no conditions, the card is
fully Shariah compliant. It is more secure than cash, easy to load up and has worldwide
acceptance.

This prepaid card facility is especially attractive to women, youth, self employed and small
establishment employees who sometimes do not meet the strict requirements of a regular
credit card facility.

Furthermore, Saudi Government has also endorsed an Islamic-based law to regulate the
kingdom's lucrative Takaful sector and opened it for foreign investors. Islamic banks have
also built a strong presence in Malaysia, where Standard & Poor's assigned a BBB+rating to
the $600 million Shariah-compliant trust certificates (called sukuk) issued by Malaysia
Global Sukuk Inc. Bank Negara Malaysia (BNM) has announced to issue new Islamic Bank
licenses to foreign players. The Financial Sector Master plan maps out the liberalization of
Malaysia's banking and insurance industry in three phases during the next decade. It lists
incentives to develop the Islamic financial sector and enlarge its market share to 20 percent,
from under 10 percent now.

A dedicated high court has been set up to handle Islamic banking and finance cases. In
United Kingdom, the Financial Services Authority is in final stages of issuing its first ever
Islamic banking license to the proposed Islamic Bank of Britain, which has been sponsored
by Gulf and UK investors. The United States of America has appointed Dr. Mahmoud El
Gamal, an eminent economist/expert on Islamic banking to advise the US Treasury and
Government departments on Islamic finance in June 2004.

13
ibid.

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 6. CONCLUSION, ANALYSIS AND SUGGESTION

Considering the important role of Islamic Bankings in the mobilisation of financial resources,
Scholars, Ulemu' and Bankers with vision, courage, imagination and above all, absolute
conviction and commitment to the cause of Islam, will have to work in tandem to examine
the future prospects and possibilities of diversifying and widening the scope, volume and size
of Islamic Banking of different maturities. Furthermore, Islamic banks mainly deal with the
area of an assets rather than liability, which make their operations more diversify and
complex.

It is also evident that there has no exhaustive funds standard in Islamic banks. Therefore,
effort should be made to harmonize the funds standard in Islamic banks in Muslim Countries.
It is also observed that Islamic banks tend to be favour the murabahah technique rather than
profit/loss sharing. Therefore, Islamic banks should try to create a means to embark in profit
and loss sharing techniques, such as venture capital and private equity, etc. as it is true
concept of Islamic banks.

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BIBLIOGRAPHY
Books referred

 Abu Musa, Md. Sadeque,& Efazuddin Mallick, (2006). Islamic Banking: It’s Operating

Mechanisms. In writings on Islamic banking , edited by Ataul Huq Pramanik, Kuala

Lumpur, Research centre, International Islamic University Malaysia

 Contemporary Practices of Islamic financing Techniques, edited by Dr Ausaf Ahmad,

Jeddah, Saudi Arabia, IRTI

 M.A. Mannan, A.K.M Fazlul Hoque and R.Z (2006). Functions of an Islamic bank. In

writings on Islamic banking. Edited by Ataul Huq Pramanik, Kuala Lumpur, Research

center, International Islamic University Malaysia.

 Mei Pheng, LEE and Ivan Jeron DETTA, (2007). Islamic Banking and Finance Law,

Kuala Lumpur, Pearson Longman.

 Islamic banking and Finance, (2004).edited by Salman Syed Ali and Ausaf Ahmad,

Selecte papers from Conference in Brunei, 5-7 January, 2004, organized by Islamic

Research and Training Institute and University Brunei Dar Salam.

 Saiful Azhar Rosly, (2005). Critical Issues on Islamic Banking and Financial Markets,

Kuala Lumpur, Dinamas Publishing

 Sudin Haron, A Comparative Study of Islamic Banking Practices, School of

Management, University Utara, Malaysia.

Websites

 www.google.com
 www.wikipedia.com
 www.investopedia.com

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