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Course Name (English)
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ISLAMIC FINANCE
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| Course Code |
FIN546 |
| Course Description |
The objective of this course is to introduce students to the most effective part of the Islamic economic system. The Islamic financial system would be learned so that students know what are the operating tools and instruments, and the principles of Islamic finance that form the basis of the roles of Islamic financial institutions, requirements of various transactions to be undertaken by Islamic financial institutions (contracts), and the main Islamic modes of financing business and investment. Students would also be exposed to some of the emerging topics in Islamic finance such as Shariah approved financial assets – sukuk (Islamic bond) and Shariah approved stocks (halal counters). |
| Transferable Skills |
reflective learner |
| Teaching Methodologies |
Lectures, Tutorial, Discussion, Presentation |
| CLO |
| CLO1 |
Classify various Shariah principles and types of contracts |
| CLO2 |
Apply Shariah principles in diverse Islamic banking operations and instruments/products |
| CLO3 |
Debate the opportunities, issues and challenges facing Islamic finance |
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| Pre-Requisite Courses |
No course recommendations |
| Topics |
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1. Introduction to Islamic Finance
1.1) • Philosophy of Islamic finance
1.2) • Principles of Islamic economics
1.3) • Principles of Islamic finance
1.4) • Shariah framework for Islamic finance (Definition of Shariah, Sources of Islamic law, Maqasid Al-Shariah)
1.5) • Fundamental prohibited elements in Islamic finance (Prohibition of riba, Prevention of gharar, Prohibition of gambling (maysir))
1.6) • Differences between Islamic finance and conventional finance
1.7) • Development of Islamic finance in Malaysia
1.8) • Islamic finance today : Opportunities, Issues & Challenges to sustain development in global financial system
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2. Shariah Contracts for Islamic Financial Instruments
2.1) • Elements of Shariah contracts (Form of contract, Subject matter of contract, Contracting parties)
2.2) • Classification of Shariah contracts
2.3) • Exchange based contracts
2.4) • Partnership contracts
2.5) • Charitable contracts
2.6) • Agency contract
2.7) • Security contracts
2.8) • Supporting contracts
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3. Institutions and Markets
3.1) • Islamic financial system
3.2) • Islamic financial institutions (Islamic banks, Islamic insurance (takaful) companies, Mutual funds or unit trusts, Other finance companies, Islamic institution of waqf)
3.3) • Islamic financial markets (Islamic money market and instruments, Islamic capital markets (sukuk & equity markets) and instruments)
3.4) • Shariah governance (BNM Shariah Advisory Council and role)
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4. Islamic Banking Operations and Instruments
4.1) • Conceptual Balance Sheet of an IFI
4.2) • Role of Islamic bank
4.3) • Sources of funds (Savings deposit, Current deposit, Term deposit, Investment deposit, Underlying contracts for savings and current deposits)
4.4) • Uses of funds (Islamic retail financing, Corporate financing, Working capital financing)
4.5) • Islamic trade financing instruments and practices (Islamic letter of credit, Islamic trust receipt, Islamic accepted bills, Islamic bank guarantee, Islamic shipping guarantee)
4.6) • Other Islamic financing methods (Islamic credit cards (retail financing))
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| Assessment Breakdown | % |
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| Continuous Assessment | 60.00% |
| Final Assessment | 40.00% |
| Details of Continuous Assessment |
| Assessment Type |
Assessment Description |
% of Total Mark |
CLO |
| Assignment |
Assignment 1
Discuss on current issues of Islamic contracts |
20% |
CLO2
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| Group Project |
Assignment 2 |
30% |
CLO3
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| Test |
Test
Chapter 1: Introduction to Islamic Finance
Chapter 2: Shariah Contracts for Islamic Financial Instruments |
10% |
CLO1
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| Reading List | | Recommended Text | - International Shari’ah Research Academy for Islamic Finance - ISRA 2016, Islamic Financial System: Principles and Operations., 2 Ed., International Shari’ah Research Academy for Islamic Finance - ISRA
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| Reference Book Resources | - International Shari’ah Research Academy for Islamic Finance - ISRA 2015, Islamic Capital Markets: Principles and Practices, International Shari’ah Research Academy for Islamic Finance - ISRA
- Iqbal, Z. & Mirakhor, A 2011, An Introduction to Islamic Finance: Theory and Practice (Vol. 687)., Wiley
- Ayub, M. 2009, Understanding Islamic Finance, Wiley
- Khir, K., Gupta, L., & Shanmugam B. 2008, Islamic Banking: A Practical Perspective:, Pearson Malaysia Sdn Bhd.
- Dr. Mohd Daud Bakar and Dr. Engku Rabiah Adawiyah Engku Ali 2008, Essential Readings in Islamic Finance, CERT Publications Sdn. Bhd.
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| Article/Paper List | This Course does not have any article/paper resources |
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| Other References | This Course does not have any other resources |
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