Category Archives: Articles on Islamic Finance

Future Research Directions in Islamic Economics

Salman Ahmed Shaikh The recent literature on Islamic economics hardly makes use of mathematics even for expositional purposes. Mathematics is a language. It keeps argument and logic straight. Just like growth models could talk of seemingly non-mathematical concepts like public … Continue reading

Rate this:

Posted in Articles on Islamic Finance | Tagged , , , , , , | Leave a comment

Effect of Zakat on Asset and Capital Markets

Salman Ahmed Shaikh Zakat is a religious obligation to pay a part of wealth and production to the government. In its economic character, Zakat is a combination of a net worth tax and production tax. Zakat is levied as per … Continue reading

Rate this:

Posted in Articles on Islamic Economics, Articles on Islamic Finance | Tagged , , , , , , , , , | Leave a comment

Consumerism and Credit Cards: Implications for Islamic Finance

Salman Ahmed Shaikh In consumer behavior, there are two important aspects from Islamic economics perspective that must be understood. First aspect is related to the ‘choice set’ and second aspect is related to the ‘budget constraint’. Limit on Choice Set … Continue reading

Rate this:

Posted in Articles on Islamic Finance | Tagged , , , , , , , , , | 6 Comments

Forex Trade and Islamic Viewpoint

Salman Ahmed Shaikh The top most priority of an Islamic investor is to earn Halal income and avoid such sources of earning income and indulging in transactions which are prohibited in Islamic faith. Trading in foreign currencies offers a very … Continue reading

Rate this:

Posted in Articles on Islamic Finance | Tagged , , , , , , , , | 10 Comments

Corporate Governance: Agency Conflicts and Islamic Economics

Salman Ahmed Shaikh Agency conflict arises when the various parties have different incentives or objectives in a mutual relationship. Two main agency conflicts which arise in commercial context are: Between shareholders and managers Between shareholders and creditors In the first … Continue reading

Rate this:

Posted in Articles on Islamic Finance | Tagged , , , , , , , | Leave a comment

Risk Aversion And Islamic Financial Economics

Salman Ahmed Shaikh Risk aversion is an observed behavior and there is empirical evidence that people generally are risk averse. By risk averse, we mean to say that people are willing to pay a higher risk premia than what is … Continue reading

Rate this:

Posted in Articles on Islamic Finance | Tagged , , , , , , | Leave a comment

Risk Management with Islamic Derivatives: Do We Really Need Them

Salman Ahmed Shaikh Islamic finance industry assets are now worth more than $1 trillion. The industry has shown resilience and double digit growth even in the face of global recession. However, there was much more expected from them on different … Continue reading

Rate this:

Posted in Articles on Islamic Finance | Tagged , , , , , , , , , | 2 Comments

Some Observations on Operations of Islamic Mutual Funds in Pakistan

Salman Ahmed Shaikh Islamic finance industry over the past three decades has diversified itself from banking to other sectors as well and now it comprises institutions such as Islamic banks, Islamic insurance companies and Islamic mutual funds. Growth has been … Continue reading

Rate this:

Posted in Articles on Islamic Finance | Tagged , , , , , , , , , | 16 Comments

Form Versus the Substance Debate in Islamic Finance

Salman Ahmed Shaikh In currently practiced Islamic banking, the debt based modes of finance are used predominantly and these products are priced with same interest based benchmarks, which the conventional banks use. It seems that practiced Islamic banking is far … Continue reading

Rate this:

Posted in Articles on Islamic Finance | Tagged , , , | Leave a comment

Do Islamic Banks Cost More in Pakistan?

Salman Ahmed Shaikh There are 5 full-fledged Islamic banks operating in Pakistan and more than 15 conventional banks with Islamic banking branches. The growth in Islamic finance industry has been consistently impressive. Moreover, the share of the industry in the … Continue reading

Rate this:

Posted in Articles on Islamic Finance | Tagged , , , , | Leave a comment