Articles on Islamic Finance
During the opening ceremony, H.E Mr. Yousef Hassan Khalawi, Secretary General, AlBaraka Forum for Islamic Economy highlighted that the world has now spent more than a full century talking about sustainability. The Islamic world has 22 countries classified as least developed countries. We should focus on our nations and focus on our beliefs, as today we are trying to introduce Sukuk as one of our major initiatives created by Muslim economists, scientists, and experts.
In a market following Islamic norms and values, the market forces will determine which Halal goods and services should be produced and offered at what price. Through private sector investment and production, resource markets and product markets will function to enable households to obtain purchasing power by providing rentable factors of production like labour services (Ijarat-ul-Ashkhas) or usufruct of a naturally existing or produced tangible asset (Ijarat-ul-A’yan) in the production process and earn compensation in terms of wage and rent, respectively.
The author urges that deep and rapid decarbonization must become a global priority because climate tipping points will likely be reached much sooner than previously expected as greenhouse gas emissions continue to rise. To safeguard humanity and its societal systems, it is not only important to consider the time it takes to achieve decarbonization, but to ensure that we avoid reaching the climate tipping points.
The paper also cites several studies which discuss the social failure of Islamic banks. The results suggest that while Islamic banks may need to still improve their social performance, strong Shari‘ah governance only compliments that objective rather than appearing as a hurdle or substitute.
Islamic banking continues to be the largest segment of the IFSI, constituting 70.21% of the total global IFSI assets in 2023, while Sukuk outstanding and Islamic funds collectively represented 29.08%, and the Islamic insurance segment represented 0.71%. The regional distribution of global Islamic finance assets reveals a pronounced concentration in the Gulf Cooperation Council (GCC), which accounts for 52.50%.
Shah Waliullah in Hujjat Allah Ul Balighah writes that exchange is of different kinds. Goods for goods or goods for services. There are people with surplus funds and some with deficiency of funds. This requires transfer of resources for need fulfillment without counter value as in Zakat and Sadaqat.
It is also important to build trust with the customers and improve the complaint resolution system. Currently, Bank Mohtasib requires that customer should approach bank and wait for 45 days unless bank provides a letter to decline the complaint. The wait is too long, especially for micro-entrepreneurs and SMEs who do not have enough working capital if their incoming remittance is stuck for some reason.
Many experts still think that digital currency is just a fictitious thing and its title is just for show like ivory and in reality, it is a form of betting and profit- hunting trading like we see on the internet, such as forex trading etc. In fact, there is no genuine seller in trading nor are there any Shariah conditions fulfilled for the justification of sale.
Al Baraka Forum for Islamic Economy in collaboration with the Islamic Chamber of Commerce and Development (ICCD) hosted the 2nd Al Baraka Regional Conference, in partnership with Al Baraka Bank Pakistan, to shed light on the crucial role of home remittances in Pakistan and their impact on sustainable development.
There are various risks faced by Islamic banks in liquidity management due to the i) absence of an Islamic inter-bank market, ii) lack of Shari’ah compliant alternatives for liquidity management, both at the inter-bank and central bank level, iii) absence of liquid Islamic Sukuk both in short and long term maturities and iv) absence of Islamic discount window at the central bank level for Islamic financial institutions.
