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Compliance: The assets that back sukuk should be compliant with Shariah. Bonds need only comply with laws of country/locality they are issued in. [41] [42] Pricing: The face value of a sukuk is priced according to the value of the assets backing them. Bond pricing is based on credit rating, i.e. the issuer's credit worthiness. [41] [42]
Because compliance with shariah law is the raison d'être of Islamic finance, Islamic banks and banking institutions that offer Islamic banking products and services should establish a Shariah Supervisory Board (SSB) – to advise them on whether or not some proposed transactions or products follows the Sharia, and to ensure that the operations ...
However "some Shariah-compliant hedge funds have created an Islamic-short sale that is Shariah-certified". [233] Some critics (like Feisal Khan and El-Gamal) complain it uses a work-around (requiring a "down-payment" towards the shorted stock) that is no different than "margin" regulations for short-selling used in at least one major country ...
Profit and Loss Sharing (also called PLS or participatory banking) refers to Sharia-compliant forms of equity financing such as mudarabah and musharakah.These mechanisms comply with the religious prohibition on interest on loans that most Muslims subscribe to.
In recent decades it has become a term for a very common form of Islamic (i.e., "shariah compliant") financing, where the price is marked up in exchange for allowing the buyer to pay over time—for example with monthly payments (a contract with deferred payment being known as bai-muajjal).
We then phone up a Sharia scholar for a Fatwa [seal of approval, confirming the product is Shari'ah compliant]. If he doesn't give it to us, we phone up another scholar, offer him a sum of money for his services and ask him for a Fatwa. We do this until we get Sharia compliance. Then we are free to distribute the product as Islamic. [165]
Because compliance with Sharia law is the underlying reason for the existence of Islamic finance, Islamic banks (and conventional banking institutions that offer Islamic banking products and services) should establish a Sharia Supervisory Board (SSB) to advise them on whether their products comply, and to ensure that their operations and ...
Takaful (Arabic: التكافل, sometimes translated as "solidarity" or mutual guarantee) [1] is a co-operative system of reimbursement or repayment in case of loss, organized as an Islamic or sharia-compliant alternative to conventional insurance, which contains riba (usury) and gharar (excessive uncertainty).