Tuesday, July 19, 2005

My New Book on Islamic Banking & Financial Markets



By Professor Saiful Azhar Rosly, Ph.D

MAIN THEMES:
· One semester course outline on Islamic banking and finance plus readings
· Basic principles of Islamic banking and finance
· Features of current Islamic banking products available in the market
· New and niche product proposal : Product Development
· Analysis of Islamic banking performance
· Takaful, Sukuks and Islamic Funds
· Positive and global outlook towards Islamic banking business.


BOOK SUMMARY

This book examines the principles and practices of Islamic banking and financial markets, particularly from the Malaysian experience. The main objective of Islamic financial system is the promotion of justice. In this manner, both legal and ethical dimension of product choice are equally important. It means that market players and Shariah advisors should not produce Shariah complaint products along the juristic plane alone but also how the products impacted economic justice (i.e. doing the right thing- effectiveness) and efficiency (i.e. doing things right). For this reason, the principle of risk-taking (ghorm) and the principle of work (kasb) and the principle of liability, accountability, responsibility (daman) are paramount in determining Shariah legitimacy of profits and earnings derived from transactions in Islamic financial institutions. Risk (ghorm), work (kasb) and liability (daman) constitute the essence of trading and commerce (al-bay) the Quran has propagated over usury (riba). By risk, it means people allow their capital to depreciate and appreciate according to market forces. By work, it refers to value-additions namely knowledge and skills imparted into the business process. Liability means the responsibility each selling party must assume such as providing warranty and repairs on defective goods sold. Based on these principles of risk, work and responsibility, also known as the principle of ‘iwad (i.e. equivalent countervalue), the moral dimension of Islamic financial transactions can be vividly seen. It helps people to take a second-look at products that have received Shariah compliant status. In this way, the book examines the current Islamic financial product with a critical outlook. It consists of ten sections with every section containing many short-articles on Islamic financial markets.

This book promotes the Islamic banking business but current practices are suspect. Muslim academics must be honest and holds a sacred duty to see that Islamic banking serves the Muslim Ummah well. It provides credible information on new product lines that Islamic banking companies can embark on after taking murabahah to the limit.
To order contact: drsaiful99@hotmail.com

14 Comments:

Blogger Maya Puspa Rahman (G0319620) said...

Having worked in finance industry for almost five years now, this book, being the main reference for the Islamic Financial System course this semester (sem I 05/06) came as a comprehensive reading of what one may want to know about the finance industry - in Islamic way.

It also came to a surprise (for me) to read one section in the book that particularly focussed on the takaful industry, that Prof Saiful somehow disagree with the current operating mechanism that some of the prestigiuous takaful companies have implemented, like for example on the subject matter when the contract is written between the insured and the insurer, among others.

This enticed me to even be more critical on the Islamic financial system that is currently in place. It pushes me to obtain and reread all the details in underwriting a takaful contract (eventhough currently my family and even my car are insured under the concept of takaful) as of course, most of us would lay back being pretty much rest assured on the idea that we now have Islamic insurance and not the conventional insurance.

Having read only a few sections of the book force me to say that the book is mind-provoking. And I also believe that eventually (Alhamdulillah), people are able to realise that the Islamic Investment Linked Products offered by those conventional insurance are misleading. It is only the investment part that are invested as accordance in Syariah, and mind me, not the insurance part.

Thus, as I read through the book, I am expecting that more and more weaknesses of the current Islamic financial system would be highlighted. And it is not meant to merely condemn, but of course to improvise the system.

And InsyaAllah for the sake of our religion and the prosperity of our nation, in our effort to acclaim and practise the teaching of AlQuran and sunnah, seeking for the happiness in this life and especially life hereafter, we are able to make the current Islamic financial system a better system - in Islamically legitimate way.

Maya Puspa Rahman
G0319620
August 06,05 1:05PM

10:07 PM  
Blogger Adeila Radzlein Ahmad said...

To me this book has thought me a lot of things that I never knew or that I never think about before I took this class. Such as, if we want to do the house loan. Before this we thought it is a normal thing to do to get a loan at the conventional bank but actually it is "riba". What I want to say is that, this book has open my mind in understanding the importance of Islamic Banking.

2:34 AM  
Blogger ronald rulindo said...

It is a Great Book!!!

This is the book that i'm waiting for since the first time i met DR Saiful. This book give a very interesting explanation not only about the kowledge of islamic banking and financial market itself but also the critics for the system that islamic banking adopt nowadays. I think every scholars and professional have to read this book because of three reason: 1. The author have deep knowledge about this field. 2. The book explained the islamic banking and financial market step by step. So it is easy to understand. 3. This book covered many issue about islamic banking. So we can reflect and see whether the islamic banking is already adopt the truly islamic system or not.

Last but not least, i hope this book can be translated soon into other languange if we want to see the islamic banks growth quickly in the world.

8:20 AM  
Blogger leeanne said...

Assalamualaikum..
I’ve already read this book written by Prof. Dr Saiful once or twice even before it has been made retailed during my UG years. But at that time, I read it for other purpose only without really appreciating what the main contents in the book intend to disseminate. But after rereading it again and really opens my mind’s eye while reading through the book, although it is still not enough to really capture the real essence of the discussion if one cannot equate it with the real practice in this world system or in other words, really get in touch with the reality of life and get hands-on experience in whatever has been said in this book, makes me appreciate even more the effort and knowledge that Prof Dr. Saiful has put into this book. It is really rewarding to use this book especially for those who have little understandings in the workings of the Islamic financial system in their decision-making process of selecting which of the two systems (conventional way of financial system or the Islamic way of financial system) can lead one to the right path towards God The Almighty, since it uses an easy-read and understandable language and full of information. Admittedly, I used to see things in their practical and technical (explicit or zahiri) sides without taking a moment’s thought on their implications on all aspects that comprise oneself as well as the overall society. Then again, we as humans always have the tendencies to put our concerns first before others. But this book helps me seeing and thinking in the perspectives of moral and ethical dimension of the existing financial system, besides the workings and mechanisms as well as issues related to it, if not all aspects (systems) of our lives here on earth.
It is hoped that this book can touch the minds and souls of the Ummah as it did mine so that at the very least one of the the many corruptions on the Muslims’ minds and souls by the non-muslims’ practice namely the ribawi system can be purified.
May Allah Bless those who always put the effort and sweat in seeking and upholding the truth..
Wallahu'alam..
p/s: Thank you sir for introducing your book to us..

11:06 PM  
Blogger nadiahaisyah said...

For me, this book is worth to read since it highlights some critical issues in Islamic banking practices and products. However, the reading should not limited only to the students who take Islamic Finance, but all Muslims to better understand the real situation happend in Malaysia. As what I saw in current Islamic banking practice is not actually in-line with Islamic teaching. Thus, the understanding towards the Islamic banking concept is very important.

Although Islamic banking did include in my bachelor degree's subjects list, but through this book, I understand better about the Islamic banking basic concepts as well as the real scenario of Islamic banking industry in Malaysia, in which hiding behind its Islamic name but no more than the conventional one (ie: BBA used for housing loan). So, those who directly involve with the Islamic banking industry like BNM’s personnel, shariah board advisors, fuqaha etc, really need to take a step in improving our Islamic banking.

Malaysian Islamic banking industry need a reformation. Although, the task of renew and reshaping the Islamic banking is somehow hard and challenging to those people involve, but still, we should improvise its operation in order to make it much more better than what we have now. Then no more Muslims especially me will live in dilemma in the sense that I need to think whether or not to consume the Islamic banking products.

As a Muslims my duty is not to consume products that constitute riba. But how is it possible since Islamic banking also offering such a riba stuffs?

Although with all the controversial issues, I’m still support the Islamic banking industry in Malaysia. I’m proud that we have our own Islamic banking. At least we have start some where to practice what Allah asked us to. Probably, we need to thank the person who has mooted the idea of establishing Islamic banks and all individuals involve in realizing the constructive idea.

Other suggestion that I would like to address relating to Islamic banking is perhaps in future, other universities in Malaysia would also consider of offering the Islamic banking course in order to produce more students that major in this field. For me this is an interesting study. Although some universities do offer an Islamic banking subject but it is only on the description of the products offered by Malaysian Islamic banks without discussing in depth on the implementation side and the real scenario of the industry in Malaysia.

Last but not least, I like this book.

8:49 PM  
Blogger nadiahaisyah said...

This book is worth to read. However, the reading should not limited only to students, but all people out there especially Muslims should also read it to better understand the Islamic banking products and its actual concepts in order to put Islamic banks back to the real track. Its practice currently is not actually in-line with Islamic teaching.

Athough Islamic banking included in my first degree subjects list and I did posses a good grade, however this book helps me to clearly understand the basic concepts of Islamic banking and its products as well as the real scenario of Islamic banking industry in Malaysia, in which hiding behind its Islamic name but no more than the conventional one (ie: BBA used for housing loan). Thus, some argumentative issues and few suggestions raised in this book should be given more attention by those who directly involve with the Islamic banking industry like BNM’s personnel, shariah board advisors, fuqaha etc in order to make the Islamic banking better.

Malaysian Islamic banking industry needs a reformation. Although, the task of renew and reshaping the Islamic banking is somehow hard and challenging to those people involve, but still, we should improvise its operation in order to make it much more better than what we have now. Then no more Muslims especially me will live in dilemma in the sense that I need to think whether or not to consume the Islamic banking products. As a Muslims my duty is not to consume products that constitute riba. But how is it possible since Islamic banking also offering such a riba stuffs?

Although with all the controversial issues, I’m still support the Islamic banking industry in Malaysia. I’m proud that we have our own Islamic banking. At least we have start some where to practice what Allah asked us to. Probably, we need to thank the person who has mooted the idea of establishing Islamic banks and all individuals involve in realizing the constructive idea.

Other suggestion that I would like to address relating to Islamic banking is perhaps in future, other universities in Malaysia would also consider of offering the Islamic banking course in order to produce more students that major in this field. For me this is an interesting study. Although some universities do offer an Islamic banking subject but it is only on the description of the products offered by Malaysian Islamic banks without discussing in depth on the implementation side and the real scenario of the industry in Malaysia.

Last but not least, I like to read this book.

10:09 PM  
Blogger siti hajar samsu said...

Assalamualikum………….

Foremost, this book promotes the Islamic banking business and the current practices in Islamic financial system. I can say that this book is an easy reading material and easy to understand particularly for those do not have some basic in Islamic banking. All articles which is discuss in certain topic is clarifies in a most simple way. And again, I think this is the best approach to tackle the beginners like me which is looking for some reading material which provides some foundation knowledge to understand Islamic banking business in real practice. In addition, this book compiles all critical issues in modern practices and not only covers Islamic banking issues but the other components in Islamic financial system as a whole.

Interestingly, after read through several articles in this book, its really gives a glance about the current practices, shortcomings and restraints in transaction using Islamic approach as compared to conventional one. To me read this book makes me realize that there are big challenge for Islamic finance to really establish in the environment of interest bearing system where has been taken place a hundred decades practically in world economic system and no exception for Malaysia.

All in all, I would recommend this book for a complementary reading material to a group of academicians, practitioners, bankers and to the layman who wishes to understand modern Islamic finance business. However, certain articles in this book need further elaboration in the explanation in order to better comprehend the message the author trying to convey.

Given that Malaysia is practice dual banking system, so that I think to really understand the Islamic banking product available in market is very important, especially to run away from interest bearing system. It is a must to identify the problem, weaknesses with the current practices and put effort to find the best solution which could benefit Muslim customers as a whole. Islamic bankers must really works on it to ensure Islamic finance practices on the right track.

8:03 PM  
Blogger weni said...

I just go strict to the point. I like this book very much. This is because by reading this book, my knowledge of Islamic Financial System is getting increase.

This book gave me so many ideas about islamic finance that I never know before such as the market players and Shariah advisors should not produce Shariah complaint products along the juristic plane alone but also how the products impacted economic justice and efficiency.

Beside that, it is not only introduce islamic finance product but also give critique and comment of those products. Furthermore,it contains the short articles that we don't have take a long time to read it. It is really nice to read this book.

Indirectly, it asks the scholar muslim to be honest in promoting Islamic finance products with regard the Shariah compliant.
In addition, by reading this book we know what are the criterias that should be put in the Islamic finance product based on shariah principle.

It goes without saying, I like this book so much and I just give suggestion that it is not only important for practitioners, students but also important for public, especially for muslim people because it provides credible information of new islamic finance product. Thank you.

Weni Hawariyuni

10:58 PM  
Blogger weni said...

I just go strict to the point. I like this book very much. This is because by reading this book, my knowledge of Islamic Financial System is getting increase.

This book gave me so many ideas about islamic finance that I never know before such as the market players and Shariah advisors should not produce Shariah complaint products along the juristic plane alone but also how the products impacted economic justice and efficiency.

Beside that, it is not only introduce islamic finance product but also give critique and comment of those products. Furthermore,it contains the short articles that we don't have take a long time to read it. It is really nice to read this book.

Indirectly, it asks the scholar muslim to be honest in promoting Islamic finance products with regard the Shariah compliant.
In addition, by reading this book we know what are the criterias that should be put in the Islamic finance product based on shariah principle.

It goes without saying, I like this book so much and I just give suggestion that it is not only important for practitioners, students but also important for public, especially for muslim people because it provides credible information of new islamic finance product. Thank you.

Weni Hawariyuni

11:00 PM  
Blogger Orawan said...

The overall this book is a good for people who are starting to know about Islamic Banking and financial markets because it is provided the basic term and principle concept of Islamic banking and financial markets. In term of language used are simple and easy to understand. Furthermore, in this book is provided the case study as a picture to analogy. Beside, the author tries to present the new issue in order to how to apply with Islamic Banking and financial markets

G0515464

6:53 AM  
Blogger muhammad said...

Muhammad(G0217291)said

Assalamualaikum..

For me, this book is a must; for both practitioners and public.

It can gives us basic understanding on how our so called 'Islamic Financial Systems'operates.

On the other hand, it also enlightened major critical issues such as implementation of BBA, securitization of Debt via MUNIF & Sukuk that happening today in our contemporary Islamic Banking environment.

Lastly, Dr Saiful's ideas which is for me based on reality, not a fiction should be noted & more serious debate is essential for remedy & rectification.

Regards

Muhammad (G0217291)

11:32 PM  
Blogger siti rubiah said...

"Critical Issues on Islamic Banking and Financial Markets" provides comprehensive coverage pertaining to the subject and spur critical thinking and study on the issues related. The author's genuine concern on the current market practises can be identified on several articles written in the book. For e.g the current practise of AITAB (refer chapter6 of Section Two), to mention the least. Altogether 605 pages, but don't be afraid by the number of pages as the articles written were short yet compact. It is definitely a must-read for both public and practitioners!

Note for the author:
Million thanks for the great book!

9:47 AM  
Blogger masahina said...

The book is gift and a source of knowledge to all those who seek knowledge and clear understanding on Islamic banking and finance, particularly critical issues on modern islamic banking and finance.

It is a book that explains the theory and practice that shows the milestones in the critical areas of Islamic banking and finance precisely.

It is finely authored in a way both academicians and professionals in the banking industry could understand the gist of the book.

The organisation of chapters is really amazing, explain issue by issue in a clear manner without causing any confusion on the readers.

It is the real contribution for the knowledge in the field of Islamic banking and finance. and please keep up the work.

Masahina.S (G0518872)



The book

9:24 AM  
Blogger nira said...

Congratulations on the publication of this superb reference. It is a must have item for both practitioners and students. This book has been an eye opener to me as although i've been in the banking industy for ±5 years and have been promoting Islamic banking products (loans / PDS), but only after reading this book that I realise that the current practice is not a truly pure genuine Islamic banking practice.

The current practice is a mere contract approach in order to Islamize the conventional laons. Although it is a shariah compliance approach, however, the spirit of islamic banking and its main objective is not fully understand / complied with. It looks like the objective of introduction of Islamic banking is not a correction for things done wrongly but it is more of an alternative to the conventional practice.

Please correct me if I am wrong, I belive that the author would like to open the practitioners/regulators' eyes so that something right shall take place. However, i would suggest that more promotion should be done in promoting this book as it is very useful especially to the practitioners. I believe that the practitioners and the consumers have a bigger voice and can make a change.

Maybe you should look for sponsors to promote this book and/or get a funder to provide this book for free to the public. So that, everybody has the opportunity to understand and evaluate the current system. Well done again n wassALAM.

8:20 AM  

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