A Brief Review & Introduction to Practiced Islamic Banking & Finance
14 Pages Posted: 17 Jan 2010
Date Written: January 14, 2010
This paper looks at the practiced Islamic finance and alternatives it offers for corporate finance managers in sourcing funds i.e. i) Ijara ii) Murabaha iii) equity modes like Musharakah and Mudarabah iv) Diminishing Musharakah, v) Salam and vi) Istisna. It also looks at alternatives for sourcing funds from savers to provide financing thereof by financialintermediaries i.e. i) Qard-e-Hasan ii) Musharakah and iii) Mudarabah. The paper also gives a brief account of literature on Islamic corporate finance, interest free finance, alternatives suggested in the past and their pros and cons, role of central bank in Islamic finance and alternatives for OMO, Interbank lending and money market in Islamic finance.
Keywords: Islamic corporate finance, pricing of capital, interest free finance, Interest, Interest free economy, Usury, Time value of money, Riba, Musharakah, Mudarabah, Ijara, Salam, Istisna, Qard-e-Hasan, Diminishing Musharakah
JEL Classification: G21, G30, G10
Suggested Citation: Suggested Citation