The Relationship between Traditional as well as Modern Modes of Financial Instruments for International Market through Islamic Finance

MS, SHABBIR and MS, GHAZI and T, AKHTAR,(April 2016), The Relationship between Traditional as well as Modern Modes of Financial Instruments for International Market through Islamic Finance. , Journal of Internet Banking and Commerce, UNSPECIFIED

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Abstract

Islamic financial system compared to western conventional system is related to the religion of Islam. The principles of Islamic finance are based on three main factors which are mentioned in the Quran and are an important part of Islamic jurisprudence, such as Riba, Gharar and Maysir. Islamic commercial law is based on three modes which serve as the basic blocks for complex financial products. These three modes are partnership based, trade based and rental based modes of financing. These three traditional modes of financing are dependent upon the size and limitations of entire market and desires of their target customers. The modern modes of financing consist upon Islamic Insurance (Takaful), Islamic financial derivatives, Islamic bonds (Sukuk) and Istisna. Furthermore, there should not be pure economical interest in transactions; it must contribute to the social harmony. It shows balanced between equity and debt and the trade of debt must be avoided which is explicitly expressed in the pillars of Islamic banking.
Keywords : Islamic jurisprudence; Social harmony; Traditional; Modern financial instruments, UNSPECIFIED
Journal or Publication Title: Journal of Internet Banking and Commerce
Volume: 21
Number: 1
Item Type: Article
Subjects: Ekonomi Islam
Depositing User: Users 15 not found.
Date Deposited: 26 Dec 2019 06:38
Last Modified: 26 Dec 2019 06:38
URI: https://repofeb.undip.ac.id/id/eprint/858

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