Integrating zakat, waqf and sadaqah: myint myat phu zin clinic model in Myanmar

The Muslim population in Myanmar is approximately eight milllions out of fifty eight millions of the whole population. Majority of the Muslim in Myanmar are the poor and unfortunate and there is a urgent need for them to get help especially in the case of health. When the background of the country is relooked, there are very limited donators for waqf, zakat and sadaqah. However, fortunately, a group of Muslims has founded the clinic by integrating the concepts of the waqf, zakat and sadaqah. It is the first clinic in Myanmar which is established based on the combination of these three concepts for Muslims and non-muslims. Therefore, in this paper, we present a clinic model that integrates three traditional Islamic tools such as waqf, zakat and sadaqah. Moreover, the managment of sources and uses of funds of the clinic is elaborated and explained. It is believed that this clinic model can be used as a model in any other non-Muslim countries with minority Muslim population

Is any defect in Islamic banking products? a case study of BBA

The rapid growth of Islamic banking and finance plays significant role to provide the financing facility for both Muslims and non-Muslims. One of the most popular Islamic banking products for property financing is Bay’ Bithaman Ajil (BBA). It has been widely used in Malaysian banking environment although this type of product is not allowed in Middle East. When BBA is used to finance for any incomplete property, the unethical problems arise. It is because the banks are forcing the customers to pay and at the end, the customer does not occupy the property and at the same time, they are in debt. Banks should be taking responsibility, rather than putting the entire burden on the customers, in the case of default by property developer. This paper suggests the regulators, industry players and shari’ah scholars to revisit the validity issue of BBA financing for the incomplete product

Transaction cost theory, political theory and resource dependency theory in the light of unconventional aspect

Islam as a comprehensive religion, it molds our way of life comprehensively from the religious activities to the business activities. Muslims are required to abide the Islamic teachings in their private lives as well as dealing with public. When the business dealings are examined, the top corporate players monitor the management of the company and these players are in turn observed the best corporate governance practices and guidelines issued by the respective regulators. From the conventional perspective, these guidelines are developed based on the theories developed by the prior researchers using their rational thinking and learning from the past experiences. In Islam, it is believed that human being has limited knowledge and thus, their theories founded on rational thinking might not be comprehensive and valid unless it combines with the revealed knowledge. Thus, the purpose of this paper is to examine whether the prevailing corporate governance theories such as transaction cost theory, political theory and resource dependency theory are in line with Shari’ah. It has been found out that none of them are completely in line with Islamic teachings. Thus, this paper suggests the regulators which allow the activities of Islamic finance should revisit their existing conventional corporate governance principles to ensure that they are in line with MaqasidShari’ah and applicable to the needs of the Islamic finance industry

Future of Islamic insurance (takaful) in Indian market

Takaful has been accepted as an alternative to insurance and it becomes popular not only in Muslim countries but also in non-Muslim countries. Similar to the insurance, takaful can provide the same benefit, coverage and protection to the participants. And it has an additional unique feature, i.e. its compliant nature with Islamic principles. India is ranked in the third position in terms of Muslim population in the world. In addition, worldwide India and China accounted for 40% of world's economic growth in the year 2011. According to the World Takaful Report (2009), the annual compounded growth rate of takaful is 31% and Indian sub-continent represents the highest growth of 85% in its Takaful contributions. Furthermore, takaful products are meant for both Muslims and non-Muslims. It is believed that if India is offering takaful products, it will be able to attract more Muslim participants while fulfilling the needs of non-Muslims. Therefore, it is expected that India can be the future takaful giant market. The regulators and the current insurance operators in India should relook at the needs and the trends of the market to take the opportunity of Indian growing economy and takaful unique nature

Quantitative analysis on the correlation between risks: empirical evidence from banks in United Kingdom

Financial institutions or banks are faced with several types of risks that are uniquely related to the nature of the industry. Therefore it is a must for banks to have risk mitigation methods in order to maintain its competitiveness and sustainability. For the purpose of this paper, four unique risks related to the banking industry will be discussed, as well as to provide empirical study on the relationship between these risks. These risks are liquidity risk, operational risk, credit risk and market risk. The focus of this study is on ten listed banks in United Kingdom with complete secondary data from the year 2002 to 2011. Liquidity risk is measured by the ratio of total loans to total deposits, operational risk is calculated based on two ratios, i.e. the ratio of operating expenses to total assets and the ratio of non-performing loans to total loans. Credit risk is based on the probability of default based on Altman’s z score equation and market risk is calculated based on the standard deviation of quarterly stock returns. The findings show the evidence that there is a relationship between tested risk and it is expected that the findings will be the interest of the bankers to see which risk is the source of other risks

Introducing waqf based takaful model in India

Waqf is a unique feature of the socioeconomic system of Islam in a multi- religious and developing country like India. India is a rich country with waqf assets and the history of waqf in India can be traced back to 800 years ago. Most of the researchers, suggest how waqf can be used a tool to mitigate the poverty of Muslims. India has the third highest Muslim population after Indonesia and Pakistan. However, the majority of Muslims belong to the low income group and they are in need of help. It is believed that waqf can be utilized for the betterment of Indian Muslim community. Among the available uses of waqf assets, this paper focuses on how waqf can help Indian poor Muslims through takaful. Therefore, this paper is proposing to introduce waqf based takaful model in India. In addition, how this proposed model can be adopted in India is highlighted. It is believed that this proposal will be the interests of Muslim community, insurance operators and regulator

Is time to implement a comprehensive corporate governance framework for banks in United Kingdom?

Corporate governance is part and parcel of banking business activities. The issue of governance can be traced back to the birth of the corporation and many corporate governance guidelines have been introduced to minimize the problems. Among the countries who have introduced corporate governance codes, United Kingdom is the first and earliest country which introduces the corporate governance code and it subsequently improves the code. However, when the UK history of governance issues are examined, the existing code is not able to solve the contemporary governance problems. Among the issues, this paper highlights the existing code is not really comprehensive enough to cover the responsibility of board of directors towards the risk management, transparency of information, competency of directors and role of institutional ownership and reconciliation of stakeholders’ interests. Therefore, this paper suggests there is a need for a more comprehensive corporate governance code in UK

Is any defect in Islamic banking products? a case study of BBA

The rapid growth of Islamic banking and finance plays significant role to provide the financing facility for both Muslims and non-Muslims. One of the most popular Islamic banking products for property financing is Bay‟ Bithaman Ajil (BBA). It has been widely used in Malaysian banking environment although this type of product is not allowed in Middle East. When BBA is used to finance for any incomplete property, the unethical problems arise. It is because the banks are forcing the customers to pay and at the end, the customer does not occupy the property and at the same time, they are in debt. Banks should be taking responsibility, rather than putting the entire burden on the customers, in the case of default by property developer. This paper suggests the regulators, industry players and shari‟ah scholars to revisit the validity issue of BBA financing for the incomplete product

Is Islamic insurance an alternative to conventional insurance?

The significance and importance of Takaful in the Islamic Finance has captured the attention Muslim communities in today’s world. Takaful can be seen as an alternative to conventional insurance due to its strong foundation of Islamic principles which are based on the concept of brotherhood, mutual co-operation and solidarity. It has become a fast growing and developing industry with great potential and has certainly evolved into a comprehensive system which eliminates non-Shari’ah compliant features such as interest, uncertainty and gambling that exist in the conventional insurance

Prospects of Islamic insurance in India

Life and risk cannot be separated however it can be minimized through insurance. It is the main reason why insurance plays significant role in our daily life. Insurance is a policy between the insured and insurer to provide the benefits in the case of misfortune of the insured. However, from the Islamic perspective, insurance contract contains the prohibited elements such as interest, uncertainty and gambling. This calls for an alternative insurance, i.e. Islamic insurance, suitable for both Muslims and non-Muslims. Many Muslim and non-Muslim countries have introduced Islamic insurance. India is ranked in the third highest Muslim population country after Pakistan and Indonesia. Thus, the potential growth of Islamic insurance is high and this paper highlights the prospects of Islamic insurance in India