Abd Muhsin, Asmaliyana

Kayadibi, Saim

M. Yusof, Aimi Zafirah

English

The International Islamic University Malaysia Repository

Islamic Banking and Finance Against ConventionalChapter 8124Islamic Bond (Sukuk) in the Contemporary Economic andFinance LifeAimi Zafrrah M. Yusof, Asmaliyana Abd Muhsin53and Saim KayadibiIntroductionSukuk (J4.>-4, its plural is Salek (4.>1- which means legalinstrument, deed, check; is an Arabic name for financialcertificate or Islamic equivalent of bond. Sukuk securities arestructured to comply with the Islamic law and its investmentprinciples to replace bond which contains the permissibleelements for example like charging or paying of interest anduncertainty of income (gharar). Sukuk financing resembles thesimilarly religious concept of gemach or Jewish interest-freeloans, which subscribe to both the positive Torahcommandment of lending money and the Torah prohibitionagainst charging interest on a loan. Such religiously-inspirednon-interest loan systems can be quite mystifying for outsiders.A good analogy is one of ethical or green investing. Empiricalevidence shows that sukuk were a product extensively usedduring medieval Islam for the transferring of financialobligations originating from trade and other commercialactivities. The essence of sukuk, in the modem Islamicperspective, lies in the concept of asset monetization - the socalled securitisation - that is achieved through the process ofissuance of sukuk. Sukuk constitutes partial ownership in a debt(Sukuk Murabaha), asset (Sukuk Al Ijara), project (Sukuk Al53 Graduate Student, Faculty of Economics and Management Sciences,International Islamic University Malaysia (HUM), Kuala Lumpur, Malaysia.

Islamic bond (Sukuk) in the contemporary economic and finance life

http://irep.iium.edu.my/20513/1/Islamic_Bond_%28Sukuk%29_in_the_Contemporary_Economic_and_Finance_Life.pdf

Islamic bond (Sukuk) in the contemporary economic and finance life

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