Understanding Islamic Finance - Doha Academy of Tertiary Studies

Contentsxiii11.4.5 Combining Two Contracts 28911.4.6 Takaful/Insurance Expenses 29111.5 Islamic Banks’ Ijarah Muntahia-bi-Tamleek 29111.5.1 Procedure for Ijarah Muntahia-bi-Tamleek 29311.5.2 Issues Concerning Modern Use of Ijarah 29511.5.3 Assignment of the Leased Assets and Securitization of Leases 29711.5.4 Potential of Ijarah 29711.6 Summary of Guidelines for Islamic Bankers on Ijarah 29812 Participatory Modes: Shirkah and its Variants 30712.1 Introduction 30712.2 Legality, Forms and Definition of Partnership 30812.2.1 Partnership in Ownership (Shirkatulmilk) 30912.2.2 Partnership by Contract (Shirkatul‘aqd) 30912.3 Basic Rules of Musharakah 31212.3.1 Conditions with Respect to Partners 31212.3.2 Rules Relating to Musharakah Capital 31312.3.3 Mutual Relationship Among Partners and MusharakahManagement Rules 31412.3.4 Treatment of Profit and Loss 31612.3.5 Guarantees in Shirkah Contracts 31812.3.6 Maturity/Termination of Musharakah 31812.4 The Concept and Rules of Mudarabah 32012.4.1 The Nature of Mudarabah Capital 32312.4.2 Types of Mudarabah and Conditions Regarding Business 32412.4.3 Work for the Mudarabah Business 32512.4.4 Treatment of Profit/Loss 32512.4.5 Termination of a Mudarabah Contract 32712.5 Mudarabah Distinguished from Musharakah 32712.6 Modern Corporations: Joint Stock Companies 32812.7 Modern Application of the Concept of Shirkah 33012.7.1 Use of Shirkah on the Deposits Side of the Banking System 33112.7.2 Use of Shirkah on the Assets Side 33212.7.3 Securitization on a Shirkah Basis 33412.8 Diminishing Musharakah 33712.9 Diminishing Musharakah as an Islamic Mode of Finance 33912.9.1 Diminishing Musharakah in Trade 33912.9.2 Procedure and Documentation in DiminishingMusharakah 34012.10 Summary and Conclusion 34313 Some Accessory Contracts 34713.1 Introduction 34713.2 Wakalah (Agency) 34713.2.1 Types of Wakalah 34713.2.2 Wakalatul Istismār 34913.3 Tawarruq 349