Understanding Islamic Finance - Doha Academy of Tertiary Studies

510 Understanding Islamic Financecapital markets (Continued)Sharī´ah principles 390capitalism 3, 35–6commercial law, see contracts and transactions,laws ofcommunism 3components, of Islamic economic systemfactors of production 35–7individual freedom 37–8liberalism vs state intervention 38–41ownership of commodities and wealth 33–4welfare concept 34–5conditional sales 144–5Contract Act of 1872 in English law 107contracts and transactions, laws ofAqd (Contract) 103–5Bai ′ al Istijrar 355banking 112–13categorization of goods 102–3communicative and noncommunicativecontracts 124–5contingent/conditional contracts 126–7difference between Ibādāt and Mu’āmalāt105elements of 106–10general framework 105–6Ju’alah 351–5Māl or property in Islamic commercial law101–2Mudarabah 344–5Musharakah 345–6ownership 102–3promises in respect of transactions 104–5with respect to the exchange of goods 102rules of validity 110–14, 118–20Salam 262–3terminology 103–5void (Batil) contracts 123–4voidable or F’āsid contract 120–3W’adah/’Ahd and related matters 114–17Wakalah (agency) 347–9contracts of agency (Wakalah) 113conventional bankingdifferences with Islamic banks 447–54relationship with Islamic banks 384credit cards 379–80credit sale (Bai ′ Mu’ajjal) 213criticisms, on Islamic bankingdifferences with conventional bankingpractice 447–54different Sharī´ah interpretations 441–2divergence from theory and practice 445–6inflation and interest 438–9, 441linking of money to real assets 455–6meaning and connotation of Riba 436–7modes of practice 442–4money capital 437–8penalty system 454–5regard to the practice 435–6related to the philosophy and concepts434–5time value of money 439–40trading aspects 444–5use of interest as Seed/Base capital 446–7Daaera-e-Maarif al Islami (the Encyclopaediaof Islam in Urdu) 50debit cards 379debt servicing and exploitationdebt relief packages 5debt vs equity 85–6imbalances in external payments 7as a problem of underdeveloped countries(UDCs) 4–5state of developed countries 5, 7state of emerging economies 6–7deposit side, of Islamic bankscurrent deposits 189management on a Mudarabah basis 190–1savings deposits/investment deposits/termdeposits 189–90derivatives 209–11destabilization of economy 6devotional acts, see IbādātDiminishing Musharakah (DM)case study 341–2as Islamic mode of finance 339–43overview 337–9DP World’s Nakheel Sukuk 412–13economic growth and socio-economic justicefactors responsible 8–9inequality of income distribution 7under neoliberalism 7economic scenario, in neoclassical framework3–4Emirates Islamic Bank Credit Card 381–2exchange rules 87–9export financing 372factors of production 36, 57fee-based services 384–6