Understanding Islamic Finance - Doha Academy of Tertiary Studies

Index 513modern use of 287–91risk management of 299–300letters of credit (L/C) 385–6letters of guarantee (L/G) 384–5life insurance policy 427liquidity management 374–5livelihood, in Islamic economics 23loan and debt, in Islamic commercial lawBai ′ al Dayn (sale of debt/debt instruments)172and banking system 158Hawalah (assignment of debt) 167–8illegality of commercial interest 157–8impact of inflation on 172–4instructions for creditor 162instructions for debtor 161–2penalty on default 165–7rebates in payments 163–5references from Holy Qur’ān 159repayment of loan/debt 162–3repayment of principle alone 160security/guarantee (Kafalah) in loans168–72substance of loans 159–60terms defined 155–7value of money in 160–1loans and debts, prohibition of, see Riba,prohibition ofMabi’ (the subject of sale) 102Maisir and Qimār, prohibition ofdifference between Maisir and Qimār 62prize bond schemes and Islamic principles63–4references in Holy Qur’ān 62Māl, see property, in Islamic commercial lawMaslaha-e-Mursalah 22Milk ud Dayn 102Milk ul ’Ain 102Milk ul Manf’at 102Mithāq 103Mithli goods 102–3Mixed Portfolio Securities/Sukuk 406–7monetary policiescreation of money in Islamic perspective92–4currency rate fluctuation and settlement ofdebts 94–6status of paper money 91trading in currencies 91–2Mu’āmalāt, see contracts and transactions, lawsofMurabahaaccounting treatment 236–7agreements in import financing 235–6in classical literature 215–16conditions for 217–20financing for exports 237form of Murabaha to Purchase Orderer(MPO) 222–9issues in 229–33need for 216–17precautionary measures for 233–4risk management 234–5structures 220–2Murabaha-based credit cards 383Mudarabah contractaccounting treatment of 344–5concept 319–22deposit directives in 331–2execution of 325nature of capital invested 323–4termination of 327treatment of profit and loss 325–7types and conditions regarding 324vs Musharakah contract 327–8Mudarabah model, of Takaful system 424, 426Mudarabah/Muqaradah Sukuk 398–9Murabaha to Purchase Orderer 104Mudarabah (partnership in the profits of capitaland labour) 311–12Musawamahas a mode of financing 238overview 234Musharakah contract 312AAOIFI Standard for stock company 328–9accounting treatment of 345–6application in trade finance 332–3as a basis for securitization 334case studies 334–7deposit directives in 331flow of transactions for running business333–4guarantees 318, 334maturity and termination 318–19mutual relationship among partners 314–16rules to capital investment 313–14treatment of profit and loss 316–17,319–20vs Mudarabah contract 327–8for working capital requirements 370