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Islamic finance at a crossroads : the dominance of the asset-based sukuk.

Ahmed, Habib (2010) 'Islamic finance at a crossroads : the dominance of the asset-based sukuk.', Butterworth's journal of international banking and financial law., 25 (6). pp. 366-367.

Abstract

In mimicking conventional finance, Islamic finance is focusing on the legalistic forms and ignoring the substance of Islamic law. Long-term growth of the industry will depend on the dominance of substance over the form. KEY POINTS * The principles of Islamic law governing financial transactions can bring about stability in the financial system. * However, by replicating conventional financial products and focusing on the legalistic forms only, the practice of the Islamic financial industry is diluting the principles of Islamic law. * In the sukuk market, the overwhelming majority of sukuk are asset-based with the primacy of form over substance. * Moving to a more substance-based Islamic finance is needed to reduce the reputation risk and integrity of the industry.

Item Type:Article
Full text:PDF - Published Version (14Kb)
Status:Peer-reviewed
Publisher Web site:http://lnbconnect.co.uk/vmchk/Journals/Butterworths-Journal-of-International-Banking-and-Financial-Law.html
Record Created:10 Jan 2011 18:20
Last Modified:28 Jan 2011 16:42

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