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

Ahmed, Habib

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

Ahmed, Habib

Authors

Professor Habib Ahmed habib.ahmed@durham.ac.uk
Professor

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.

Citation

Ahmed, H. (2010). Islamic Finance at a crossroads: the dominance of the asset-based sukuk. Butterworths journal of international banking and financial law, 25(6), 366-367

Journal Article Type	Article
Publication Date	Jun 1, 2010
Deposit Date	Dec 22, 2010
Publicly Available Date	Jan 27, 2011
Journal	Butterworths journal of international banking and financial law.
Print ISSN	0269-2694
Publisher	LexisNexis
Peer Reviewed	Peer Reviewed
Volume	25
Issue	6
Pages	366-367
Public URL	https://durham-repository.worktribe.com/output/1545162
Publisher URL	http://lnbconnect.co.uk/vmchk/Journals/Butterworths-Journal-of-International-Banking-and-Financial-Law.html