Islamic banking in the Philippines

The first and and only Islamic bank in the Philippines, the Al-Amanah Islamic Bank, began its operations in 1973 and was recently bought by the Development Bank of the Philippines.

What sets this bank apart from the traditional banks in the country? Similar to any Islamic bank, it religiously abides by the Shariah, zeroing in on its transaction rules. Most people bridge this type of banking to the concepts of prohibited interests (usury) and profit sharing.

For example, profit, according to the Qíuran, is only warranted if it yields additional values in the economy and society; unwarranted profits are surplus values ‘without a counterpart.’ Working under such a definition, Islamic banking minimizes exploitative contracts and unjust transactions.

Early Islamic doctrines emphasize interest as a surplus value without an equivalent real value, thus making it unacceptable. Sukuk, as an example, is an Islamic financial instrument. It is the counterpart of bonds, but differing in the aspect that these types of bonds are non-interest-bearing and is utilized without fixed income.

Islamic banking also prohibits transactions related to alcohol and pork, in deference to common Islamic doctrine. Ethics and morality are at its pedestal; thus, gambling and other games of chance are also restricted.

How then can this financial service be highly profitable?

In Islamic banking, loans either carry service charges or entail absolutely zero costs. Loans with service charges do not impose interests but asks for service compensation. This amount is further restricted by the price ceiling decided upon by authorities. Loans with no charges, meanwhile, provide a more socially responsible view made by the agents of Islamic banking. These loans are granted to farmers, to the needy, and to the other unfortunate sectors.

Clearly, these loans do not provide for a big percentage of bank profits. Hence, trade and investment financing dominate the scene. The catch, though, is to operate these activities under PLS or the profit and loss sharing scheme.

For example, in compliance with PLS, Mudaraba provides a venue to put together resources, monetary or not, in erecting a financial plan or activity. Profits and risks are shared by the bank and entrepreneur. Similar to a venture capital, the financial risk gives justification for the profits that it will rake.

This very activity is an innovative way to integrate and benefit the society by providing funds to plausibly efficient and relevant projects. A probable dilemma lies in the associated expenses in measuring and examining participants and risks, as well as negotiations and further transactions costs.

Rooting from the fact that Islamic banks are ‘keepers and trustees of funds’, another source of profits are gifts. These gifts lure in more customers to open savings accounts, increasing their capital. Gifts are portions of profits from the bank investments using the savings as capital source. A concept of a ‘goodwill loan’ is also utilized, stating that the debtor is only asked to pay the principal. An option to give a token of appreciation is placed on the table, without any form of promises. This transaction is the epitome of the Islamic interest-free loan.

The estimated rate of return concept, on the other hand, states that the bank estimates profit before financing an activity. If in actuality the project earns more that what was gauged primarily, the bank gives the excess to the client. This truly reflects their concept of profit with actual value or counterpart.

Are the Islamic banking schemes effective?

It may come as a surprise that some of the biggest companies in the world utilize Islamic banking for funding. These companies reportedly include IBM, Daewoo, GM (General Motors) and Alcatel.

The main difference between traditional and Islamic banking lies in their concepts of profit. The maximization goal of traditional banks targets the shareholders; on the contrary, Islamic banks hurdle the interest of all economic agents.

A study conducted by Celent concluded that assets under these Islamic banks grew more rapidly than those under the conventional ones. Generally, assets linked to Islamic banking experienced a growth of over 10% for the past decade. The Economist also estimates that such assets amount to US$822. This system also remained formidable in the face of the recent financial crisis.

Trends are geared towards the untapped markets with a relatively high potential for growth. These locations include Turkey and the majority of North Africa. According to Standard and Poor’s, however, the profits of Islamic banking may be grabbed by conventional banks once they start offering a vast array of Islamic financial services.

Islamic Banking : A global perspective

Hotspots for Islamic banking are found all over the world, with the Middle East taking almost two-thirds of the entire pie. Mature markets in this region include Saudi Arabia and Kuwait. The former houses Al-Rajhi Banking & Investment Corp., the world’s largest Islamic bank, while the latter invests on project finance.

Services offered by these Islamic banks include current accounts, credit cards, money transfers and mortgages. Although these banks collide under a unitary belief, practices may vary depending on the laws of land where they are located or their special objectives.

Moreover, the political climate and numerous circumstances pave the way for novelty and unique techniques and treatments. Specializations within this system are apparent. UAE focuses on trade financing, and Bahrain, on corporate finance and investment.

Current trends and issues

At present, conventional Western banks are establishing subsidiaries which are Islamic in nature. Otherwise, they create special divisions to cater to the needs of their clients. The other side of the banking system coin counteracts this by developing ways and means to provide cost-effective packages to Muslims and non-members alike.

Truly, competition urges economic agents to innovate and design efficient services to benefit everyone, big or small, regardless of religion and beliefs. Even the Vatican stated that Islamic finance can be a ‘cure for ailing markets.’

The current issue of excess liquidity calls for rule reviews regarding the matter. Rules on financing in Islamic banking hinder trade, making the entire system inefficient. One of the main functions of financial institutions is to channel financial resources or money from those who have it to those who need it.

In conclusion, the probable secret formula of Islamic banks is that they cater to the special needs of their clients, especially the members of the Muslim community. It is their special need and task to do bank-related activities in accordance to the Qíuran, and Islamic banks simply does that.

In the Philippine case, Al-Amanah is continually in existence due to the unique services that it provides to our Muslim brothers and sisters, thus easing the banking process and including them in the financial scene and game.

Source : bwo

Sharia banking grows strong in Indonesia

It was with good reason that the Indonesian Ulema Council and the government established PT Bank Muamalat Indonesia on Nov. 1, 1991. Such a move was welcomed by the public, which invested Rp 84 billion in shares when the bank was established.

The people of West Java also showed their support by injecting Rp 106 billion into the bank. Although its business was not too bright in its early days, the bank recorded a profit of Rp 372.5 billion in the second quarter of 2009. The achievement of Bank Muamalat is proof of the great potential of sharia banking in Indonesia. Sharia banking is based on Islamic law.

The fact that Indonesia has the world’s largest Muslim population creates a huge market for sharia banking, and Bank Muamalat became the pioneer that made a breakthrough in the existing concept of banking.

Huge potential for sharia banking still exists in the country. Bank Indonesia data reveals there are currently five sharia banks operating in the country, namely Bank Syariah Mandiri, Bank Muamalat Indonesia, Bank Syariah Mega, Bank Syariah Bukopin and Bank Syariah BRI. Twenty-six other banks have sharia banking units, such as Bank Permata, Bank BNI, Bank CIMB-Niaga, Bank Danamon and BPD DKI.

The country’s Muslims, accounting for 80 percent of the estimated 240 million population, are the target market of sharia banking. This means that 31 sharia banks or bank with sharia units are available to serve about 192 million Muslims.

Major conventional banks are also interested in establishing sharia banking units due to the huge potential in the country. Bank Indonesia predicts that sharia banks will enjoy business growth of between 5 and 5.5 percent this year due to high consumer spending and exports.

“Banks based on Islamic law are predicted to enjoy further growth in 2010,” said Darmin Nasution, acting governor of Bank Indonesia, as quoted by BI deputy governor Budi Mulya at a seminar on sharia banking in Indonesia last month. Darmin added that sharia banks would continue to flourish due to the organic growth within existing banks and the establishment of new sharia banks and units.

Another reason for the growth potential of sharia banks is their ability to attract customers from conventional banks due to the impact of the global financial crisis. The universal principles held by sharia banks also make the growth possible. Hence, more and more customers are turning to sharia banks.

The profit sharing concept offered by sharia banks is attractive to most businesspeople in Indonesia.

This method makes it possible for a customer to benefit from a loan. In conventional banking, a customer must pay interest on a loan regardless of whether the business is successful or not.

However, with the sharia profit sharing concept the customer will not have to bear the burden of paying interest if his or her business fails.

Sharia banking products are also varied and no less attractive than conventional banks’ products.

Bank Syariah Mandiri, for example, makes available various savings products, such as personal, haj, education, time deposit and so forth. Naturally, the bank also offers various types of loans based on the profit sharing sharia concept.

It is predicted that more sharia banks will come into existence soon to compete with the five already established as the public is now more aware of the superior features of sharia banks. Among the banks that have applied to open sharia banks are: Bank BCA Syariah, Bank Jabar-Banten Syariah, Bank BNI, Bank Victoria and Bank Panin Syariah. Some bank authorities are targeting 26 percent growth for sharia banks with the assumption that the growth is based on organic growth.

Mulya Siregar, Bank Indonesia deputy director, said on Dec. 8, 2009 at a seminar on Islamic banking that sharia banks could grow by a maximum of 81 percent for asset ownership, adding that such growth could only be achieved if related government regulations supported the growth.

If government regulations did not fully support it, he said, growth would only be about 43 percent, which was based on the contribution of new players or new banks in this sector.

Bank BRI Syariah president director Ventje Raharjo also has a similar view on regulations, especially on the taxation applied to sharia banks. He said the taxes should be more lenient in this case.

“Sharia banks need to be given certain incentives, such as leniency in taxation and a lower ratio of capital ownership, or there should be a sharia banking development allocation in the state budget,” he said.

The success of sharia banking in Indonesia has also attracted some foreign banks, although currently only HSBC has a sharia unit, called HSBC Amanah. Mulya Siregar, Bank Indonesia’s head of Islamic finance, said there were strong rumors that new banks from Malaysia and Bahrain would establish sharia branches here.

In the midst of waning customer trust in particular conventional banks, sharia banks seem to provide a safer alternative for customers. However, along with the huge potential and many opportunities for sharia banks there are also challenges facing them as they still have to educate customers about the superior features and products of sharia banks that are equal to or better than those of conventional banks.

Iwan Suci Jatmiko


Dissertation Topics in Islamic Finance

imagesSelection of a dissertation topic is complicated and time consuming task. In fact, it is the most important activity in dissertation writing. The students in Islamic Finance field should go for a dissertation topic that interests them and that has enough research-able material associated to it. The Islamic Finance students are not encourage to select a topic or area in which no researcher has done as they will have to face the problem in terms of information collection.

The selection of dissertation topic is not an imaginative activity. The student start the topic selection keeping their interest area and available information to them. The topic selection should happen on random basis as it will lead to problems in collecting information in that area.

The Islamic Finance students should spend time in researching journal, books, articles, news papers, essays, web and other written materials for information search in their chosen areas. There are lot of research articles, book and websites on Islamic finance field. The web can used by the students as main source of information as it have most of the libraries and periodicals or at least they have abstract of the research done. The students have to select several dissertation topics in their research area out of them, they will have to look for best suitable topic based on interest and selection criteria. The dissertation should be current and contemporary which will make the reader interested and find no problems in understanding the context.

Dissertation proposals – Doctoral Level and master level

These are dissertation or thesis proposal. Researcher are free to develop based on these themes. These proposal includes the marketing, information technology , strategic management, human resource management and contemporary thoughts.

The author expects contribution from the researchers and students for preparation of dissertation or thesis topic selection( These just sample can be modified as per user requirements)


Islamic banking
Islamic Financial Instruments
Islamic Financial Instruments development
The role of Sharia’a boards in Islamic financial instrument development
The sources of uses of funds in Islamic banks
Islamic banking product to help the international trade
Compare the customer deposits between Islamic and conventional bank
Murabaha or Ijara : The best financing
Mudaraba or Musharaka : The best equity financing

Cooperation with….
Study on How do Islamic bank cooperate with conventional bank in international trade
Study on How do Islamic bank cooperate with central banks in conventional environment
Structure and functions
The function of commercial banking: Compare the Islamic and conventional banks
Structure of Islamic bank : compare with the conventional bank
Internalization of Islamic banks
Customer relationship between the conventional and Islamic banks
Profit and Loss sharing mechanism of Islamic Bank

Interbank transaction of Islamic bank – current system and proposals
Interbank borrowing of Islamic banks
Tawarruq as a tool of interbank borrowing
Interbank bench mark for Islamic banks – proposals

Mergers and Acquisition
Cross border mergers and acquisition of Islamic banks
Do mergers or acquisition will affect the efficiency of Islamic banks
Islamic banks entry – from a country perspective

Corporate governance, accounting and Risk management
Risk management in Islamic banks

Corporate social responsibility
Islamic bank and corporate social responsibility
Islamic banking and poverty alleviation
Corporate Social Responsibility of Islamic Banks

Performance of Islamic bank and conventional bank in a selected country
Measuring the productivity of Islamic banking
Islamic Banks performance in industrial lending
Measuring the performance of Islamic Banks

Customer relationship, marketing, strategy
Investigating the Customer Relationship Management in Islamic banks – (case can be taken from any bank or country perspective)
Investigating the customer loyalty in Islamic banks
Identifying the competitive strategy of Islamic banks: a comparison with conventional banks
Developing a model for customer loyalty in Islamic banks
Brand management of Islamic Financial institutions
Customer loyalty for Islamic banks
Consumer behavior for Islamic credit cards

Customer perception of Islamic banking windows in Conventional Banks
Investigating the CRM activities in Islamic Banks
Switching behavior of Conventional banks to Islamic Banks – An international perspective

Credit crises
Islamic mortgage system as a solution for current credit crises
The effect of credit crises in Islamic banking
Measuring the effect of credit crises in Islamic Banking
Islamic banks less affected by credit crises

History, development and challenges
Development or establishment of issues of Islamic banking – in particular country or region
Islamic Banking in (country) – Development, perspectives and evolution
Challenges faced by the Islamic banks
Challenge: Arabic terminology – Merits and demerits

Islamic banking and knowledge management
Knowledge Management in Islamic banks
Skill gap and recruitment gap for Islamic financial institution

Sharia’a board
Sharia’a Boards in Islamic banks
Influence of religious boards or Sharia’a councils in Islamic banks

Islamic Economics
Fiscal policy Islamic economy

Inflation in Islamic economy

How Islamic economy can reduce the inflation

Contribution of Islamic economy in infrastructure development of developing country

How the choices made by human race in Islamic economic system with scare resources
Is resource scare in Islamic Economy?
Opportunity cost from Islamic Economics perspectives
Reducing the effects of climate change
Development of SME in Islamic based economies
Islamic economy and Adams Smith a comparative study
Labor migration in Islamic economy
Unemployment and Islamic economic system
How Islamic economic system can reduce the unemployment
Solution for unemployment under the Islamic economy
Poverty alleviation in Islamic economy
Islamic economic model as solution for global economic crises
International trade under Islamic economic model
Foreign exchange depreciation and appreciation in Islamic economic model
Micro finance in Islamic economy
How Market equilibrium decided in Islamic economy
Comparative analysis of socio-economic development of Islamic economy and socialist economy
Comparative analysis of socio-economic development of Islamic economy and capitalistic economy
How the Islamic economic models contribute to the productivity increase
Contribution of Islamic economy for financial stability and macroeconomic gains
Capital mobility in Islamic economic system
Islamic finance system and economical growth
Islamic finance system and economical growth
Islamic banks in poverty alleviations
Economical functions of Islamic Financial Market

Islamic Capital Market
How does an Islamic financial market works
Investment: An Islamic perspective
Development or Growth of Islamic capital market
The products in Islamic capital market
Filtering the stocks for Islamic investments

New topics (latest edition)
Analysis of derivatives instruments by Islamic banks
Comparative study of Islamic and Conventional banks
Compare Value at Risk between Sukuk and conventional bonds
Credit Risk Management in Islamic and Conventional Banks: Analysis
Derivatives instrument used in Islamic Finance
Financial engineering in Islamic finance industry : Country comparison.
How corporate governance is different from conventional banking and Islamic banking
How Islamic banks can help in Economic Development
Islamic banking experiences : A country comparative analysis or study
Islamic Banking in the ……. (country): Opportunities and threats
Islamic Banking Theories and Practices : country analysis
Islamic banking windows/ system into Conventional Banking Systems
Islamic Finance: As an alternative social responsible and ethical investing.
Islamic Financial Institutions and Products
Legal and ethical issues in Islamic banking
Liquidity Risk Management in Islamic and Conventional Banks: Analysis
Micro Financing in Islamic finance industry : For country developments.
Murabaha Financing vs. Conventional leasing: cash flow and risk analysis
Transferring from conventional to Islamic banking
Current account contracts in Islamic banking : A comparative study between Islamic contracts of Amanah, Qard Hasan, Wadiah


Islamic finance should help takaful firms outperform

The investment firm based at the Dubai International Financial Centre says in a report that takaful firms will benefit from favorable demographics and the growing availability of Islamic financial products. Takaful is similar to conventional insurance but investments are held to Sharia-compliant assets.

A quarter of the world’s population is Muslim but takaful contributions account for only half a per cent of premiums globally.

However, from 2006 to the third quarter of 2009, Islamic insurers registered a compound annual growth rate of 26.5 per cent, compared with 19.2 per cent for conventional insurance.

The bank said it expected the industry to grow faster than local economies. In a report released last Thursday, the World Bank said it expected the GDP of the MENA region to grow by 3.7 per cent this year and 4.4 per cent in 2011.

By comparison, Alpen expects the takaful industry to grow 16.1 per cent a year through 2012, said Tommy Trask, the executive director and head of research at Alpen.

But Mr Trask noted the predicted growth is far from assured. Because they are limited to Sharia-compliant assets, most takaful firms are heavily invested in regional equities and property.

As Islamic finance becomes more mainstream, takaful firms will be able to reduce risk, he said.

The report noted the takaful industry has about 72 per cent exposure to property and equities, compared with 54 per cent for conventional insurance companies in the region.

“Such holdings would normally be capped at 10 to 20 per cent of total assets under more sophisticated regulatory regimes,” it said.

The Bank of Malaysia in Nov 2009,  said the value of Sharia-compliant assets under management could top $1 trillion globally by the end of 2010.

Source : the nation

أطروحة في موضوعات التمويل الإسلامي

أطروحة في موضوعات التمويل الإسلامي


استيعاب المصارف الإسلامية

أداء المصارف الإسلامية والبنوك التقليدية في بلد مختارة

عبر الحدود عمليات الاندماج والاستحواذ للبنوك الإسلامية

لا الاندماج أو الاستحواذ سوف يؤثر على كفاءة المصارف الإسلامية

إدارة المخاطر في المصارف الإسلامية

البنك الإسلامي والمسؤولية الاجتماعية للشركات

دخول البنوك الإسلامية — من منظور قطري

التحقيق في إدارة علاقات العملاء في المصارف الإسلامية — (الحالة التي يمكن اتخاذها من أي مصرف أو من منظور البلد)

التحقيق في ولاء العملاء في المصارف الإسلامية

وضع نموذج لولاء العملاء في المصارف الإسلامية

الخدمات المصرفية الإسلامية والتخفيف من حدة الفقر

قياس إنتاجية العمل المصرفي الإسلامي

تطوير أو إنشاء قضايا الأعمال المصرفية الإسلامية — في بلد أو منطقة معينة

الخدمات المصرفية الإسلامية وإدارة المعرفة

نظام التمويل الإسلامي والنمو الاقتصادي

ولاء العملاء للبنوك الإسلامية

أداء المصارف الإسلامية في الإقراض الصناعي

الإسلامية نظام الرهن العقاري كحل لأزمة الائتمان الحالية

التحقيق في أنشطة إدارة علاقات العملاء في المصارف الإسلامية

تبديل السلوك من البنوك التقليدية إلى البنوك الإسلامية — منظور دولي

إدارة العلامة التجارية للمؤسسات المالية الإسلامية

إدارة المعرفة في البنوك الإسلامية

العملاء تصور نوافذ الخدمات المصرفية الإسلامية في البنوك التقليدية

الخدمات المصرفية الإسلامية في (البلد) — التنمية ووجهات نظر والتطور

المصارف الاسلامية في alleviations الفقر

الفجوة في المهارات والتوظيف الفجوة لمؤسسة مالية إسلامية

تحديد الاستراتيجية التنافسية للمصارف الإسلامية : مقارنة مع البنوك التقليدية

تأثير لوحات دينية أو المجالس الشرعية في البنوك الإسلامية

سلوك المستهلك لبطاقات الائتمان الإسلامية

المسؤولية الاجتماعية للمصارف الاسلامية

اقتصادا وظائف السوق المالية الإسلامية

قياس أداء المصارف الإسلامية

كيف يعمل الأسواق المالية الإسلامية

السياسة المالية الاقتصاد الإسلامي

التضخم في الاقتصاد الإسلامي

كيف الاقتصاد الإسلامي يمكن أن تقلل من معدل التضخم

الاقتصاد الإسلامي مساهمة في تطوير البنية التحتية للبلدان النامية

كيف الاختيارات التي تقوم بها الجنس البشري في النظام الاقتصادي الاسلامي مع الموارد الشحيحة

هو الخوف من الموارد في الاقتصاد الإسلامي؟

تكلفة الفرصة البديلة من منظور الاقتصاد الإسلامي

الحد من آثار تغير المناخ

تنمية المنشآت الصغيرة والمتوسطة في الاقتصادات القائمة الإسلامية

الاقتصاد الإسلامي وادامز سميث دراسة مقارنة

هجرة العمالة في الاقتصاد الإسلامي

البطالة والنظام الاقتصادي الإسلامي

كيف النظام الاقتصادي الإسلامي يمكن أن تقلل من البطالة

حلا للبطالة في إطار الاقتصاد الإسلامي

التخفيف من حدة الفقر في الاقتصاد الإسلامي

النموذج الاقتصادي الإسلامي كحل للأزمات الاقتصادية العالمية

التجارة الدولية في إطار النموذج الاقتصادي الاسلامي

انخفاض قيمة صرف العملات الأجنبية والتقدير في النموذج الاقتصادي الاسلامي

للتمويل الصغير في الاقتصاد الإسلامي

كيف توازن السوق قررت في الاقتصاد الإسلامي

تحليل مقارن للتنمية الاجتماعية والاقتصادية في الاقتصاد الإسلامي والاقتصاد الاشتراكي

تحليل مقارن للتنمية الاجتماعية والاقتصادية في الاقتصاد الإسلامي والاقتصاد الرأسمالي

كيف يمكن للنماذج الإسلامية اقتصادية تسهم في زيادة الإنتاجية

مساهمة الاقتصاد الإسلامي لتحقيق الاستقرار المالي والماكرو المكاسب الاقتصادية

حرية انتقال رأس المال في النظام الاقتصادي الاسلامي

google translation

The struggle continues in Dow Jones Islamic Market

The stock market performance of the first four weeks is supposed to give us an idea of how indices will develop throughout the entire year (2010)

If this theory holds, then 2010 will be a mixed and volatile period which will not mark the long expected recovery. In January (as of the close of trading on January 25), only 10 out of a selection of 25 equity indexes of the Dow Jones Islamic Market (DJIM) universe achieved positive rates of returns.

The DJIM Turkey Index topped the charts and closed 8.72% higher at 3,525.78 points. The bourse at the Bosporus was followed by the DJIM Japan Index (up 4.54%% at 1,044.30 points) and the Dow Jones-JS Pakistan composite (gaining 3.80 % at 11,147.77 points). In a rare kind of closing, the DJIM Asia/Pacific Index ended unchanged (+/- %) at 1,309 points. The Dow Jones Citigroup Sukuk Index gained 1.29%, closing at 115.91 points.

According to Alia Moubayed, Senior Economist at Barclays Capital in Dubai, emerging markets are less dependent on the economic development in the seven industrial states, the old G7, but rather more and more on China. “Emerging markets decoupled step by step from the G7”, she explained in a speech at the DIFC Knowledge Series in Dubai on January 26. “While the Beta-correlation with the G7 stood at a high 1.6 in the time between 1993 to 1999, this value decreased between 2001 and 2009 to 0.2, which indicates a rather uncorrelated development.” The emerging markets’ correlation with China, on the other hand, improved during the same time frames from 0.79 to 1.1.”

Ms. Moubayed’s observation is important for the Islamic Finance industry, since their strongholds are located in the emerging markets of the Middle East and North Africa (MENA) and in South East Asia, with Malaysia as its epicenter.

The BRIC equities (i.e. Brazil, Russia, India and China), however, started weakly into the new decade. The DJIM BRIC Index closed at 1,917.94 points (down 4.65%). The index was underperformed by the DJIM China Offshore Index (4.92% lower at 2,682.43 points) and the DJIM Dubai Financial Market (DFM) 10 Index (plummeting by 9.69% to 2,193.03 points). Compare these results with the Western bellwether: the Dow Jones Industrial Average in New York, which fell in January by 2.22 % to 10,196 points.

In relation to sector indexes, only the DJIM Health Care Index gained values, ending 0.97% higher at 2,505.08 points. The weak showing of the DJIM Basic Materials (down 3.34% at 2,365.79 points) as the worst performing sector might indicate that an economic recovery is still far from gaining momentum. This is disturbing for anyone looking to gauge the coming year because basic materials such as Aluminum, Chemicals, Copper, Gold, Iron and Zinc (which are Basic Materials) are needed for any real economic activity. Islamic Finance must be based on real assets and not on intangible monetary streams in order to be accepted or halal. Under Sha’riah, money cannot create addition money, because interest is impressible or haram.

Source : benama