Islamic Financial Institutions

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SYLLABUS

FACULTY ECONOMIC AND BUSINESS

INTERNATIONAL PROGRAM FOR ISLAMIC ECONOMICS AND FINANCE (IPIEF)

1 Name of Course / Module

2 Course Code EI8462 3 Credit Value 3

4 Objective

This course expects to provide students with the:

Student able to analyze the concept of Islamic finance Instrument in current system, able evaluate by comparing between theory and practice.

5 Learning Outcomes

At the end of the course, students should be able to:

1. Understand the regulatory framework governing financial institutions.

2. Critically analyze Islamic banking instruments based on economic and Shari’ah principles

3. Critically analyze Islamic capital market, sukuk, Islamic insurance, islamic unit trust instruments based on economic and Shari’ah principles

4. Critically analyze the concept of islamic microfinace, LAZ/BAZ and other social institutions.

5. Able to analyze Islamic financial instruments in terms of purpose, structure, and pricing

6. Demonstrate analytical and teamwork skills in analyzing and structuring Islamic banking, Islamic money and capital market instruments.

6 Synopsis

This course covers Islamic financial institution markets including Islamic banking, Islamic money market, bond and sukuk markets, stock market, foreign exchange market, derivatives markets and commodities market. Also included are principles, regulatory framework of Islamic financial markets, collective investment schemes and selected case studies of Islamic securities.

7 References

Books

Islamic Financial System: Principle and Operation, ISRA.

LembagaKeuangan Islam di Indonesia, 2017. Abdul Qoyum, Elmatera, Yogyakarta.

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Al-Baraka (2001). Resolutions and Recommendations of Al-Baraka Symposia on Islamic Economy, 1981-2001. Jeddah: Al-Baraka.

Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). (2004). Sharia Standards: 1425-6 H/2004-5. Bahrain:

AAOIFI.

Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). (2004). Accounting, Auditing and Governance Standards for Islamic Financial Institutions: 1425-6 H/2004-5.

Bahrain: AAOIFI.

Adam, Nathif J. & Thomas, A. (2004). Islamic Bonds: You Guide to Issuing, Structuring and Investing in Sukuk. London: Euromoney.

Ahmed, Osman Babikir. (2001). Islamic Equity Funds: The Mode of Resource Mobilization and Placement. Jeddah: IRTI.

Ali, Salman Syed. (2005). Islamic Capital Market Products:

Development and Challenges. Jeddah: IRTI.

Ali, Salman Syed. (2008). Islamic Capital Markets: Products, Regulation and Development. Jeddah: IRTI.

Archer, Simon. & Karim, R. (2007). Islamic Finance: The Regulatory Challenge. Singapore: John Wiley.

Ayub, Muhammad. (2007). Understanding Islamic Finance. New Jersey:

Chichester: John Wiley.

Bank Negara Malaysia. (2007). Shari’ah Resolutions in Islamic Finance.

Kuala Lumpur: Bank Negara Malaysia.

Clifford Chance. (2009). DIFC Sukuk Guidebook. Dubai: Dubai International Financial Centre.www.difc.ae/index.php/download_file/- /view/353/

Iqbal, Zamir&Mirakhor, A. (2007). An Introduction to Islamic Finance:

Theory and Practice. Singapore: John Wiley.

Jaffer, Sohail (ed). (2004). Islamic Asset Management: Forming the Future for Sharia-Compliant Investment Strategies. London: Euromoney.

MohdAzmi Omar (2002). “Investment in Stock Market: Some Issues from the Islamic

Perspective”, inKonsepPerniagaan Islam. Universiti Brunei Darussalam

Obaidullah, Mohamed. (2004). Islamic Financial Markets: Towards Greater Ethics and Efficiency. New Delhi: Institute of Objective Studies.

Obaidullah, Mohamed. (2005). Islamic Financial Services. Jeddah : King Abdulaziz University.

Rayner, S.E. (1991). The Theory of Contracts in Islamic Law. 1^st edition. New York: Graham and Trotman.

Rose, Peter. S. (2008). Money and Capital Markets. 10^th edition. McGraw Hill Higher Education.

Vogel, F.E., & Hayes, S. (1998). Islamic Law and Finance: Religion, Risk and Return. Hague: Kluwer Law International.

Journal Articles;

Ahmed, H." Determinants of Profit Sharing Ratio in Project Financing:

A note." Islamic Economic Studies Vol. 9No.l. September 2001:

41-45

AnasZarqa, Project Evaluation and Time value-Discounting, Lessons in Islamic Economics, Vol 2, IRTI, Islamic Development Bank, 1998.

Badri, A.A, M Kadir, AAidham and Partners." The Syariah Adviser in

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Islamic Securities Issues: Time for Role Refinement." Islamic Finance Bulletin. Issue #3, RAM March 2004: 14-19

Bashir, A.H.M." Determinants of Profitability in Islamic Banks: some Evidence from the Middle East." Islamic Economic Studies Vol. 11 No.l. September 2003:31-57

Choudhury, M.A." Financial Globalization and Islamic Financial Institution: The Topics Revisited." Islamic Economic Studies Vol.

9 No.l. September 2001:19-38

Khan, M.F. "Cost of Capital for an Islamic Firm: The Case of the Islamic Development Bank (IDB)." Islamic Economic Studies Vol.4 No.l. December 1996: 67-72

Mirakhor, A." Cost of Capital and Investment in a Non-interest Economy." Islamic Economic Studies Vol.4 No.l. December 1996:

35-46

Obaidullah, M." Financial Engineering with Islamic Options." Islamic Economic Studies Vol. 6 No.l. November 1998: 73-103

Rosly, S.A." Islamic Bonds-Asset or Debt Securitization." Islamic Finance Bulletin. Issue #3, RAM March 2004: 25-28

Rosly, SaifulAzhar and SanusiMahmod. "Application of Bay' al- Inahin Malaysian Financial Markets." Arab Law Quarterly, September 2001.

Rosly, SaifulAzhar, and AziziCheSeman. "Juristic Viewpoints on Bay ' Al- 'Inahin Malaysia: A Survey." HUM Journal of Economics and Management, Volume 11, No. 1, December 2003.

Saadallah, Ridha, ‘Concept of Time in Islamic Economics”. Islamic Economic Studies Vol.2 No.1 1415H (1994).

Wan Abdul Rahim Wan Mohamed Ali. "Securitization of Debt Financing: The Islamic Alternative." Seminar on Islamic Private Debt Securities (IPDS), Securities Commission Malaysia, September 2001.

Zarqa, M.A "Istisna" Financing of Infrastructure Projects Islamic Economic Studies Vol. 4 No. 2. May 1997:67-74

8 Lecturer Abdul Qoyum, SE.I, M.Sc.Fin

9 Correspondence

IPIEF Room, Postgraduate building, ground floor E-mail: qoyum13@gmail.com

10 Consultation time By appointment

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11 Academic Evaluation

LO Method %

2, 3, 4, 5& 6 Case Analysis 20

2, 3, 4, 5 & 6 Project Paper 25

1, 2, 3, 4 & 5 Assignment/Quiz 20

2, 3, 4, 5 & 6 Participation 10

1, 2, 3, 4& 5 Final Examination 25 TOTAL 100

COURSE OUTLINE

Meeting Course Material Reading

1 Philosophy and Fundamentals of Islamic Banking and Finance

• Overview of financial system

• Objectives and characteristics of Islamic financial system

• Roles and functions of financial market

• Financial assets, money and financial transactions in the global financial system

•

Understanding the shariah objective and its relationship with Islamic Finance.

Islamic Financial Institution : Theory and Practices, ISRA Book.

Lembaga Keuangan Islam, Abdul Qoyum

2 Regulatory framework of Islamic banking and finance

• Historical Development of Islamic Finance

• Emerging Interest in Islamic Finance

• Indoneisa: A Comprehensive Islamic Financial System

• Regulatory Framework of Islamic Finance

• International Bodies Governing Islamic Banking and Finance

•

Legal Framework Governing Islamic Banking Malaysia

3 Islamic Banking System and Operation: Source of Fund

4 Islamic Banking System and Operation: Islamic Financing

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5 Competency Test I

6 Shariah Compliant Equity

Islamic Financial

Institution : Theory and Practices, ISRA Book.

7 Treasury product and Islamic Money Market

Islamic Money Market in Indonesia

8 Sukuk

Islamic Financial

Adam & Thomas (2004), Chps.3, 4 & 5.

AAOIFI Shari’ah Standard No.17;

Clifford Chance (2009), DIFC Sukuk Guidebook. SC (2009), ICM Series: Sukuk, Chps. 7-13.

9 Competency Test II

10 Islamic Unit Trust in Indonesia

11 Takaful and Islamic Insurance (Takaful)

Islamic Financial

Sofiniyah Ghafor (peny), Sistem

Operasional Asuransi Syari’ah

12 Rahn/Pegadaian Syariah

Islamic Financial

13 Competency Test III

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14 Lembaga Zakat( InfaqdanSodaqoh)

15 Wakaf

Islamic Financial

16 BMT and Islamic Microfinance

Islamic Financial

17 Badan Pengelola Keuangan Haji in Indonesia

Lembaga Keuangan

Islam, Abdul Qoyum

18 Competency Test IV

CASE STUDIES

Guidelines for Case Studies Assignment Deadline: Tentative

Purpose

1. To expose students to the actual practice of IBF 2. To inculcate critical, analytical & objective thinking 3. To be exposed to the topic & issues in more detail

Guidelines

1. Choose selected topics 2. Power Point Format 3. Based on real practice

4. Case Study analysis must be presented every week according to the group timetable CONTENT

1. Introduction

2. Background Of The Product 3. Product Objectives

4. Nominate Contracts/Underlying Shariah Principles 5. Product Mechanism

– Point Form Descriptions – Graphical Illustration

6. Comparison Between Conventional And Islamic

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7. Shariah Issues 8. Conclusion

Guidelines for Group Assignment (PROJECT PAPER) Deadline: Last Class Meeting

Purpose

1. To promote research culture & enhance research skills 2. To inculcate critical, analytical & objective thinking 3. To stimulate interaction among group members 4. To be exposed to the topic & issues in more detail Guidelines