Alternative structures for financing by Islamic Banks

Abstract EN

This work seeks to present alternatives to the existing murabahah-, salam-, istisnā-, ijarah-, musharakah- and diminishing musharakah-based financing instruments for financing by Islamic banks in the various sectors of the economy.

The proposals made here have the distinguishing features that the financing structures are free from wad (promise), and involve less complicated contractual arrangements.

The study also spells out a strategy for designing of Shari’ah-based financing instruments for retail banking with implications for building Shari’ah-based—not merely Shari’ah-compliant—financial structures.

It also dwells upon institutional arrangements for getting the best out of the Shar’ah-based banking.