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Question: During the recent economic crisis, an Islamic bank faced a number of defaults in financial commitments by its clients. As a result, the Islamic bank is required to allocate a part of the current income as provision for bad and ....

Question: An Islamic bank is preparing to launch home finance product for its customers.The product is based on Ijarah Muntahiya Bittamlik (financial lease), through which the bank will purchase the property from the market and lease it to the customer. The ....

Question: Shariah guidance has been sought by an Islamic bank in relation to pledge or mortgage against auto Murabahah liability. Also, if it is permissible, what shall be the treatment of insurance proceeds in case of total damage to the mortgaged vehicle ?.

Question: A group of conventional and Islamic participating banks entered into a syndication to provide financing for a large project through an Islamic facility to be provided through an Islamic bank acting as an investment agent.Although the majority of the participating ....

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Subjects: Banking services; Islamic jurisprudence; Leasing leading to proprietorship; ٌLeasing

Question: An Islamic bank has issued a Murabahah-based documentary letter of credit (LC). The LC was based on a proforma invoice issued by the supplier containing description, quantity and price of the goods besides shipment date. The LC documents have been ....

Question: An Islamic bank is planning to launch a retail product to fulfill the personal finance needs of its customers. The product is based on the Salam contract.Shariah guidance is required as to whether it is permissible for the Islamic bank ....

Question: Shariah guidance is sought as to whether it is permissible for an Islamic bank to accept funds from a conventional bank in order to invest the same along with its common investment pool..

Question: A customer previously obtained an Ijarah facility (financial lease) from an Islamic bank in order to procure a building. The tenor of the facility was 20 years.During the term of the facility, the customer requested the bank to allow for ....

Question: A customer previously obtained an Ijarah facility (financial lease) from an Islamic bank in order to procure a building. The tenor of the facility was 20 years.During the term of the facility, the customer requested the bank to allow for ....

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Subjects: Financing; Forward buying; Islamic jurisprudence; Sales

Question: An Islamic bank intends to offer financing at preferential profit rates to its staff to help them purchase vehicles. However, the preferential rate is intended to be applicable only during the employment tenor. Can the Islamic bank achieve this objective in a Shariah compliant manner ?.

Question: A customer of an Islamic bank wants to construct a school building for which he has requested the Islamic bank for finance. The land whereupon the building will be constructed is not owned by the customer but taken by him ....

Question: An Islamic bank had issued a letter of credit, for a customer applied for the same. Since the customer could not manage the availability of the fund in its account when the documents under LC were negotiated and payment became ....

Question: In view of repeated requests from various customers, an Islamic bank has sought Shariah guidance in order to assess whether it can introduce an overdraft facility to its valued customers for certain required periods against an agreed fee.Under such a ....

Question: An Islamic bank has approved a Mudarabah facility for a customer based on which the Islamic bank will provide funds (i.e. the Mudarabah Capital) to the customer. The Mudarabah capital will be utilized by the customer to undertake its business ....

Question: A company has sought financing from an Islamic bank. As stated by the company, the utilization is required for two purposes : To meet with working capital requirements, such as procurement of new IT system and other infrastructure-related expenditure besides ....

Question: Conventional banks are able to meet the requirement of customers to convert their non-funded facility into a funded facility by entering into the relevant arrangements at the relevant point of time. This may be demonstrated by an example as follows ....

Question: An Islamic bank’s customer has recently been awarded facilities in relation to a large developmental project the customer has won in a tender. The facilities include letters of credit (LCs) and letters of guarantee (LGs).In view of the large size ....

Question: Company A has approached an Islamic bank seeking finance to import steel and other building materials from various suppliers. It has been noticed that the company A is holding 25 % of the shares of company B. Company A is ....

Question: The government of a country has announced a social welfare scheme under which an interest-free loan is provided to nationals who wish to avail themselves of the scheme, in order to construct villas for their own residential purposes only.An Islamic ....

Question: An Islamic bank wishes to provide financing to one of its customers, in order to purchase a ready property from a developer. No sale and purchase agreement has been signed between the customer and the developer and only the booking ....

Question: A company involved in the trade of gold and diamonds has approached an Islamic bank seeking a financing facility.The financing facility may include the following :Financing the procurement of gold, silver, diamonds and other precious stones from the suppliers for ....

Question: Ali has approached an Islamic bank with a request to assist him to buy out the shares of his minority partner Akram in a running foodstuff business. He cannot meet with the demand of Akram for full down payment for ....

Question: A leasing company provides financing to small and medium-sized businesses wishing to acquire commercial vehicles, machinery and equipment. The company has approached an Islamic bank seeking a funding line to be able to finance its customers as and when required ....

Question: A customer of an Islamic bank had obtained financing through a number of Murabahahs. Each Murabahah contract was executed at different time, and had its own schedule of payment which was different from the others.With the intention of managing some ....

Question: Is it permissible for an Islamic bank to issue preferred shares or to invest in a company having preferred shares ?.

Question: An Islamic bank issued a letter of credit (LC) with a usance period of 90 days, with financing through a Murabahah facility for another 90 days. Upon receiving the shipping documents, the bank signed the Murabahah agreement with the customer ....

Question: A customer was granted a Salam finance facility by an Islamic bank. In order to guarantee the obligations under the Salam facility, the customer provided post-dated cheques as security in favor of the Islamic bank.Shariah guidance is sought as to ....

Question: A trader was appointed by an Islamic bank as an agent to purchase certain goods on behalf of the bank from the local market, with a promise to subsequently buy the same from the bank on deferred Murabahah basis. The ....

Question: A customer has approached an Islamic bank seeking a financing facility in order to make a balance payment to the supplier for the goods it has already purchased, by providing 20 % of the amount as a down-payment.The customer is ....

Question: A Shariah compliant fund manager (the investor) intends to purchase listed shares of a company for investment purposes. The investor requires guidance from its Shariah Board with respect to the applicable criteria to determine the Shariah compliant companies and tradability of shares of such companies..

Question: A commercial tower contains a large number of shops occupied by different tenants. A customer has approached an Islamic bank requesting finance to procure the same, with the intention of continuing with the existing tenants..

Donor award: Islamic Corporation for the Development of the Private Sector (Jiddah, Saudi Arabia)
Source : Annual Report. Vol. (2013), pp.1-72, 72 p.

Subjects: Corporations; Islamic Corporation for the Development of the Private Sector; Kuala Lumpur; Social responsibility

Donor award: Liquidity Management Centre (Manama, Bahrain)
Source : Annual Report. Vol. (2013), pp.1-100, 100 p.

Subjects: Corporate governance; Corporations; Social responsibility

Question: A customer was extended a letter of credit (LC) and Murabahah facility for the underlying goods by an Islamic bank. The relevant goods arrived at the port prior to the receipt of shipping documents by the bank.In order to avoid ....

Question: An Islamic bank is facing an interesting situation. A customer previously requested financing for the purchase of a vehicle from the bank. The bank had purchased the vehicle from a dealer and sold it to the customer by way of ....

Question: Company A approached an Islamic bank seeking a regular funding line to purchase from time to time certain quantities of raw material from company B, which is the sole distributor in the country for the import and supply of the ....

Question: A customer who had deposited a certain amount for one year in a term deposit account maintained with an Islamic bank, has requested for an early withdrawal of the total amount deposited along with the realized profit.The bank approached the ....

Question: A benefit book has been proposed to be offered by an Islamic bank to all of its accountholders. The book contains a bulk of coupons for various retail outlets (including eateries) offering ‘buy one get one free’ type discounts.The scheme ....

Question: An Islamic bank has sought guidance from its Shariah board on the modus operandi to finance its client’s export orders. It is important to note that for commercial reasons the exports are carried out in the customer’s name, in order ....

Question: A customer engaged in the trading of petroleum products has approached an Islamic bank seeking finance to procure oil. The Islamic bank is considering financing the customer through a Murabahah structure.It is important to note that the modality of procuring ....

Question: An Islamic bank has approved for its customer the financing facility for a commercial property on an Islamic financial lease (Ijarah Muntahiya Bittamlik) basis for a period of seven years. Since the customer expects an increase in the property value ....

Question: Under what conditions can a customer of an Islamic bank be authorized to participate in the periodical auctions for heavy vehicles and equipment for which the customer will also require financing ?.

Question: The trade finance department of an Islamic bank is facing an unusual situation in an already executed Murabahah transaction with one of its customers.The background of the transaction is that the customer approached the Islamic bank requesting for a Murabahah ....

Question: An account holder has approached an Islamic bank seeking finance to settle the debt he has incurred as a result of purchasing a plot of land. He had entered into a purchase agreement with the erstwhile owner of the property ....

Question: A customer has approached an Islamic bank, seeking to transfer his interest-based loan from a conventional bank to an Islamic bank with the desire to shun Riba (interest). The customer had borrowed the amount from conventional bank to acquire a ....

Question: A customer has approached an Islamic bank, seeking finance in order to fulfill the working capital requirements of his business entity. The bank has requested for Shariah guidance on how to provide the customer with working capital finance..

Question: An Islamic bank has issued a letter of credit which had a usance period of 90 days. The bank also agreed with the customer to finance the import under the letter of credit through Murabahah for a further 90 days ....

Question: The father of a student has approached an Islamic bank seeking finance for his son’s education fees in order to complete a Master’s degree in his chosen subject.The student has been selected by the university based on good grades and ....