Course Contents

1. Introduction of Islamic Finance: Distinguishing features of Islamic Economic System: Shari’ah and its Objectives, Why study Islamic finance, Islamic welfare approach, 2. Main Prohibitions and Business Ethics: Basic prohibitions: prohibitions of Riba; Gharar and Maisir, Business ethics and norms 3. Philosophy and Features of Islamic Finance: Debt vs equity based instruments, Time value of money in Islamic finance, trading in currencies etc. 4. Islamic Law of Contracts and Business Transactions: Usufruct and ownership, Elements of contract, Commutative and non-commutative contracts etc. 5. Trading in Islamic Commercial Law: Bai-exchange of values, Legality of trading, and Requirements for a valid sale etc. 6. Murabaha: conditions of valid bai, Murabaha, Murabaha to purchase orderer (MPO), Issues in Murabaha 7. Participatory Modes: Musharakah, Diminishing Musharakah, Mudarabah etc. 8. Mudarabah: Mudarabah as a mode of financing, Rules for profit & loss. 9. Ijarah (leasing): Essentials of Ijarah contract, Modern use of ijarah, Islamic banks’ Ijarah Muntahia-bi-Tamleek 10. Salam as a mode of financing: Benefits of salam/salaf, Salam as a financing technique by banks, post-execution scenarios 11. Istisna’a (order to manufacture): Main features, Parallel contract, agency contract, post-execution scenario etc. 12. Takaful: An alternative to Conventional insurance; Operational mechanism of Takaful, Takaful potential and future challenges etc. Difference between Islamic (sukuk) and conventional bonds FINAL TERM PROJECT: A project related to real life practice of Organization life is given to students. A group of 4 to 5 students work together and submit final report thereof.

Course Synopsis

The study of Islamic finance holds pivotal importance ranging from individuals to small businesses to corporate empires to researchers to policy makers and governments around the Muslim world. The course has been designed so as to come up to fulfill intellectual as well as practical and professional needs and aspirations of the students. This course would not only provide foundation to the students to fulfill their aspirations of carrying on higher education and research in the fields of Islamic economics, banking and Takaful but would also open avenues for promising careers as professionals in these fields. This course attempts to achieve the following objectives: 1. To comprehend the main prohibitions in Islamic economic system. 2. To understand the basic Islamic financial instruments 3. To develop understanding related to advanced Islamic financial instruments

Course Learning Outcomes

At the end of this course, students are expected to gain the following objectives: 1. To understand the rationale behind the prohibition of interest, uncertainty and gambling. 2. To learn the basic concepts related to various Islamic financial instruments such as Musharikah, Mudarabah, Ijara etc. 3. To learn the advanced concepts related to various Islamic financial instruments such as Takaful, Sukuk etc.