An Introduction to Islamic Finance

by Muhammad Taqi Usmani

Although the principles of Shari'ah require banks and financial institutions to be structured on an interest-free basis, this does not mean that such institutions are charitable concerns. As long as a person advancing money expects to share in the profits earned (or losses incurred) by the other party, a stipulated proportion of profit is legitimate. The philosophy is enshrined in the traditional Islamic concepts of musharakah and mudarabah, along with their specialized modern variants murabahah, ijarah, salam, and istisna'. This invaluable guide to Islamic finance clearly delineates the all-important distinctions between Islamic practices and conventional procedures based on interest. Justice Usmani of Pakistan, who chairs several Shari'ah supervisory boards for Islamic banks, clearly explains the various modes of financing used by Islamic banks and non-banking financial institutions, emphasizing the necessary requirements for their acceptability from the Shari'ah standpoint and the correct method for their application. He deals masterfully with practical problems as they arise in the course of his presentation, and offers possible solutions in each instance.

Genres: Economics, Islam, Finance, Religion, Academic

246 pages, Paperback

First published December 19, 2001

About the author

Mufti Muhammad Taqi Usmani is one of the leading Islamic scholars living today. He is an expert in the fields of Islamic Jurisprudence, Economics, Hadith and Tasawwuf. Born in Deoband in 1362H(1943 CE), he graduated par excellence form Dars e Nizami at Darul Uloom, Karachi, Pakistan. Then he specialized in Islamic Jurisprudence under the guidance of his eminent father, Mufti Muhammad Shafi, the late Grand Mufti of Pakistan. Since then, he has been teaching hadith and Fiqh at the Darul-Uloom, Karachi. He authored many books in Urdu, Arabic and English language.

Reviews

[Fahad Naeem · Rating 5 out of 5]

Main Theme
An Introduction to Islamic Finance discusses economics in the light of Shariah (Principles of Islam). It gives a broad view of few terminologies used in economics like Mudarabah, Musharabah, Ijarah, Salam, and Istisna.

Good Points in Book
1. A layman can read and understand this book (requiring unprejudiced approach).
2. Implementing knowledge of economics, one can deduce the fact that Islamic finance is not merely a myth but an existing and real phenomenon.
3. It teaches us the main requirement of interest-free-economics is - Profit earned on the exchange of money is interest.
4. It teaches us that everything in Islamic finance is making a commodity.
5. Islamic finance focuses on making everyone rich and/or reduces the chances of making everyone poor.
6. Islamic finance also focuses on circulating money and it does not make few people richer who already have money.

Bad Points
None. I did not find any flaw in this book.

Conclusion
By reading and discussing this book and/or Islamic finance, one not only serves his/her society towards making it a better one but also can try to save his/her family from interest as well. So, I recommend everyone to read and own this book in hard copy as well.

[BJ Richardson]

This book should be titled, "How to charge interest without charging interest."

[Siti Ngalim · Rating 3 out of 5]

Basic theoretical understanding of Islamic Finance. For those who just started, you might want to start with this. Excellent book.

[ATTRIUS · Rating 5 out of 5]

A comprehensive introduction to Islamic finance. It covers the main pillars of the Islamic financial world cohesively while still maintaining readability for beginners.

Great intro book for anybody looking to gain a foundational understanding of this ecosystem.

[Mohammed Abdallah · Rating 5 out of 5]

it is a very good book discussing the principles of Islamic finance. The author provided succinct yet comprehensive text about different modes of finance with their respective conditions according to Islamic Shariah. In my opinion it is a good choice to start with this book. This book encouraged me to read more about Shariah in general. May Allah reward the author for his efforts.

[Hassan Mahfooz · Rating 4 out of 5]

Brilliant introduction to the topic, highly recommended.

[Osama Iqbal Ahmed · Rating 4 out of 5]

Although a little convoluted to comprehend along with the Arabic terminology, an excellent intro to Islamic Finance.

[Julkifli Bensali · Rating 5 out of 5]

A good book for the basic understanding of Islamic finance from a Shariah scholar's perspective.

A must have for those interested in the basic of Shariah principles.

[Tariq]

tariq

[Mumin · Rating 4 out of 5]

great book....