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Stock Donation as a Tax Saving Strategy
Investors who have been active in the securities market for past few years are now sitting on substantial capital gains on some stocks. Every trade of these securities results in capital gains...
Living Trust vs. Will
This post compares Living Trusts vs. Wills. The post was authored for us by Ms. Eman Patricia Katbi. She is a licensed attorney and a licensed Certified Public Accountant focusing on tax matters...
Zakah Calculator
This is a zakah calculation spreadsheet which allows you to calculate zakah based on various fiqh positions on investment portfolios. This was developed by Dr. Zillur Rahim. Please write to us or...
Stock Options: Halal or Haram
Ethical investors are curious about Sharia position on stock options trading. As we mentioned in an article a couple of years ago, “Some scholars have allowed these if they are related to actual...
Zakat on Investment Accounts
As Ramadan approaches, Muslims assess their savings to calculate zakat they have to pay the poor. General information on Fiqh issues of zakat is available across the web. This discussion is...
Risk Management
All securities investments carry the risk of loss. The risk and return are directly related. Higher risk usually results in higher return. The goal is to reduce the risk without having significant...
Portfolio Diversification
Once you have decided to follow ethical investing guidelines, the next step is to select the assets to invest in. It would have been easy to just choose the best performing fund and buy its...
A Case for Compounding
Since Muslims do not want to deal with interest, the discussion on compounding hardly ever comes up. Usually, compounding is always mentioned in the context of interest or usury. But, the fact is,...
Home Financing
There are four major players in the US for Sharia Compliant Financing. Riba free or interest free does not mean there is no cost to borrowing. These finance companies need to be compensated or...
Regulation of Takaful Business
Corporate Governance is a prerequisite for promotion of growth and competition in the financial services industry. It protects both customers and investors. Takaful provides an Islamic alternative...
Reinsurance for Takaful Business
Conventional insurance companies collect premiums from policyholders and assume from them the risks of insured losses. There is always a risk of insolvency for the insurance company in case of...
General Takaful Operations
General Takaful provides protection for non-life matters such as fire, home, automobile, liability, marine, crops, and various business matters. General Takaful contracts are usually one year...
Life Insurance and Family Takaful
Muslim jurists and Shari’ah scholars have objected to life insurance schemes as life and death is ordained by Allah and cannot be insured. Further, conventional life insurance policies usually...
Takaful Business Models
The evolution of Takaful is a relatively new phenomenon in Islamic Finance and comparatively less research has been done on this topic. All Takaful business models have their pros and cons. In...
Takaful Operations
The Takaful agreement is similar to other standard contracts requiring contracting parties, legal capacities, offer and acceptance, consideration, subject matter, insurable interest, and good...
Takaful – An Islamic Alternative to Insurance
There was no direct equivalent of insurance in classical Islamic traditions. Since Insurance is about risk mitigation, the scholars had to look for equivalent strategies in the early periods. The...
Conversion to Islamic Banking
The banks converting from conventional to Islamic banking can continue to have demand and time deposits with different maturities. The main difference is that no interest can be paid on these...
Formation of an Islamic Bank
Islamic banking provides financial services to both Muslims and non-Muslims. In that sense, it is similar to a conventional bank and requires meticulous studies of banking environment and business...
Financial Statements of Islamic Banks
The following are the accounting definitions in a general conceptual framework of an Islamic bank’s financial statements.
Acconting and Audit for Islamic Banks
Conventional accounting provides information related to financial position, operations, and cash flows about an entity to allow interested parties to make informed decisions about the entity. In...
Function of Shariah Board
Shari’ah Boards perform the all-important role of reviewing, approving, and overseeing the services and transaction of an Islamic bank. The boards consist of recognized scholars who have thorough...
Corporate Governance and Regulation
A functioning economy requires a stable and reliable banking and financial services sector. Banks cannot be relegated to a totally laissez-faire market where all transactions are free of...
Sukuk (Islamic Bond)
Sukuk are Islamic equivalent of fixed income bonds found in the western markets. Shari’ah scholars have varying opinions about legitimacy of Sukuk structure in Islam. This has made these products...
Cooperation between Conventional and Islamic Banks
Central banks are important building block of the financial economy of a country or a group of countries. They are responsible for managing the money supply, interest rates, inflations, reserve...
Fees Charged by Islamic Banks
fees charged by Islamic banks
Emergence of Modern Islamic Banks
The traditional banks serve the important role of financial intermediaries to pool the resources from many small investors to finance large capital projects. This role is important for functioning...
Principles of Islamic Economic System
Islamic economics is governed by Islamic beliefs. The sources of beliefs include, in order, Quran (revealed scripture), Hadith (traditions of the Prophet (pbuh)), Ijma (consensus of scholars), and...
Riba and the Rationale for its Prohibition
The Quranic term “ riba ” means usury or more commonly used term, interest, in modern economics. Riba is a gain in monetary or physical assets without providing a service or sharing the risk in an...
Prohibition of Gambling
The Arabic term Gharar is translated as uncertainty, risk, speculation or hazard. Islamic anticipates the inherent uncertainty and risk of business transactions. Gharar refers to speculative risk...
Welfare Economic Framework
Islamic economics is governed by the principles of Sahri’ah and Sharia’h is mainly concerned with human welfare. Islam is complete way of life and accounts for both material and spiritual well...
Islamic vs Conventional Economics
Islam is often called the natural religion. While it promotes individual freedoms to maximize human potential, it regulates economic activities under divine principles ensure justice in the...