Abstract
Transition from deposit banking model to crowdfunding model The Islamic finance industry has a tendency of converging toward a conventional system with controversial practices in order to keep up with all financial products offered by the conventional system. This chapter reflects on these practices: accruing of late payment interest charges as profit deprivation, trade finance products, and treasury practices such as some Sukuk, commodity Murabaha for liquidity management, and Islamic swaps or hedging contracts of Islamic forward. The alternative courses are presented to overcome controversies pertaining to these practices from a Shariah aspect. Being peculiar to Islamic finance, risk management practices and regulatory and supervisory enablers are arguable missing or set for wrong direction, but these practices are needed to put the industry on track in the transition from deposit banking to crowdfunding.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Al Maqasid Al Shariah: human development and well-being to be realized by ensuring the enrichment of Nafs (human self), Mal (wealth), Nasl (posterity), Aql (intellect) and Din (faith).
- 2.
Gundogdu (2019).
- 3.
Detail for the resolution is available at: http://www.bnm.gov.my/microsites/financial/pdf/resolutions/11_part05.pdf. Accessed April 16, 2014.
- 4.
Gundogdu (2016b).
- 5.
Gundogdu (2016a).
- 6.
Gundogdu (2016b):
- 7.
Gundogdu (2016c).
- 8.
Gundogdu (2018).
References
Bacha, O.I. 2020. Dana Gas Sukuk: The need for improved shariah governance. https://www.researchgate.net/publication/339165026_Dana_Gas_Sukuk_The_Need_for_improved_Shariah_Governance.
Beck, T., A. Demirgüç-Kunt, and O. Merrouche. 2010. Islamic vs. conventional banking: business model, efficiency and stability. World Bank Policy Research Working Paper No. 5446. Washington, DC.
Gundogdu, A.S. 2016a. Risk management in Islamic trade finance. Bogazici Journal 30(2): 64–82. https://doi.org/10.21773/boun.30.2.4.
Gundogdu, A.S. 2016b. Exploring novel Islamic finance methods in support of OIC exports. Journal of Islamic Accounting and Business Research 7(2).
Gundogdu, A.S. 2016c. Islamic electronic trading platform on organized exchange. Borsa Istanbul Review 16(4): 249–255.
Gundogdu, A.S. 2018. The rise of Islamic finance: Two-step Murabaha. Asia-Pacific Management Accounting Journal 13(1): 107–130.
Gundogdu, A.S. 2019. A modern perspective of Islamic economics and finance. Bingley, UK: Emeralds Publishing.
Usmani, M.T. 2008. Sukuk and their contemporary application. South Africa: Mujlisul Ulama of South Africa.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2021 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this chapter
Cite this chapter
Diallo, A.T., Gundogdu, A.S. (2021). Islamic Finance Strife: Risk Management, Regulation, and Supervision. In: Sustainable Development and Infrastructure. Palgrave Studies in Islamic Banking, Finance, and Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-67094-8_6
Download citation
DOI: https://doi.org/10.1007/978-3-030-67094-8_6
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-030-67093-1
Online ISBN: 978-3-030-67094-8
eBook Packages: Economics and FinanceEconomics and Finance (R0)