Course Outline


ISLAMIC ECONOMICS AND FINANCE CERTIFICATE COURSE

The Africa Islamic Economic Foundation (AFRIEF) is pleased to announce its Islamic Economics and Finance Certificate Course, under its Islamic Finance Talent Development Program (IF-TDP). This professional development course is offered for free, and it is a specially designed distance learning program intended to develop the talents of fresh university graduates and other midlevel professionals who have the interest and passion to pursue a meaningful Islamic finance professional career.The Islamic Economics and Finance Certificate Course is a 12-week course that will require an estimated 10 hours per week of time to complete. Course begins on February 1, 2017 and ends April 31st, 2017. At the end of each module are (a) a short self-assessment that is intended to help participants review what they have learned and (b) a list of references for articles and websites with technical information designed to increase their understanding of the Module topic. Participants are required to complete worksheets for each module and are required to write final examinations at the end of the course. Certificates for those who successfully complete the course will be issued in May 2017.A unique aspect of the Course is that capable students will be arranged to attend a 7-day structured classroom training on technical skills on Islamic finance, as well as soft skills of communication, business acumen and leadership at the end of the Course to accumulate practical experience through extensive physical learning and working exposures. In addition, each participant will have the opportunity to get-to-know and work with at least one participant from another country. Participants are to be grouped and assigned with a skilled professional mentor who will serve as a course guide and advisor.

COURSE OBJECTIVES

Upon completion of the Course, participants would be able to:

  • Explain Islamic economics and the implementation of Islamic monetary policy;
  • Recognise the practical grounding of Islamic banking and finance;
  • Explain the funding operations of Islamic banks and finance: investment deposits and current account deposits; Long-term and short-term finance for industry and commerce; Modes of financing; micro-lending and micro-finance; Islamic money products, capital market products and Takaful products;
  • Define the regulation and supervision of Islamic financial institutions;
  • Identify the practical issues of regulation and supervision of dual financial systems;
  • Recognise the challenges facing the Islamic industry in developing a comprehensive set of products and services in meeting the needs of modern economy -new innovative products (sukuks), Islamic hedge funds and Islamic derivatives;
  • Relate to the challenges faced in regulating and supervising the Islamic Banking and Finance.

COURSE CONTENT:

The Course consists of the following modules and course units, designed to equip participants with the theory and practice of Islamic Economics and Finance.

MODULE 1: FUNDAMENTALS 

1.        INTRODUCTION

1.1.      Economic Scenario in the Neoclassical Framework

1.2       Conventional Debt: A Recipe for Exploitation

1.3       Growth perse May not Lead to Socio-economic Justice

1.4       Social Welfare Activities of the States

1.5       The Main Culprit

1.6       The Need of the Hour1.

1.7       Economics and Religion1.

1.8       Islamic Principles Can Make the Difference1.

1.9       Regulating Trade and Business1.

1.10     Islamic Finance Passing Significant Milestones1.

1.11     Could it Work to Achieve the Objectives?

2          DISTINGUISHING FEATURES OF THE ISLAMIC ECONOMIC SYSTEM

2.1       Introduction

2.2       Islamic Sharı´ah and its Objectives

2.2.1    Sources of Sharı’ah Tenets2.

2.2       Objectives (Maqasid) of Sharı´ah2.

2.3       Why Study Islamic Economics?

2.3.1    The Role of Islamic Economists

2.4       Islamic Economics: What should it be?

2.4.1   Islamic Economics Defined

2.5      Paraphernalia of Islamic Economics

2.5.1  Ownership of Resources and Property Rights

2.5.2  Islamic Welfare Approach

2.5.3  The Factors of Production

2.5.4  Restrained Individual Freedom

2.5.5   Liberalism versus State Intervention

2.6      Summary

3.    THE MAIN PROHIBITIONS AND BUSINESS ETHICS IN ISLAMIC ECONOMICS AND FINANCE

3.1       Introduction

3.2       The Basic Prohibitions

3.2.1    Prohibition of Riba

3.2.2    Prohibition of Gharar

3.2.3    Prohibition of Maisir/Qimar (Games of Chance)

3.3    Business Ethics and Norms

3.3.1 Justice and Fair Dealing

3.3.2 Fulfilling the Covenants and Paying Liabilities

3.3.3 Mutual Cooperation and Removal of Hardship

3.3.4 Free Marketing and Fair Pricing

3.3.5 Freedom from Dharar (Detriment)

3.4      Summary and Conclusion

4.        THE PHILOSOPHY AND FEATURES OF ISLAMIC FINANCE

4.1       Introduction

4.2       The Philosophy of Islamic Finance

4.2.1    Avoiding Interest

4.2.2    Avoiding Gharar

4.2.3    Avoiding Gambling and Games of Chance

4.2.4    Alternative Financing Principles

4.2.5    Valid Gains on Investment

4.2.6    Entitlement to Profit – With Risk and Responsibility

4.2.7    Islamic Banks Dealing in Goods not in Money

4.2.8    Transparency and Documentation

3.4      Summary and Conclusion

4.2.9 Additional Risks Faced by Islamic Banks

4.3    Debt versus Equity

4.4    Islamic Banking: Business versus Benevolence

4.5    Exchange Rules

4.6   Time Value of Money in Islamic Finance

4.7   Money, Monetary Policy and Islamic Finance

4.7.1 Status of Paper Money

4.7.2 Trading in Currencies

4.7.3 Creation of Money from the Islamic Perspective

4.7.4 Currency Rate Fluctuation and Settlement of Debts

4.8   Summary

MODULE 2: CONTRACTUAL BASES IN ISLAMIC FINANCE

5.   ISLAMIC LAW OF CONTRACTS AND BUSINESS TRANSACTIONS

5.1  Introduction

5.2  Mal (Wealth), Usufruct and Ownership

5.2.1   Defining Various Related Terms

5.3     General Framework of Contracts

5.4     Elements of a Contract

5.4.1  Offer and Acceptance: Form of the Contract

5.4.2  Elements of the Subject Matter

5.5     Broad Rules for the Validity of Mu‘amalat

5.5.1   Free Mutual Consent

5.5.2    Prohibition of Gharar

5.5.3   Avoiding Riba

5.5.4  Avoiding Qimar and Maisir (Games of Chance)

5.5.5  Prohibition of Two Mutually Contingent Contracts

5.5.6 Conformity of Contracts with the Maqasid of Sharı´ah

5.5.7 Profits with Liability

5.5.8 Permissibility as a General Rule

5.6     Wadi’ah (Promise) and Related Matters

5.6.1 Token Money (Hamish Jiddiyah) and ‘Arbun

5.7    Types of Contracts

5.7.1   Valid Contracts5.7.2 Voidable (Fasid) Contracts

5.7.3  Void (Batil) Contracts

5.8      Commutative and Non-commutative Contracts

5.8.1   Uqood-e-Mu‘awadha (Commutative Contracts)

5.8.2   Uqood Ghair Mu‘awadha (Tabarru‘) or Gratuitous Contracts

5.8.3   Legal Status of Commutative and Noncommutative Contracts

5.9      Conditional or Contingent Contracts

5.10 Summary

6.        TRADING IN ISLAMIC COMMERCIAL LAW

6.1       Introduction

6.2       Bai‘– Exchange of Values

6.3       Legality of Trading

6.3.1    Trade (Profit) versus Interest: Permissibility versus Prohibition

6.4       Types of Bai‘

6.5       Requirements of a Valid Sale Contract

6.5.1    The Object of the Sale Contract

6.5.2    Prices and the Profit Margin

6.5.3 Cash and Credit Prices

6.6 Riba Involvement in Sales

6.7 Gharar – A Cause of Prohibition of Sales

6.8 Conditional Sales and “Two Bargains in One Sale”

6.9 Bai‘al‘Arbun (Down payment Sale)

6.10 Bai‘al Dayn (Sale of Debt)

6.11 Al ‘Inah Sale and the Use of Ruses (Hiyal)

6.12 Options in Sales (Khiyar)

6.13. Summary

7        LOAN AND DEBT IN ISLAMIC COMMERCIAL LAW

7.1       Introduction

7.2       The Terms Defined

7.3       Illegality of Commercial Interest

7.4       Loaning and the Banking System

7.5       Guidance from the Holy Qur’an on Loans and Debts

7.6       The Substance of Loans

7.7       Repayment of the Principal Only

7.8       Time Value of Money in Loans and Debts

7.9       Instructions for the Debtor

7.10     Instructions for the Creditor

7.11 Husn al Qadha (Gracious Payment of Loan/Debt)

7.12 Remitting a Part of a Loan and Prepayment Rebate

7.13 Penalty on Default7.13.1 Insolvency of the Debtor

7.14 Hawalah (Assignment of Debt)

7.15 Security/Guarantee (Kafalah) in Loans

7.15.1 Risk and Reward in Pledge

7.15.2 Benefits from Pledge

7.16 Bai‘al Dayn (Sale of Debt/Debt Instruments)

7.17 Impact of Inflation on Loans/Debts

7.18 Summary

MODULE 3:     ISLAMIC FINANCE – PRODUCTS AND PROCEDURES

8. OVERVIEW OF FINANCIAL INSTITUTIONS AND PRODUCTS: CONVENTIONAL AND ISLAMIC

8.1       Introduction

8.2       What is Banking or a Bank?

8.3       The Strategic Position of Banks and Financial Institutions

8.4       Categories of Conventional Financial Business

8.4.1    Commercial Banking

8.4.2    Investment Banking

8.4.3    Other NBFIs

8.4.4    Conventional Financial Markets

8.5       The Need for Islamic Banks and NBFIs

8.5.1    The Structure of Islamic Banking

8.5.2 The Deposits Side of Islamic Banking

8.5.3 Instruments on the Assets Side

8.6 The Issue of Mode Preference

8.7 Islamic Investment Banking

8.8 Islamic Financial Markets and Instruments

8.8.1 Islamic Funds

8.8.2 Principles Relating to Stocks

8.8.3 Investment Sukuk as Islamic Market Instruments

8.8.4 Trading in Financial Instruments

8.8.5 Inter-bank Funds Market8.8.6 Islamic Forward Markets

8.8.7 Foreign Exchange Market in the Islamic Framework

8.8.8 Derivatives and Islamic Finance

8.9 Summary and Conclusion

8.5.2 The Deposits Side of Islamic Banking

8.5.3 Instruments on the Assets Side

8.6 The Issue of Mode Preference

8.7 Islamic Investment Banking

8.8 Islamic Financial Markets and Instruments

8.8.1 Islamic Funds

8.8.2 Principles Relating to Stocks

8.8.3 Investment Sukuk as Islamic Market Instruments

8.8.4 Trading in Financial Instruments

8.8.5 Inter-bank Funds Market8.8.6 Islamic Forward Markets

8.8.7 Foreign Exchange Market in the Islamic Framework

8.8.8 Derivatives and Islamic Finance

8.9 Summary and Conclusion

8.5.2 The Deposits Side of Islamic Banking

8.5.3 Instruments on the Assets Side

8.6 The Issue of Mode Preference

8.7 Islamic Investment Banking

8.8 Islamic Financial Markets and Instruments

8.8.1 Islamic Funds

8.8.2 Principles Relating to Stocks

8.8.3 Investment Sukuk as Islamic Market Instruments

8.8.4 Trading in Financial Instruments

8.8.5 Inter-bank Funds Market8.8.6 Islamic Forward Markets

8.8.7 Foreign Exchange Market in the Islamic Framework

8.8.8 Derivatives and Islamic Finance

8.9 Summary and Conclusion