the islamic finance architecture tariqullah khan
Post on 29-Dec-2015
219 Views
Preview:
TRANSCRIPT
The Islamic finance
ArchitectureArchitecture
Tariqullah Khan
The architecture of the financial system comprises of a number of vital and permanent principles and components
---- just like the foundations, pillars, ceiling etc., are critical elements of a building’s architecture
Financial infrastructure comprises of the resources, facilities and utilities that make the use of architecture beneficial for building an inclusive, dynamic and resilient financial system
----- just like the water, electrical, lightening, heating, communication, furniture etc., in a building that make the utilization of the building’s full capacity possible
Financial architecture has to be stable and could NOT be subjected to frequent changes ------ just like the foundations, pillars and ceiling of a building that cannot be changed
Financial infrastructure is work in progress and must be subjected to
continues improvement----- just like the water, electrical, lightening, heating, communication, furniture etc., in a
building that need maintenance and improvement
The objective of the Islamic financial architecture is to ensure that the
financial system operates inclusively, efficiently and soundly in a
sustainable and resilient manner and according to the aspirations of the
individuals, society and all stakeholders in compliance with
international best practice principles, guidelines and standards
the architecture - foundations, pillars and roof of Islamic finance
Individual motivations
not-for-profit & charitable motivations
for-profit and commercial motivations
❶ Prohibited & condemned: Interest-Riba-based transactions
Permitted & safeguarded: legitimate trading; charitable lending & debt rescheduling
the architecture - foundations, pillars and roof of Islamic finance
❷
Markets and property rights
Ownership of an asset has intertwined risks and benefits
The risks and benefits of an asset
shall not be separated and
traded separately
What is not owned should
not be sold
In contracts there should not be any room for
ambiguities
the architecture - foundations, pillars and roof of Islamic finance
❸Social ideals
Objectives of the legal system
Preservation of wealth
Preservation of intellect
Preservation of faith
Rights of future generations
Human rights & dignity
the architecture - foundations, pillars and roof of Islamic finance
❹Moral standards
Financial rate of return is subject to moral standards
Shariah screening of
products
Documentation and disclosure
standards
Principles based internal Shariah
supervision
the architecture - foundations, pillars and roof of Islamic finance
❺
Best practice standards
Internationally credible & comparable
Products & services
Internal control & risk
management
Governance & stakeholders'’
rights & responsibilities
Ownership risk and capital adequacy
Transparency & disclosures
the architecture - foundations, pillars and roof of Islamic finance
❻
Innovation & renovation
Guided freedom for innovation
All is permitted that is not expressly
prohibited
top related