Islamic Banking and Finance: Definitive Texts and Cases

Article excerpt

Islamic Banking and Finance: Definitive Texts and Cases Omar Masood 201 1, Palgrave MacMillan, USA $125 (hard cover), 304 pages

This book explores financial, banking and mortgage issues from an Islamic perspective since "There is so much attention to the Islamic mortgage that many see it as just what the Western world needs right now" (Masood, 201 1, p. 209). Masood explains that much of the current credit crisis can be attributed to the excessive, risky and speculative lending practices and that these challenges might have been prevented if Islamic financial principles were in place and followed. Regarding such modern challenges, this book is clear, concise, easy to read, simple to understand, and organized to be useful for practitioners who want to know more about Islamic banking and financial issues, as well as for academicians who prefer factual and longitudinal data to make decisions. Furthermore, this book is written by someone who is both an academician and a practitioner of these concepts. The author, Dr. Omar Masood is currently the Director of the Center of Islamic Banking and Finance at the Royal Docks Business School, at the University of East London, United Kingdom. The author is also a leading advisor in the area of Islamic banking and finance worldwide to financial as well as academic institutions. In January 2012, 1 had the pleasure of meeting Dr. Masood while he was supervising graduate students' research studies in the area of banking, finance, financial management, risk management, fund management, banking regulations, and Islamic banking topics at Superior University in Lahore where he serves as a visiting professor. He has served as a visiting professor in universities across the globe and has been a consultant to many organizations, including to the Turkish and Saudi Arabian governments. Besides being an academic scholar, he has recently authored and coauthored several other books on the topics of banking and Islamic finance including Islamic Banking and Islamic Finance as well as the Truth about the Global Financial Crisis.

In his latest 201 1 book, Islamic Banking and Finance: Definitive Texis and Cases, Masood explains how and why Islamic banking has received so much attention as well as rapid growth during the last few decades. The book discusses the viability of interest-free banking and the assessment of its performance over the last few decades and during the time of global financial crisis. Besides providing a good coverage of the basic concepts in Islamic banking and finance, the author compares them with the conventional interest-based finance which is currently the dominant framework. While the author demonstrates that Islamic banking has grown rapidly and is receiving well-deserved attention, it faces many challenges and hurdles since it is still in an infancy stage and not necessarily a threat to the mainstream banking at this time. Overall, this book addresses different Islamic banking practices and perspectives from across the globe while using examples of banks in the United Kingdom, United Arab Emirates, Iran, Pakistan, Sudan, and others to provide an objective assessment of their successes and failures over the past twenty years. For example, the UK now has over five shariah-compliant banks and at least seventeen financial institutions that offer home financing mortgages according to Islamic principles. There are many principles and guidelines for Islamic banking and some of them are as follows:

1 . The foundation of Islamic banking is anchored in justice and equity for all parties involved in the transaction. Islam provides a balance between the material and spiritual needs of human beings. Therefore, the self-interests of individuals for private gain are regulated to balance benefits toward the collective needs of the community or society at large. Islamic banking removes the debt-based financing from the economy as this can lead to the cycle of rich getting richer and the poor remaining poor with little to no opportunities to get better. …


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