Could Islamic finance save capitalism? - From ISlamic Banker Web

http://www.islamicbanker.com/articles/could-islamic-finance-save-capitalism?

In 2010, the World Economic Forum invited a theologian to speak on the subject of an alternative economic system, putting stewardship of our planet at its core.  The unassuming but renowned scholar of Islamic jurisprudence, Mufti Taqi Usmani, would have found the snowy streets of Davos somewhat removed from the dusty chaos of his hometown Karachi, but the paper he presented had global importance: reforming the world’s post-crisis financial landscape through the lens of faith.  And although the media focused largely on the predictably defensive stance being taken by bankers through that turbulent time, perhaps some came away from Davos with the seed of an idea that social awareness ought to be the underpinning of finance.  More recently, comedian Russell Brand has been galvanising public opinion in his inimitable style to protest severe economic imbalances in the UK.  Time will tell which approach will prove more successful in challenging the status quo.

Tahawwuth, just another window

Islamic banks in Indonesia recently discussed on the possibility of Tahawwuth (hedging) as an instrument of mitigating market risk in Islamic bank. It came up (again) following International Seminar on Islamic Finance in Bank Indonesia, 6th May 2014, coorganized by International Islamic Financial Market and Bank Indonesia.
Some people consider the instrument is not allowed based on DSN fatwa on Foreign exchange transaction, which allows spot transaction based on naqd principle while provides forward contract (as a part of hedging) only for hajiyat principle. Therefore, according to this assumption, forward contract is not allowed. It is allowed only within two conditions: it is in the form of agreement (not contract) and it has underlying transaction.

The Biggest Problem: Ignorance

Many people thought that banking practice is a genuine invention of Italian people with their "banco" style. New findings proved that Knight Templar already praticed banking activities prior to what Italian did for the first time. However, if one steps back more to older history, they will find that even Baghdad and Basra people during Abbasid dinasty (long time before Crussade when Templar was formed and established) already involved in paper documents as collecting instrument.

Islamic Bank: Our daily practice and the essence

Many people know Islamic mode of transactions from modern Islamic banking practices. They oftenly define every transaction based on their experience in dealing with Islamic banking. While there are many modifications are made to fit in financial transaction, such definition definitely contain additional elements that are not available in original term.

Murabaha Commodity, What is it for?

Since 2004 there has been a big issue in Indonesian Islamic banking and finance community with little attention given by the industry. The issue become big not because there is no answer to the problem raised, but because the issue is forwarded by a big-foreign bank which run Islamic window. The bank insists that since the issue is settled by Sharia Board of the bank in their headquarters, then the country in which the bank operate Islamic window also should allow the product to be launched and utilized by the community.

Indonesia-Malaysia; Two Different Questions

Talking about Islamic Banking in South East Asia, there is always comparison between Malaysia and Indonesia. Malaysia is considered to have their Islamic banking more developed and fast growing compared to Indonesia. Does it mean Malaysia is better than Indonesia?

My friend, Dr. Ugi Soeharto has different answer. In Malaysia, the question faced by Islamic bank is Can Islamic bank do what conventional banks do? while in Indonesia, the question is more specific and somewhat underestimating: What is different Islamic bank from their conventional counterpart?

It means that Malaysian Islamic banks need only to answer yes to the question and start arranging their products similar to what is in conventional banks. The only different between their products are in the label "i" (islamic).

How does National Sharia Board issue a fatwa on product?

It is quite strange that this kind of question is not categorized as FAQ (Frequently Asked Question). In fact the process of issuing a fatwa is a process that become a pillar in governance  system of an organization. For this reason, IFSB (Islamic Financial Service Board) put the question into a clause in its Sharia Governance Standard published recently.