Islamic finance

Islamic finance ( English Islamic finance ) in finance are all transactions that are in accordance with the religious rules of Islam , the legal sources of Fiqh and Sunna and Sharia .

General

International finance consists of credit institutions , insurance companies , investment services companies , financial services institutions and all other types of companies organized under private law, for which the operational purpose entirely or primarily includes financial services . The attribute “Islamic” indicates the religion-related peculiarities of this service sector .

The international credit transactions , international payments and interbank trading are of free movement of capital , freedom to provide services and freedom of contract coined. All financial contracts that are subject to the Islamic rules of the general prohibition of interest ( Ribā in Arabic   ), the prohibition of speculation ( Gharar in Arabic ) and the prohibition of gambling ( Maysir in Arabic , Quimar ) contradict these principles . The general prohibition of interest prohibits Islamic credit institutions from engaging in interest-bearing banking transactions which, however, form the basis for the normal market lending or deposit business of non-Islamic banks. In order to still be able to carry out such interest-bearing transactions with Islamic business partners, the market participants have developed new financing instruments on the basis of loan agreements in kind , which are Shari'a-compliant on the basis of legal opinions ( Arabic fatwa ). Acting in conformity with Shar'ia means structuring financing , insurance , consumption and investments strictly according to the Islamic rules of faith. For the Islamic financial institutions, the Koran and the Sunna set the religious and legal framework and also form the social and ethical foundation for the entire Islamic financial system.       

history

In the Islamic cultural area, from the 6th century AD - i.e. still in pre-Islamic times - the Arabs developed the silent society ( Arabic   Mudaraba ), in which a foreign investor provides the capital and the entrepreneur does the work . In Christian Europe, the Kommenda ( Latin commendare , to entrust ) was regarded as its medieval counterpart. The Italian Kommenda first appeared in Venice in May 1072. Although the investor was not allowed to be a partner at the same time , his outside capital was still considered to be an equity participation in the profit or loss . In the Ottoman Empire , which began in 1299, there was an interest-oriented banking system despite the Islamic interest ban in order to be able to finance the high government spending . During the Middle Ages, at the same time, the prohibition of interest largely prevailed in Christianity (only not for Jews), but Jews among themselves had to observe the prohibition of interest ( Hebrew neshek , "Abbiss"). While the Christian prohibition of interest gradually relaxed and was formally repealed within the Catholic Church by Pope Pius VIII in a letter of August 18, 1830 to the Bishop of Rennes , a counter-movement occurred in Islam.

The first Pakistani constitution of March 1956 laid the foundations for an Islamic financial system, but its implementation lasted until 1983. A conference of Islamic foreign ministers in Cairo in February 1972 prepared alternative proposals for dealing with financial matters. Pakistan began its first attempts to Islamize its banking world in 1977. In 1979, Iran enshrined the interest ban in its constitution, which was not legally implemented until 1983. He nationalized his banking system in June 1979 , and since March 1985 all banking transactions here have been based on Islamic law. In September 1983, Sudan enacted the Shari'a laws so that all banks were covered by the interest ban.

As the first bank that took into account the Islamic ban on interest on all banking transactions, which was founded in 1971 and is considered state property located Nasser Social Bank in Cairo, it was followed by the Islamic Development Bank (Islamic Development Bank, October 1975), the Dubai Islamic Bank (1975), the Faisal Islamic Bank of Egypt (1977), the Kuwait Finance House (1977) or the Bahrain Islamic Bank (1979). With the Islamic Banking System International Holdings , the first European Islamic bank was established in Luxembourg in 1978 . In Switzerland , the Dar al-Mal al-Islami opened its doors in 1981. Since then, the addition "Islamic Bank" has indicated that a bank conducts Shari'a-compliant banking and is monitored by a Shari'a board. In Kuwait , Article 547 of the Civil Code, which came into force in 1980, states that loans must be interest-free. In 1992, the Pakistani Federal Sharia Court saw all forms of interest-taking as a violation of Sharia law. In August 2004, the Islamic Bank Of Britain was the first retail bank in Great Britain . In Germany , since March 2015, KT Bank AG has been the first and so far only bank under German law that offers financial products and services in accordance with Islamic rules.

Types of financial contracts

In the financing of investment , consumer goods , the import of raw materials or construction financing from non-Islamic states who knows foreign trade financing following Islamic financing instruments :

• Debt financing
  • Murabaha ( "resale at a premium"; from Arabic   RIBH , "profit") is the most common and oldest form of Islamic debt financing, in which a financial institution to finance fall merchandise ( commodities acquires) and then with a profit margin ( english add-on , or mark-up ) resold to the Islamic buyer who pays for it at a later date. The add-on corresponds exactly to the loan interest and the repayment . About 75% of all Sharia-compliant contracts are based on this construction.
    • Tawarruq ( German  "to make liquid" ) consists of two sales contracts and is controversial among Islamic legal scholars. In the first sales contract, the goods are handed over immediately against the payment term ; in the second sales contract, the buyer hands over the goods from the first sales contract step by step against payment , which he can forward to the seller from the first sales contract at the end of the payment term ("reverse Murabaha") ). It can be used for rescheduling .
    • Istisna ( German  "let somebody build" ) is an object financing or project financing in which the object to be financed represents a building that has yet to be built . It is similar to the work contract , but the building is only paid for after it has been completed at a previously agreed fixed price .
  • Qard al-Hassan ( German  "the good, because interest-free loans" ; from Arabic   Qard , "credit") is in the deposit business an interest-free banking, a earmarking under-lying bank deposits or lending business an interest-free micro-credit .
  • Salam ( German  "delivery contract" ): a type of forward commodity transaction in which the seller sells commodities at a later date, but the buyer has to pay the purchase price when the transaction is concluded . Since the seller does not have to own the goods at the time of the transaction, the prerequisites for a short sale are present.
  • Ijarah ( German for  “rent” ) is a leasing model in which the lessor, as the owner, allows the lessee to use the leased property for leasing fees. A purchase option in favor of the lessee is not permitted.
• Self-financing
  • Sukuk  /صكوك / ṣukūk (from Arabic   sakk , "certificate"): the Islamic bond grants the bondholder a share of the ownership of the bond debtor's assets and is therefore to be classified as an asset-backed security that may not be Shari'a-compliant. There is no interest on the loan, but a share of the income from the financed assets (such as rent). Rental income can be linked to reference interest rates such as LIBOR .
  • Mudaraba ( German for  “speculation” ) is a silent partnership in which the investor provides the entrepreneur with a capital stake with a pro rata share in profits and losses .
  • Musharaka (from Arabic   shirkat , “together”) is equity finance with full profit and loss sharing.
• Customer credit
  • Arbun  /عربون / 'Arbūn a non-refundable is deposit ( english deposit ) a purchaser that is paid to the seller after the purchase is concluded. It serves as security that the purchase contract will be duly fulfilled at the specified time.
• insurance
  • Takaful ( German  "mutual guarantee", "reciprocity" , from Arabic   ta'awan , "help" and Arabic   kafala , "guarantee"): Conventional insurance contracts also violate "Riba" (interest-bearing security assets ), "Gharar" (speculation about the Occurrence of the insured event ) and "Maysir" ( bet with the insurer about occurrence of the damage ). This is why reciprocity avoids these violations by prescribing an earmarked donation ( Arabic tabarru ) from the policyholder to a collective asset instead of the insurance premium , from which the damage is paid in the event of an insured event . If the collective assets are not sufficient to settle claims, the insurer is obliged to pay non-repayable loans ( Arabic quard ), which are equivalent to a loss carried forward .     

These financial instruments have numerous subspecies. A substantial part of these financial contracts is used in Islamic banking . The Accounting and Auditing Organization for Islamic Institutions (AAOIFI) , founded in Bahrain in February 1990, oversees the standardization of these contracts, the checking of their conformity with the Shari'a and the accounting . In 2016, the AAOIFI published 48 Shari'a standards, 26 accounting standards and 5 auditing standards .

documentation

From the point of view of the major international banks , the external financing is credit business . The non-Islamic credit institutions classify this debt financing as loans , the Islamic business partners as borrowers and the transaction as a credit transaction with credit risk . The Islamic business partners are given a rating . The loan agreements are based on the standard agreements of the Loan Market Association with the participation of international law firms . Conformity with Islamic law is ensured on the one hand by the AAOFI and on the other by Islamic legal opinions ( Arabic   fatwa ) by legal scholars ( Arabic   ʿUlamā ' ). After IFRS prepare balance sheets of major international banks may these transactions after the accounting principle of the primacy of content over the form ( English substance over form , economic approach , as IFRS 9, 10) won as interest-bearing loans.

literature

• Daniel K. Bergmann: Islamic Banking. BoD, 2008, ISBN 978-3-8334-8974-7 .
• Hatem Imran: Islamic Business Law. Norms and principles of an alternative economic system. Salzwasser Verlag, 2008, ISBN 978-3-86741-092-2 .
• Michael Gassner, Philipp Wackerbeck: Islamic Finance. Bank-Verlag Medien, 2010, ISBN 978-3-86556-211-1 .
• Zaid El-Mogaddedi: Sukuk growth market (PDF).
• Michael Mahlknecht: Islamic Finance: Introduction to Theory and Practice. Wiley, Weinheim 2009, 325 pages, ISBN 978-3-527-50389-6 .
• Michael Mahlknecht: Islamic Capital Markets and Risk Management. Risk Books, London 2009, ISBN 978-1-906348-17-5 .

Web links

• Dow Jones Islamic Market Indexes
• Islamic Finance Techniques
• M. Gassner, J.Wieners: consumer finance (PDF; 950 kB)
• General information on Islamic banking
• Handelsblatt on business with Islamic financial products

Individual evidence

1. ↑ Katrin Geilfuß: Islamic banking in Germany . 2009, p. 6
2. ↑ Sven Gußmann: Islamic Finance - What are the challenges for the European financial center? 2014, p. 1
3. ^ Hans Hattenhauer: European legal history . 1999, p. 268 f.
4. ↑ Amr Mohamed El Tiby Ahmed: Islamic Banking: How to Manage Risk and Improve Profitability . 2011, p. 3
5. ↑ Steffen Jörg: The prohibition of interest in the Islamic economic order. 2015, p. 63.
6. ^ Abdullah Saeed: Islamic Banking and Interest. 1999, p. 13 ( books.google.de ).
7. ^ Abdullah Saeed: Islamic Banking and Interest . 1999, p. 15
8. ↑ Michael Mahlknecht: Islamic Finance. 2008, p. 69 ( books.google.de ).
9. ↑ Mahmood-ur-Rahman Faisal vs. Government of Pakistan, 44 PLD, 1992, 1
10. ↑ Michael Mahlknecht: Islamic Finance . 2008, p. 86
11. ↑ Michael Gassner, Philipp Wackerbeck: Islamic Finance: Islam-fair financial investments and financing. 2007, p. 52.
12. ↑ Angelo M. Venardos: Current Issues in Islamic Banking and Finance. 2010, p. 248 ff. ( Books.google.de ).
13. ↑ Uni press, issues 132-139. 2007, p. 21.
14. ↑ Michael Gassner, Philipp Wackerbeck: Islamic Finance: Islam-Just Financial Investments and Financing , 2007, p. 61
15. ↑ Michael Gassner, Philipp Wackerbeck: Islamic Finance: Islam-fair financial investments and financing. 2007, p. 84 ff.
16. ^ Daniel K. Bergmann: Islamic Banking: A Study Handbook , 2008, p. 100
17. ↑ Fred Wagner: Gabler Insurance Lexicon. 2017, p. 900 ( books.google.de ).