A credible endeavour to link fundamentals with reality
This volume is a genuine symposium, written by 17 experts, three of whom happen to be members of the editorial board of this journal. Without hesitation, the book can be viewed as a volume of fundamentals on practical Islamic finance, investment and insurance.
It is clearly written and highly informative to anyone keen on understanding the various ramifications of this major and expanding field. A notable feature of the volume is its brevity, while at the same time covering virtually all branches of the sector. A further plus point is the fact that it is written by hands‐on practitioners, who deal on a daily basis with the matters on which they have written.
Three parts
The book is split into three main parts. The first presents the background to Islamic finance, starting with some relevant religious fundamentals, including stipulations from Islam's holy book (Quran) and other sources of the Sharia (Islamic Law).
Apart from the purely religious aspects, articles in the first part of the book consider three other prime issues, namely the development of Islamic banking and finance in Britain, the products furnished by Islamic Sharia as substitutes to interest‐based instruments, and the institutional infrastructure of the Islamic‐finance industry. The chapter/article on the latter looks at the roles of some major institutions, including the Jeddah‐based Islamic Development Bank, and the Bahrain‐domiciled Accounting and Auditing Organisation for Islamic Financial Institutions, in addition to the Figh Academy and Islamic Financial Services Board.
The focus of the second part is on the practical side, and clearly this is a decided advantage of the volume. In total, 15 brief chapters (or articles) are included in this part, dealing with a variety of issues ranging from Islamic mortgages to credit cards, as well as trade finance, investment banking, Islamic insurance (takaful), taxation, and Sharia screening of equity stocks.
The illustrations of the various Sharia‐compliant instruments are brief but clear enough, to make them intelligible to those who have little or no previous knowledge of this area of finance. In addition, each article is easily structured with a large number of headings, facilitating understanding and combating monotony.
This part of the book is impressive due to its clarity, down‐to‐earth manner, and fairly comprehensive coverage of the filed. The treatment of the various topics is lively, emphasising the salient points, with frequent presentations of diagrams and tables to spell out pertinent products. These illustrations/tables include workings of Islamic home‐mortgages, points of difference between takaful and conventional insurance, murabaha financing, and nature of sukuk al jara – to name only a few.
The third part of the volume contains four chapters/articles dealing with regulations. While focusing in the main on the UK framework for regulating these institutions, wider issues are also looked at, particularly Basel II capital adequacy guidelines, the role of Sharia supervisory boards, and how regulation varies from country to country.
Critique
This is essentially a practical book, written primarily by practitioners who are keeping abreast with developments in the field, and putting much of their valuable knowledge in print. The 23 articles deal with a variety of matters pertaining to Islamic finance, investment and insurance in a fairly balanced fashion.
To enrich the professional dimension of the book, there is additional information on openings for training courses, as well as on avenues for procuring information on such matters as Sharia‐compliant equity stocks.
While the style is clear and readable, the writers have kept their treatment of the various topics reasonably brief and up to the point. A book of this kind would, however, need to e revised rather frequently, in order to stay ahead in a fast‐changing industry like Islamic finance, investment and insurance.
Another point relates to co‐ordination, when 17 writers make contributions in their differing areas of specialism. To be fair, the consulting editor and editor haven successful in achieving a good measure of uniformity in style and structure. Yet, some differences do remain. For instance, some articles contain conclusions at the end, while others do not. Also, some contributors have made good use of graphical illustrations (e.g. to explain Islamic mortgages and murabaha financing) while others have steered away from this technique and stuck to the narrative style.
