In an era of recurring global economic shifts, high inflation, and volatile financial markets, the search for ethical, resilient, and equity-based financial systems has intensified. Introduction to Islamic Finance and Banking serves as the definitive gateway to understanding one of the fastest-growing sectors in the global financial landscape. Moving far beyond the mechanics of conventional, interest-based banking, this comprehensive text delivers a deep dive into a system anchored by moral philosophy, shared risk, and social justice. At its core, this book demystifies how a multi-trillion-dollar global industry operates entirely without the concept of Riba (usury/interest). It bridges the gap between ancient ethical frameworks and modern economic realities, proving that finance can be both highly profitable and socially responsible. The book provides a systematic, highly structured breakdown of the foundational principles that govern all Islamic financial transactions. A thorough investigation into why interest is prohibited and how the system replaces it with asset-backed, value-creating economic activities. How Islamic law mandates absolute transparency, contract clarity, and the strict prohibition of speculative execution or deceptive risk. An analysis of the foundational philosophy that capital providers and entrepreneurs must share both the risks and the rewards of an enterprise. The strict ethical filtering process that bars investments in harmful industries such as alcohol, gambling, weapons, and highly leveraged conventional institutions. This book illustrates how Islamic finance anchors every dollar to a real, tangible asset, creating an inherent buffer against artificial market bubbles and economic crashes.
Nicholas White is a distinguished economist, financial strategist, and leading academic authority in the field of global finance, specializing in the mechanics, law, and application of Sharia-compliant financial systems. With over two decades of experience spanning both Western capital markets and Islamic financial hubs in the Middle East and Southeast Asia, White bridges the gap between conventional economic theories and the ethical frameworks of Islamic jurisprudence. He holds a Ph.D. in International Finance and Economics from the London School of Economics (LSE), where his doctoral research focused on the comparative stability of asset-backed financial instruments against conventional debt-based models. Recognizing early in his career the rapid globalization of Islamic capital, he went on to earn a Master of Laws (LL.M.) in Islamic Commercial Law from the University of Jordan, mastering the foundational principles of Fiqh al-Muamalat (Islamic jurisprudence governing commercial transactions). He is also a certified Islamic Markets Professional and has served as a senior advisor to central banks, multilateral development institutions, and sovereign wealth funds on the structuring of sovereign Sukuk (Islamic bonds) and the implementation of regulatory frameworks for Islamic windows in conventional banks. Throughout his career, White has been a dedicated educator and researcher. He currently serves as a Professor of Practice in Global Islamic Finance at a prestigious international university, where he designs postgraduate curricula aimed at training the next generation of ethical finance leaders. His extensive fieldwork and consultations with prominent Sharia boards have given him a rare, practical insight into the real-world operational challenges of modern Islamic banking.
| Preface Chapter 1. Principles of Islamic Finance Overview Prohibition of Riba and its Rationale Murabaha as Cost-Plus Financing Shariah Supervisory Boards and their Role Chapter 2. Prohibition of Interest Riba Explained Riba Defined as Prohibited Increase in Islamic Law Trade and Commerce Permitted as Alternative Musharakah as Joint Venture Partnership Challenges in Implementation of Islamic Finance Chapter 3. Risk-Sharing in Islamic Finance Prohibition of Riba and its Risk Implications Risk-Sharing in Microfinance and Poverty Alleviation Challenges in Implementing Risk-Sharing Chapter 4. Ethical and Moral Foundations Principles of Islamic Economics Prohibition of Gharar and its Implications Objectives of Islamic Law in Financial Matters Ethics of Investment and Social Responsibility Environmental Ethics of Islamic Finance Ethics of Financial Inclusion Continuing Development of Islamic Financial Ethics Chapter 5. Mudarabah Profit-Sharing Contract Mudarabah Contract Definition and Fundamental Principles Comparison of Mudarabah with other Islamic Contracts Mudarabah and Economic Development Future Prospects for Mudarabah in Islamic Finance Chapter 6. Musharakah Joint Venture Structure Conceptual Foundations of Musharakah in Islamic Law Project Musharakah and Large-Scale Financing Risk Management in Musharakah Legal and Regulatory Framework for Musharakah Chapter 7. Murabahah Cost-Plus Financing Classical Foundations of Murabahah in Islamic Law Consumer Financing through Murabahah Accounting Treatment and Financial Reporting Chapter 8. Ijarah Leasing Arrangements Conceptual Foundation of Ijarah in Islamic Commercial Law Modern Ijarah Structures in Islamic Banking Ijarah Documentation and Legal Requirements Ijarah Pricing Methodologies and Benchmarking Ijarah Documentation Standards and Industry Best Practices Ijarah in Islamic Microfinance Applications Ijarah and Social Responsibility Ijarah and Strategic Planning Chapter 9. Salam Forward Sale Contracts Prophetic Authorization and Historical Context Differences between Salam and Conventional Futures Default and Remedies in Salam Contracts Salam and Agricultural Development Salam and Tawarruq Distinctions |
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