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Islamic Financial Institutions Course
International Program on Islamic Economic and Finance
Term II/2010
Lecturer: Sartini, S.E., M.Sc.Acc., Ak
First Week Discussion
Learning Contract Introduction to Islamic Financial
Institution Discussion
Learning Contract
About the Lecturer Overview of the Subject Learning Objectives Learning Methods Assessment References
About the Lecturer Name: Sartini, S.E., M.Sc.Acc., Ak Website: www.sartini.wordpress.com Phone: 0274-783 6898 Email: [email protected] Address: Griya Suryo Asri II No. A4 RW:9
Suryodiningratan MJ II Yogyakarta Consultation Hours: By appointment only
Overview of the Subject This subject focuses on the discussion of Islamic
Financial Institutions, one of some subgroups of Islamic Financial System. The IFIs included in this discussions are IFIs banks such as Islamic commercial bank and BPRS; as well as IFIs non-banks such as Islamic leasing, Islamic insurance, BMT, Rahn, Islamic Capital Market and Islamic Fund Manager.
Although IFIs will be the main topic to be discussed in this subject, it will also discuss topics related to the other Islamic Financial System subgroups, including: Islamic Financial Instruments Islamic Financial Rules and Regulations Islamic Financial Control and Supervision
Another related topic that will also be discussed is topic on Islamic Public Institutions such as Zakat institution and Wakaf Institution
Learning Objectives
This subject aims to provide student, an understanding of :
The important of Islamic financial system, The Islamic Financial Instruments, The operation of Islamic Financial
Institutions, The Islamic financial rules and regulations, The mechanisms of Islamic financial
controls and supervisions Islamic Public Institutions
Learning Methods
Tutorial Presentation and Discussion
Assessment (1)
Task Value Deadline
Presentation & Discussion
20% Week 2-6 and 8-12
Assignments 10% Week 2-6 and 8-12
Essay 10% After first exam period (week 8)
Mid Term Exam 30% During first exam period (week 7)
Final Exam 30% During second exam period (week 14)
Assessment (2) Essay
Students are required to submit a 2000-2500 word essay about Islamic financial institutions. The precise topic will be announced in week 4, and the paper must be submitted in week 8. The essay must be written individually.
Assignment Students are required to make a presentation
material related to the topic discussed every week. Presentation & Discussion
Students must present their assignments. One student will present one topic. The schedule will be arranged together at the first meeting.
Students, who are not presenting their assignments, must participate as discussants.
Grading System
How about the university policy? What’s about this?
A : 85-100 B : 65-84 C : 45-64 D : 25-44 E < 24
Assessment policy Essays and assignments will not be
accepted after the due date unless arrangements for an extension of time have been made prior to the due date.
If you do not agree with the result that you achieve for any piece of assessment for this subject please contact the lecturer immediately.
You have a right to know the reasons why your work has received a certain grade and to request it be reassessed if you believe it has been unfairly assessed.
Subject Organization: Before Mid term Exam
Week Topic
1 Learning Contract and Introduction
2-3 Islamic Financial Instruments
3 Islamic Banks: Commercial Banks and BPRS
4 IFIs Non-Banks: BMT
5 IFIs Non-Banks: Islamic Leasing, Islamic Insurance, Rahn
6 IFIs Non-Banks: Islamic Capital Market and Fund Manager
Subject Organization: After Mid term Exam
Week Topic
8 Islamic Financial Rules and Regulations
9 Islamic Financial Controls an Supervisions
10 Islamic Public Institutions: Zakat Institution
11 Islamic Public Institutions: Wakaf Institution
12 Lesson from some IFIs and IPIs
13 Overview and RefreshmentFarewell Speeches
Introduction
The Need for This Subject
Background and Rationales Since the mid 20th century, there has been a
serious effort within Muslim societies to comply fully to the Islamic tenets in daily life.
This includes the application of Islamic economic teachings, as discussed in various verses of the holy Qur’an, in the ahadith, as well as exemplified in the real life of prophet Muhammad and his companions.
The real example of this effort can be seen in the establishment of Islamic financial institutions such as banks, insurance companies, capital markets, mutual funds and so forth, both in Muslim and non-Muslim countries.
Background & Rationales The proliferation of growth in the Islamic banking sector,
both nationally and internationally, has been remarkable. Islamic banks now stand side by side with their conventional counterparts in more than 150 countries worldwide.
Islamic Banking and Finance has become an important academic discipline and has attracted research in a number related areas such as the economics, finance, accounting, law, Syari’ah and others.
Demand for Islamic Banking and financial instruments as well as Islamic financial institutions have experienced a rapid growth internationally.
As an important financial activity in the Muslim world, knowledge and expertise in this discipline is very valuable, not only to the Islamic banks and financial institutions, but also to the Muslim world in ensuring sufficient number of experts and knowledgeable workers in this area
Scenario Patricia Aburdene (2007) in Megatrend 2010
The Power of Spiritualism Spirituality in Business
One of The Indonesian National Agendas President SBY Speech
Opening of Shariah Economic Festival http://www.indonesia.go.id/id/index2.php?option=com_content&do_pdf=1&id=6624
Budget BI for Economic Shariah Development (8 x Rp 1,3)Direktorat Perbankan Syariah BI (Dr. Mulya Siregar)
Overview of Islamic Economic
Why Islamic Economic?
Islam as a comprehensive way of life
AQIDAH SYARIAH AKHLAK
MUAMALAH IBADAH
SPECIAL RIGHT PUBLIC RIGHT
INTERIOR AFFAIRS EXTERIORS AFFAIRS
ADMINISTRATIVE ECONOMY CONSTITUENCY
FINANCE
Zarqa (1959)
Classic Islamic Economist
Abu Yusuf (731-798), Yahya Ibn Adham(818), El-Hariri (1054-1122), Tusi (1201-1274), Ibnu Taymiyah (1262-1328), Ibnu Khaldun (1332-1406), Shah Waliullah (1702-1763).
Contemporary Interest in Islamic Economics
End of II World War
Political Independence
of Moslems Countries
Islamic Resurgence
Desire to be free of colonial influence
Need to find Indigenous solutions to
socio economic problems
Rejection of western
capitalism and socialism
Answer in Islamic Heritage
Development of Islamic Economics (1)
1930’s – 40’s Fiqh and Kalam 1950’s – early 60’s economics
teachings and principles of Islam 1970’s – 80’s calls for Islamic
Economics and Islamic Economic System
Development of Islamic Economics (2)
Writing on Islamic Economics Jurists legalistic confined to riba,
zakat, banking, etc. Modernist liberal interpretation of
sources of Islam answer problems of today
Western trained Muslim Economiists combined fiqh and economics economic system and analysis
Development of Islamic Economics (3)
Contemporary Muslim Economic Thingking Agreement on philosophical foundation Agreement on sources of knowledge Agreement on general principles
Common “core” based on Qur’an and Sunnah
Development of Islamic Economics (4)
Differences arise in Interpretation of term and concept found in
Qur’an and Sunnah Approach and methodology followed in
building theoritical construct of Islamic Economics and Islamic Economics Systems
Interpretation of features in Islamic Economics System
Shades of Muslim economics thought
Development of Islamic Economics (5)
Need for comparative analysis of contemporary Moslem Economics thought Areas chosen approach and scope,
underlying assumptions, Features of an Islamic Economy, Distribution, Production
Scholar chosen (based on the literature written) M.A. Mannan, M.N. Siddiqi, S.N.H. Naqvi, M.Kahf, S.M. Taleghani, M. Baqir Al Sadr
For Further Discussion please refer to “Contemporary Islamic Economic Thought” written by M. Aslam Haneef
Outline of Islamic Economics System
Sector Public Sector Private SectorSocial
Welfare Sector
Major Function Maintenance of law order, justice and defensePromulgation and implementation of economic policiesManagement of properties under state ownershipEconomics intervention if necessary
Creation of wealthEconomic activities of production, consumption & distributions
Islamic Social Security (al takaful al ijtima’i)
Possible Institution
Government, ministries, and departmentsStatutory bodiesGovernment companies
Owner operatorSharikah
Public Sector (Bait al Mal, Bait al Zakat)Private sector (charitable org. individu)
Relevant Syariah Law
Government administrative laws i.e. company law, commercial law, Land law, taxation law
Various Fiqh of muamalah laws i.e. mudharabah, musyarakah, ijarah, etc
Various iftima’I i.e. zakah, waqf, tarikhah, sadaqah, qard
Special Features of Islamic Economic System
Inspired by Islamic worldview (tasawwur Islami)
The concept of wealth and ownership (vicegerency/khalifah)
The implementation of the objective of Islamic Law/Syariah (maqasid asy syariah)
The prohibition of riba, gharar Institutionalization of public service
institutions such as zakat, infak, sodaqoh and wakaf
Institutionalization of Islamic Fiancial Institutions
Introduction to fair competition and dan equitable market to achieve the efficiency and justice in economic transactions
Economic regulation trough al hisbah Equitable distribution of wealth to
achieve social justice (tazkiyah)
Special Features of Islamic Economic System
Foundations of Islamic Institutions and Islamic Financial System
Islamic Institutions
Characteristics Type Established by Moslems (majority owned by Moslem) For the benefit of Moslem communitiesOperated and regulated based on Islamic Law (Syariah)
Thought by Al Qur’an dan As Sunnah Solah, Zakah, HajjIntroduced by ijma’ Ullama traditional waqaf, BMTIntroduced by contemporary Ullama Islamic Financial Institutions
“Tidak ada keuntungan bagi orang-orang yang menyalahgunakan kekuasaannya, dan mereka tidak akan pernah memiliki pemimpin jika dipimpin oleh orang yang tidak baik”
(Al Afwah Al Awdi Pre-Islamic poet, as quoted by Al Mawardi Al Ahkam Al Sultaniyah)
Islamic System and Institutions
Didirikan dalam Tasawwur Islam Dikelola berdasar moral dan etika
Islam Diatur oleh syariah Islam
Maslahah Prinsip-prinsip untuk mencapai
terpenuhinya kepentingan umum. Good is lawful, and lawful must be
good. Tujuannya adalah untuk melindungi
kepentingan yaitu (Imam Syatibi): Daruriyat (kebutuhan dasar) Hajiyyat (kebutuhan tambahan) Tahsiniyyat (kebutuhan pelengkap)
Daruriyat
Melindungi: Deen (agama) Nafs (jiwa) Nasl (keturunan/keluarga) Mal (harta) ‘Aql (akal)
Hajiyyat
Tambahan terhadap kebutuhan pokok Jika diabaikan mungkin menimbulkan
kekurangan/masalah. Contoh: pelarangan penjualan alkohol
untuk menghindari konsumsi alkohol. Contoh: kemudahan dalam
menjalankan ibadah bagi orang sakit ataupun musafir.
Tahsiniyyat
Pemenuhan kebutuhan ini memberikan peningkatan kualitas hidup.
More desirable. Contoh: menghindari pemborosan.
Islamic Accountability Tanggungjawab transedental terhadap
Allah SWT (hablunmminnalah) Tanggung jawab sosial (hablumminanass) Setiap manusia adalah khalifah Kebahagiaan dunia dan akhirat Tujuan ekonomi tidak hanya menyangkut
keakayaan bersih tetapi juga meliputi pembersihan diri dan kekayaan (tazkiyah)
