Introduction to Islamic Finance
Islamic banking and finance is a topic that is become ever more important and relevant in the changing global economic climate.
I am producing a comprehensive set of resources for education of Islamic banking and finance, and I am delighted to introduce you to the first step.
I have decided to create this course to help those who want a understand what Islamic Finance is all about, as well as those who know the basics, and wish to learn more details and the products and contracts.
Please read more below about the course and how it can benefit you.
This course will help you ...
In this course, you will learn about how Islamic Finance is used to build transactions and products that are compliant with Islamic law.
I have spent my career in investment banking, and specialising in Islamic Banking. I have written five books on Islamic banking and finance. I really enjoy teaching and educating.
I am constantly surprised about how many of us actually know very little about Islamic finance. I am also quite disappointed in the quality of educational material that is available, and this includes commercial courses. Very often it is created and delivered by those with no real experience of the sector and the markets.
I aim to fix this by delivering courses that focus on the practical realities of the global markets, and explaining how contracts are structured and created. You will learn how the simple sale of commodity is used to create corporate loans of $1bn and more.
INTRODUCING THE COURSE
Upon registering, you will have access to a course of around 30 videos that cover Islamic banking and finance. Each video is around 15-20 minutes long on average.
The detailed contents are listed below. You can go through the videos at your own pace. There will be a quiz at the end, to see how well you have digested and learned the topics.
You will also be provided with a certificate after completing the course, and this course will qualify for CPD (Continued Professional Development) if you work in a related field.
Learn about the main elements of Islamic Law, and the four major sources of law. We will then move on to Fiqh al Ibadah and Fiqh al Muamalat, and introduce Islamic Commercial Law
We will cover the main rules and principles that are used in Islamic finance, including Riba, Gharar, speculation and rules concerning debt
Riba and Banking
Learn how the Islamic approach required differs from the approach of conventional banks, and how Islamic banks should create a new paradigm for banking and finance
Major Contract Types
We cover the most important contracts used in Islamic Finance, including Mudarabah, Wakalah, Murabaha and Ijara
From Contracts to Products
Learn how these contracts are utilised by Islamic banks to deliver real financial products. We will see how several transactions are required to complete a structure, and how banks deal with the risks that arise
We will see how Islamic banks deliver products such as savings accounts, credit cards, home finance and car finance. We will see that the banks often have a variety of structures to choose from
Moving from the retail space, we will cover how banks deliver financing to their corporate clients, including commercial loans and syndicated finance
Investments and Sukuk
Learn how investments and funds are structured, and how exposure to assets can be delivered. We also cover the major topic of Sukuk, and see how a structure is created from first principles
IN THIS TRAINING YOU WILL LEARN ...
How Islamic commercial law is used to derive principles and rules
How major contract types are used to create the basis for financial products
How a contract type is used within a larger structure to deliver financial products to customers
How Islamic banks identify and deal with risks that arise from the changes required in contracts and products
How simple contracts can be used to deliver complex and detailed products like Sukuk and retail banking products
THIS IS FOR YOU IF YOU ARE ...
Interested in how Islamic banking and finance operates - not just the theory
Keen to discover how financial products are actually structured and created
A potential customer of an Islamic bank and want to understand the details behind their retail products
Working in the finance field and wish to expand your knowledge base
Not a finance professional and want a simple, clearly explained course on Islamic banking and finance
ABOUT THE INSTRUCTOR
Safdar Alam is an investment banker and has worked at some of the largest banks in the world, and has held senior positions at UBS, Credit Agricole and JPM Morgan as Global Head of Islamic Structuring. He writes, consults and teaches about Islamic banking and finance. As well as blogging at www.safdaralam.com, he has written for a variety of the most respected publications in the world. He is a published author and his books are available on Amazon.
Safdar is a keen supporter of true Islamic finance and the potential it holds to deliver the transformation of the global banking sector that is required.
Islamic law and Islamic commercial law
In this section, we cover the basis for Islamic law, and the four major sources of law, being:
We cover each course in some detail, and discuss the general approach by scholars in deriving Islamic law from these sources.
We then move to the topic of Islamic commercial law.
Principles of Islamic banking derived from law
We cover the major topics of:
Rules about debt
We cover Riba in some detail, as this is a topic that is quite complex in nature. We talk about Riba as it appears in the Quran, and as it appears in Sunnah and ahadeeth. We also discuss how, historically, it has been impossible to ban interest.
From rules to contracts
We cover the impact of the banning of Riba on traditional banking activities. We discuss how a shift in paradigm is required to establish a financial system that is in accordance with Islamic law. We discuss the nature of money, and how it has moved from being a physical asset to being an asset based on trust and perception.
We then talk about some classic contracts in Islamic banking and finance, such as:
This covers the classic contracts – the next stage is to see how these are used to structure and deliver modern financial products
Applications of contracts
We see how the classic contractual forms are now amended and structured to deliver common financial products. We discuss the following products in detail:
Retail banking deposits and savings accounts
Investments, equity funds and Sukuk
Here, we discuss these 3 key products. We discuss that an asset must be halal, but also how you acquire exposure to the asset must also be in a permissible manner.
We cover equities and equity funds, and the different types of screening applie to ensure the stocks are halal or not. This includes qualitative screening (the main business of the company) as well as qualitative screening (financial ratios and levels of debt).
We then move onto the broad topic of Sukuk – Islamic bonds. We talk about the major commercial requirements of a Sukuk, and then we through a standard Ijara Sukuk structure. We look at how Sukuks are priced, and the difference between profit and interest payments on bonds.
We then go over additional Sukuk structures (Mudarabah Sukuk and Murabaha Sukuk) and examine the key differences in the various structures used in the markets.