M. Hanif Mir: Islamic Finance

Islamic Finance Industry Statistics

Council of Islamic Ideology Report--Islamic Banking (1980)

Council of Islamic Ideology (CII) in Pakistan issued a landmark report in 1980 to suggest the means and ways to transform the financial system from conventional to Islamic. This report contains detailed mechanism as how to switch the multiple financial contracts from existing conventional to proposed Islamic.

You can access the report via this link:

Supreme Court Pakistan--Riba Judgement (1999)
This is document includes a detailed analysis of conventional financial system and question marks from Shari'ah perspective. The judgement is written by Justice Taqi Usmani.

You can access detailed judgement via this link:

Islamic_economics/riba_judgement.pdf

Sharīʿah Screening Process of Capital Markets: An Evaluation of Methodologies

This study highlights the issues in the screening process of Sharīʿahcompliant stock universe from Sharīʿah and professional perspectives. We have critically analyzed Sharīʿah-compliance methodologies of selected (eight) institutions in the light of Islamic principles of business.

https://hanifmir.blogspot.com/2020/04/shariah-screening-process-of-capital.html
Hanif M. (2019), "Sharīʿah Screening Process of Capital Markets: An Evaluation of Methodologies", Journal of King Abdulaziz University: Islamic Economics, Vol. 32 No.1, pp.23-42.

Sharīʿah-compliance ratings of the Islamic financial services industry: a quantitative approach

This study aims to develop a Sharīʿah-compliance rating mechanism for the Islamic financial services industry (IFSI), with a special focus on banking. The banking sector is taken as the area of focus due to its leadership role in the volume of global Sharīʿah-compliant assets.

https://hanifmir.blogspot.com/2020/04/shariah-compliance-ratings-of-islamic.html
Hanif, M. (2018), "Sharīʿah-compliance ratings of the Islamic financial services industry: a quantitative approach", ISRA International Journal of Islamic Finance, Vol. 10 No. 2, pp. 162-184. https://doi.org/10.1108/IJIF-10-2017-0038

Portfolio selection in Asia/Pacific region-Islamic markets
Islamic capital markets, i.e. ICMs, featured as socially responsible investments, less levered and more reflective of the real sector, are a recent development in financial markets showing an impressive growth and offering the potential for portfolio diversification benefits. The purpose of this study is to understand the long-run integration of ICMs in the Asia/Pacific region.

https://hanifmir.blogspot.com/2020/03/portfolio-selection-in-asiapacific.html
Hanif, M. (2020), "Portfolio selection in Asia/Pacific region-Islamic markets", Journal of Islamic Accounting and Business Research, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JIABR-02-2018-0022

ISLAMIC MORTGAGES: PRINCIPLES AND PRACTICE
The purpose of this paper is to present an analysis of current practices of Islamic mortgages in the light of the principles of Islamic financial system, to document divergences – if any. A subsidiary goal is to develop an Islamic Mortgage Model (IMM) based on Musharakah principles.
https://hanifmir.blogspot.com/2020/04/islamic-mortgages-principles-and.html
Hanif, M. (2019), "Islamic mortgages: principles and practice", International Journal of Emerging Markets, Vol. 14 No. 5, pp. 967-987. https://doi.org/10.1108/IJOEM-02-2018-0088

Risk and returns in Shari’ah-compliant cross-section stocks: evidence from an emerging market

This study aims to understand and document the impact of market-based – market returns and momentum – as well as firm-specific – size, book-to-market (B/M) ratio, price-to-earnings ratio (PER) and cash flow (CF) – factors on pricing of Shari’ah-compliant securities as explanation of variations in stock returns in an emerging market – Pakistan’s Karachi Stock Exchange.

https://hanifmir.blogspot.com/2020/04/risk-and-returns-in-shariah-compliant.html
Hanif, M., Iqbal, A. and Shah, Z. (2019), "Risk and returns in Shari’ah-compliant cross-section stocks: evidence from an emerging market", Journal of Islamic Accounting and Business Research, Vol. 10 No. 5, pp. 621-643. https://doi.org/10.1108/JIABR-03-2016-0030

Islamic Finance/Banking

By the end of 2011, estimated global volume of assets of Islamic finance has reached to US$ 1,289 Billion (IFSL, 2012) with operations in more than 50 countries consisting of above 300 institutions. Islamic finance had shown tremendous growth in 2007 & 08; an era of economic downturn in developed countries including United States and Europe. Assets of Islamic finance had grown at the rate of 38% and 25% in 2007 and 2008 respectively, an era of economic recession in developed economies. Persian gulf area is the centre of Islamic financial system with a share of 80% followed by Fareast & south Asia region 15% and balance from rest of the world is contributed in Shari’a compliant assets (IFSL, 2012). Pakistan has remained chief proponent of Islamic banking because it is the only Muslim state which created on the basis of Islamic ideology. Islam is the state religion of Pakistan and any law repugnant to the injunctions of Islam is void as per constitution of Pakistan. In early eighties council of Islamic ideology presented blue print of interest free banking in its report and country wide efforts started to switch the economy towards interest free system. However due to number of reasons including dependence on foreign aids (concessional loans), incapacity of trained human resources required to run the economy on interest free basis, financial indiscipline, corruption, political instability etc. system could not run in its true spirit. Although all commercial banks started operation on profit and loss sharing but the practice was not in line with theory. Certain quarters took the case in federal Shari’a court and order passed in 1991; declared interest based banking haram (unlawful). Government of Pakistan was obliged to abide by the order of higher judiciary. By looking at the overall situation government decided to respond through two pronged strategy. On one hand a commission was set up for recommendations to Islamize the economy while on the other hand cases were pleaded in Supreme Court. Commission finalized its recommendations and Supreme Court given its decision in 1999 declaring the interest based banking haram(prohibited) with instruction to government to implement interest free system in the economy. By early 2000 onward a new strategy put into practice to Islamize the economy by state bank of Pakistan. Instead of moving abruptly towards interest free system (because the move made in eighties was failed badly) it was decided to promote the Islamic banking in parallel to conventional banking. Islamic banking department (IBD) was established in central bank to regulate the Islamic financial industry. IBD has done a great job so for in promotion and implementation of Islamic banking, although thrust is there for further promotion. Islamic banking has shown tremendous growth in Pakistan in last eight years period (12/03-12/11). By the end of December 2011, five full-fledged Islamic banks and 12-conventional banks with Independent Islamic Banking Branches are operating in Pakistan. Figure-2 depicts the growth in assets, deposits, and financial disbursements of IFIs working in Pakistan (SBP, 2011). Number of branches has been increased from 17 in 2003 to 886 within eight years an average annual increase of 72%. Assets increased at average annual rate of 71% while deposits increased at average annual rate of 79% and financial disbursements and investments increased at average annual rate of 68% during the period (12/03 - 12/11). Overall an average growth of 73% per annum in the last eight years (12/03-12/11) was achieved by Islamic banking in Pakistan. In Pakistan, Islamic banks accept deposits either as interest free loans or on profit and loss sharing basis and succeeded in getting the trust in the eyes of depositors. Average annual increase of 79% in deposits of IFIs working in Pakistan for last eight years is something cherishable. On the financing and investment side, modes of financing used by IFIs are categorized objectively as Shari’a based and Shari’a compliant (Hanif & Iqbal, 2010). For further reading please follow link: http://hanifmir.blogspot.com/