Islamic Banking (MAEF740)

This course will cover 25 articles on various aspects of Islamic finance written by some of the leading authorities in the field.

The main topics addressed are (1) foundations of Islamic finance, (2) operations of Islamic banks, (3) markets and instruments, (4) Islamic banks and development, and (5) globalization of Islamic finance. A recurring theme is the adaptation of Shari’a (Islamic religious law) to modern financial practices.

Learning Objectives:

• Students will be able to state advanced and specific concepts in Islamic banking (and its relationship with the whole system of Islam.
• Students will be able to write on the field of Islamic banking theory and practice.
• Students will be able to summarize in their own words, the goals of Sharia in relation to the industry and the successes/challenges facing the industry.
• The students will be able to understand the main theories that apply to the structure of Islamic banking.

Course Outline:

The course will follow the outline of the book’s five parts, each containing four to six articles, address the following topics: (1) foundations of Islamic finance, (2) operations of Islamic banks, (3) markets and instruments, (4) Islamic banks and development, and (5) globalization of Islamic finance.

A recurring theme in the book is the adaptation of Shari’a (Islamic religious law) to modern financial practices. For example, it notes that although Hinduism, Judaism, Christianity, and Islam all opposed usury in the past, Islam remains the only major religion to prohibit the charging of interest. Pointing out similarities between modern Islamic financial practices and techniques used to circumvent the Roman Catholic Church’s opposition to usury in medieval times, Lewis questions whether Islam can sustain its ban.