Key Points:
Islamic finance is premised upon the belief that commercial
activity should be beneficial to society and reflect sound moral
and ethical standards.
With the global financial crisis constricting the availability
of capital, borrowers need to consider all options available for
their financing needs. While these options typically take the form
of conventional banking and capital markets options (whether
domestic or international) alternative sources of financing are
also being scrutinised. One such alternative source is
Islamic-compliant financing (Islamic finance).
Islamic finance has in recent times been one of the most dynamic
sectors of the global financial industry. As of June 2008, the
Islamic financial industry, including Islamic banks, mutual funds,
insurance schemes and Islamic branches of conventional banks, was
estimated to be worth around US$800 billion.1 There are
more than 300 Islamic banks operating worldwide and more than a
fifth of the
