Islamic Finance

Since the inception of modern Islamic banking in the 1960s, the financial industry across the world has become more dynamic. Innovative products are being introduced by the financial institutions regularly with Islamic Finance as no exception. One such innovation in Islamic Finance is Sukuk which has attracted large group of diverse stakeholders and huge investments. However, recent uncertainty in the Sukuk markets has raised alarm and investors began to question the proclaimed certainty of this Islamic Financial instrument. The reasons for this scepticism include lack of information about the structure of Sukuk and this is addressed by the book under review, particularly in relation to the misunderstanding of Sukuk issuance. Besides an introduction, the book includes seven essays and two interviews with experts. The first paper ‘The Ping Pong of the Asset-Backed/Asset-Based Sukuk and the Way Forward’, by Faizal Ahmad Manjoo, presents an important legal dimensions of Sukuk, i.e. the true sale and purchase of Sukuk securities. Profit and loss sharing is the foundation of Islamic Finance which is currently lacking in Sukuk dealings both for the buyer and seller perspectives. This has placed a layer of complexity on the structure of Sukuk. The author argues, though, that both assets-backed and asset-based Sukuk are not following the strict criteria of the Shari[ah, asset-backed Sukuk being more in line with the principles of the Shari[ah.