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This article provides an introduction to key concepts and methods involved in an Islamic approach to business, investment, risk taking and insurance. The prohibition of riba (interest or usury) profoundly influences the way business transactions and investments are made and financial contracts must comply with Islamic law or shariah. Underlying all economic and financial transactions from an Islamic perspective is a moral dimension, with the authoritative source of guidance being the Holy Quran, the revealed word of Allah, and the Hadith, the sayings and practices of the Prophet Muhammad and his companions, referred to as the Sunnah. Notably there is a concern about the justice of outcomes for individuals. A valuable contribution of the Islamic finance industry-with over one trillion dollars’ worth of assets designated as shariah compliant-is the issues it raises about morality and social accountability in financial dealings and the challenge it poses to conventional assumptions.
Rodney Wilson is Director of Postgraduate Studies at Durham University’s School of Government and International Affairs. He currently chairs the academic committee of the Institute of Islamic Banking and Insurance in London and is acting as consultant to the Islamic Financial Services Board with respect to its Shariah Governance Guidelines. His previous consultancy experience included work for the Islamic Development Bank in Jeddah and the Ministry of Economy and Planning in Riyadh. He has written numerous books and articles on Islamic finance for leading international publishers as well as professional guides. Professor Wilson teaches masters level courses on Islamic economics and finance and supervises PhD students working on Islamic finance. He has acted as Course Director for Euromoney Legal Training in London, Bahrain, Kuwait, Bangkok and Singapore, and taken courses for the Kuwait Investment Authority, the Commercial Bank of Kuwait, the Arab Banking Corporation, Citibank, HSBC, the Monetary Authority of Singapore and SJ Berwin, the international law firm and private equity specialist.
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