Theoretically speaking, Islamic banks have an equity-based capital structure. This structure largely consists of shareholders' equity and investment deposits based on profit and loss sharing (PLS).
This article outlines the history of Islamic finance in Pakistan, with an emphasis on the use of mudarabas , originating in 1985. Reforms in the tax structure need to be carried out in order to further develop the Islamic finance sector.
The preferred method of Islamic finance is leasing, as it is directly related to asset ownership. Leasing is particularly attractive given the security over assets offerred, the ability to invest in long-term assets, and the flexibility allowed for in structuring leases. Islamic leases present an opportunity to reach out to what is a largely unexplored investor base. The share of Islamic leases compared to overall investments is relatively small.
This article highlights a case study in management of an Islamic bank looking to regain a stronghold in market control in the Middle East. The steps employed in the process involved assessing the current position of the bank, along with establishing the customer demands to be met, followed by product development.
Both the state and society are responsible for the alleviation of poverty in Islamic countries, a process that primarily involves the use of zakah. The Qur'an and Sunnah, while demarcating citizens into eight categories, do not clearly stipulate how to distribute zakah.