JAIBP Islamic Finance (Specialization) Syllabus

Islamic Finance (Specialization) syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Islamic Finance (Specialization) in JAIBP, not a summary of it.

1. 1

   Foundations of Islamic Finance

   3 topics

   • Principles of Islamic Economics
   • Prohibition of Riba, Gharar and Maysir
   • Sources of Shariah
2. 2

   Islamic Modes of Financing

   3 topics

   • Trade-Based Modes
   • Partnership-Based Modes
   • Rental-Based Modes (Ijarah)
3. 3

   Islamic Banking Products

   3 topics

   • Deposit Products and Pool Management
   • Consumer and Corporate Financing
   • Sukuk and Islamic Investments
4. 4

   Shariah Governance and Compliance

   3 topics

   • Shariah Supervisory Board
   • Shariah Audit and Compliance
   • SBP Shariah Governance Framework
5. 5

   Takaful and Risk Management

   3 topics

   • Concept and Models of Takaful
   • Liquidity and Risk Management in Islamic Banks
   • Accounting Standards (AAOIFI)

Islamic Finance (Specialization) flashcards for JAIBP

18 of 50 cards from the Islamic Finance (Specialization) deck — real questions with worked answers.

1. In Islamic economics, what is the foundational concept of ownership of all resources?

   Allah is the ultimate owner of all resources; humans are merely trustees (Khalifah/vicegerents) who hold and use wealth as a trust (Amanah) according to Shariah.

2. What are the three primary objectives (Maqasid al-Shariah) most relevant to Islamic finance?

   Protection of religion (Deen), life (Nafs), intellect (Aql), lineage/progeny (Nasl) and wealth (Maal). Preservation and growth of wealth through lawful means is the core economic objective.

3. Define Riba and state its two main types.

   Riba is any unlawful, predetermined excess/increase taken without an equivalent counter-value. Types: Riba al-Nasiah (excess due to deferment/interest on loans) and Riba al-Fadl (excess in spot exchange of the same ribawi commodity).

4. Name the six ribawi commodities mentioned in Hadith.

   Gold, silver, wheat, barley, dates and salt. Exchange of like-for-like among these must be equal and spot to avoid Riba al-Fadl.

5. Define Gharar and give an example.

   Gharar is excessive uncertainty or ambiguity in a contract regarding the subject matter, price, or delivery. Example: selling fish still in the sea or a calf not yet born.

6. Define Maysir (Qimar) in Islamic finance.

   Maysir is gambling/speculation — acquiring wealth by chance where one party gains at another's loss without productive effort or value creation. Conventional insurance and derivatives speculation are often deemed Maysir.

7. What are the four primary sources of Shariah in order of authority?

   1) Quran, 2) Sunnah (Hadith/practice of the Prophet PBUH), 3) Ijma (consensus of scholars), 4) Qiyas (analogical reasoning).

8. Differentiate Ijtihad and Taqlid.

   Ijtihad is independent juristic reasoning by a qualified scholar to derive rulings from sources. Taqlid is following the ruling of a qualified jurist without independent derivation.

9. What is Murabaha and its key disclosure requirement?

   Murabaha is a cost-plus sale where the seller (bank) discloses the actual cost and the agreed profit margin to the buyer. The bank must first own and possess the asset before selling it.

10. What is Musawamah and how does it differ from Murabaha?

    Musawamah is a normal sale where the price is negotiated without disclosing the cost to the buyer. Unlike Murabaha, no cost-plus-margin disclosure is required.

11. Define Salam and its main conditions.

    Salam is a forward sale where the full price is paid in advance (spot) for goods delivered at a future date. The commodity must be fungible, with quantity, quality and delivery date specified. Used mainly for agricultural produce.

12. Define Istisna and how its payment differs from Salam.

    Istisna is a contract for manufacturing/construction of an asset to specification. Unlike Salam, the price need not be paid in full in advance — it can be paid in instalments or on completion, and delivery is future.

13. What is Parallel Salam / Parallel Istisna?

    A back-to-back arrangement where the bank, having entered a Salam/Istisna as buyer, enters a second independent Salam/Istisna as seller to offload the goods. The two contracts must remain legally independent.

14. What is Tawarruq (commodity Murabaha) and its purpose?

    Tawarruq is buying a commodity on deferred-payment Murabaha then selling it to a third party for spot cash to obtain liquidity. Used for cash financing and liquidity management; organized Tawarruq is controversial.

15. Define Musharakah and how profit and loss are shared.

    Musharakah is a partnership where all partners contribute capital and share profit per a pre-agreed ratio, while losses are shared strictly in proportion to capital contribution.

16. Define Mudarabah and the roles of the two parties.

    Mudarabah is a partnership where one party (Rabb-ul-Maal) provides capital and the other (Mudarib) provides expertise/management. Profit is shared per agreed ratio; financial loss is borne solely by the capital provider (unless due to Mudarib's negligence).

17. What is Diminishing Musharakah (Musharakah Mutanaqisah)?

    A partnership where the bank and customer co-own an asset; the customer gradually buys the bank's share in units while paying rent on the bank's remaining share until full ownership transfers. Widely used for home financing.

18. State the key difference in loss-bearing between Musharakah and Mudarabah.

    In Musharakah all partners bear loss in proportion to capital. In Mudarabah only the capital provider (Rabb-ul-Maal) bears financial loss; the Mudarib loses only his effort/time (unless negligent).

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