Islamic Finance and Banking

Islamic finance is not conventional finance dressed in Arabic terminology. It is a principled system in which contracts, ownership, risk, ethics, and social purpose must work together.

Islamic Finance and Banking: Principles, Contracts, and Practice offers a rigorous yet accessible introduction to the principles, legal structures, institutions, and contemporary applications of Islamic finance. Developed from more than a decade of teaching the subject, the book bridges classical Islamic commercial law, modern financial practice, international standards, and the distinctive realities of the Philippines and the Bangsamoro.

Across fifteen carefully structured lessons, readers are guided from the moral and legal foundations of Islamic economic life to the practical operation of Islamic financial institutions. The discussion explains the prohibition of ribā, gharar, maysir, fraud, and unjust enrichment while showing how lawful profit, trade, leasing, investment, and risk-sharing are constructed. Major contracts-including murābaḥah, muḍārabah, mushārakah, ijārah, salam, and istiṣnāʿ-are examined not merely as definitions but as living financial arrangements whose validity depends on ownership, sequence, documentation, risk, and genuine economic substance.

The book also explores Islamic banking operations; deposits and financing; ṣukūk; takāful; Islamic social finance; Sharīʿah governance; accounting; regulation; risk management; financial inclusion; sustainability; fintech; and other technological innovations reshaping the industry. Throughout, it asks a vital question: Does a transaction merely reproduce the form of Sharīʿah compliance, or do its substance, execution, and consequences truly reflect Islamic law and moral responsibility?

Grounded in Philippine and Bangsamoro realities while engaging international standards and comparative practice, this volume helps readers understand both the possibilities and the challenges of developing Islamic finance in a jurisdiction where the industry continues to emerge. Legal, ethical, and economic explanations are connected to practical problems faced by financial institutions, regulators, entrepreneurs, advisers, and communities.

Each lesson includes:

- Core questions and clearly stated learning outcomes
- Practical opening scenarios and transaction analysis
- Clear explanations of legal, ethical, and economic principles
- Worked examples, comparative tables, and case studies
- "Pause and Think," "Reading Principle," and cautionary reflections
- Lesson summaries, key terms, and review questions
- Critical-reflection tasks, integrative assessments, and classroom activities

Written for undergraduate and graduate students, educators, bankers, lawyers, Sharīʿah advisers, regulators, entrepreneurs, policymakers, researchers, and general readers, the book develops the judgment needed to ask: What is actually being financed? Who owns the asset? Who bears the risk? Why is the return lawful? Does the arrangement serve justice, trust, transparency, and the common good?

More than a catalogue of Arabic contract names, Islamic Finance and Banking is both a comprehensive textbook and a practical guide to understanding-and responsibly shaping-the future of Islamic finance.