GC UNIVERSITY, FAISALABAD

FACULTY OF ECONOMICS & MANAGEMENT SCIENCES

LYALLPUR BUSINESS SCHOOL

Course Specifications

Islamic Banking
FIN-612

Fall 2020
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 COURSE SPECIFICATIONS
Basic Information
Course Title: Islamic Banking

Course Code: FIN-612

Course credits/week: Theory: 03 Lab: Nil Total: 03
Pre-requisite(s): Money Banking and Finance, Financial
Institutions
Co-requisite(s):
Program(s) on which the course is given: BBA 7th Semester (Finance)

Is the course major or minor element of the program: Major: Minor:

Department offering the program: Lyallpur Business School

Department offering the course: Finance Division
Academic year/level: 4
Revision #: N.A
Last revised on (date): N.A

Overall Aims of the Course

Course Description:
Each subject at BBA (Hons) level requires a set of aims and learning outcomes which is required
from both lecturers and students. The aims and learning outcomes also guide the way in which
your performance on the subject is assessed. Assessments are used to determine the degree to
which you have achieved the desired learning outcomes of the module.

This economics and finance course will give you an overview of the Islamic financial system.
You will learn the core principles and basic models of Islamic finance and establish a framework
for understanding this financial system. On completion of the course you will have developed a
good foundational understanding of the core principles, the various norms and prohibitions that
govern activities and contracts in the Islamic financial system, the differences between the
Islamic financial system and the conventional system, as well as the basic modes of Islamic
finance.  The case study will provide you with “real-life” situations and allow you to apply the
content and knowledge you have acquired during this course.

WHY Islamic Banking: This introductory course is designed to teach delegates the
principles of Islamic Banking and to highlight the differences between Islamic and conventional
banking. It explores the different products and services commonly found in both the GCC and the
Islamic market globally and it assesses the relative advantages and disadvantages of each. By the
end of the course delegates will have a full understanding of the products and principles involved
in Islamic Banking and how they differ from Western banking models.

Course Objectives are:

 To provide an introduction to the basic concepts of Islamic banking and finance

applied locally and globally.
 To simplify and explain the theories and concepts of the Islamic financial
instruments used in the Islamic finance industry. This will give a practical
exposure to the students on implementation of Islamic finance concepts in real
life situations and especially in day to day management of finances for
businesses in a Sharia’h compliant way.
 To understand and analyze finance theories and concepts in the light of Islamic
philosophy/ Islamic Sharia’h and the mechanism involved in developing financial
products.
 To appraise the efforts undertaken in Pakistan and other Islamic countries at the
state level as well as in private sector to revamp overall economy on the
universal principles of Shariah.
 To outline the challenges faced in transformation of the finance industry as well
as the economy from so-called interest based modes to interest free
transactions.
 To appraise the efforts made by The State Bank of Pakistan in this direction and
of course, what is needed to be done to realize the full impact of Shariah based economy.

Learning Outcomes:

Upon completion of this course, the student will be able to

 Understand core principles of the Islamic financial system.

 Understand various norms and prohibitions that govern activities and contracts in the
Islamic financial system.
 Understand the differences between the Islamic financial system, and its institutions, and
the conventional system.
 Understand some of the basic modes of Islamic finance.
 The Teaching and Learning Schedule:

Beginning with the fundamental guidelines of Islam in the arena of dealings and
business transactions, this course covers the application of canonical Islamic
laws to modern financial transactions. Although the focus is on commercial
banking, other aspects of financial marketplace are also addressed.

Our weekly class Instructions and discussions will follow this format:

1st Week
Orientation Session: Introduction of Subject, objectives and contents. General concepts of
Islam related to Islamic banking and Finance. Belief in Divine Guidance and the basic
difference between Capitalist and Islamic Economy. Islamic Finance, Justice Mufti
Muhammad Taqi Usmani (Page 9-12).
2nd & 3rd Week
Asset-backed Financing, Capital & Entrepreneur, Present practice of Islamic Banks. The concept
of Musharakah, Musharakah Financing, The basic Rule of Musharakah, The nature of the Capital.
This week students will visit different branches of Islamic banks in Faisalabad for practical
information. Islamic Finance Justice Mufti Muhammad Taqi Usmani (Page 12- 29).

4th Week
Mudarabah Financing, The concept of Mudarabah, Business of the Mudarabah. Termination of
Mudarabah , combination of Mudarabah and Musharakah. Discuss major loans of Meezan Bank
related to Musharakah Financing. Islamic Finance Justice Mufti Muhammad Taqi Usmani (Page
31-35).

5th & 6th Week

Musharakah & Mudarabah as Modes of Financing. Introduction, Project Financing.
Securitization of Musharakah. Financing of the single transaction, financing of the working
capital. Musharakah & Mudarabah as Modes of Financing. Sharing in the Gross Profit only,
Running Musharakah Account on the Basis of Daily Product. Islamic Finance Justice Mufti
Muhammad Taqi Usmani (Page 37-56).

7th Week
Musharakah & Mudarabah as Modes of Financing & Diminishing Musharakah, Some objection
on Musharakah Financing. Diminishing Musharakah, Diminishing Musharakah for carrying
business and services. Diminishing Musharakah in trade. Islamic Finance Justice Mufti
Muhammad Taqi Usmani (Page 38-63).
8th Week
This week student will learn and discuss different types of Islamic banking product and also
differentiate between Meezan Bank and Bank Islamic Mudarabah mode of financing as practical
implementation.

Mid Semester Examination

9th & 10th Week

Murabahah Financing, Introduction, Some basic rule of sale. Features of Murabahah
Financing. Introduction of Ijarah, basic rule s of leasing. Lease as a mode of financing.
Islamic Finance Justice Mufti Muhammad Taqi Usmani (Page 65- 113).

11th Week
Lease as Mode of financing, Termination of lease. Securitization of Ijarah. This week
students will visit different branches of Islamic banks in Faisalabad for practical information.
Islamic Finance Justice Mufti Muhammad Taqi Usmani (Page 113- 126).

12th Week
Islamic Investment Funds. Introduction, Equity Fund. Condition for investment in Share.
Ijarah Fund, Commodity Fund. Murabahah Fund, Mixed Fund. Islamic Finance Justice Mufti
Muhammad Taqi Usmani (Page 140- 151).

13th & 14th Week

Limited Liability, some form of liability, different modes of Islamic financing related to
limited liability companies. The Performance of the Islamic Banks. The performance of
Islamic Banks A realistic evaluation. Islamic Finance Justice Mufti Muhammad Taqi Usmani
(Page 152- 161).

15th Week
Introduction to Islamic Insurance, Different types of Takaful for individual and business
entities. Major Takaful institutes in Pakistan and their performance evaluation. Data will be
collected and discuss through online information and physical visits of students into different
branches of Takaful.

16th Week
Islamic Banking Project discussion and Presentation of students related the Islamic and
conventional banking institutes of Pakistan.
Required Learning Resources
Text Book(s): Islamic Finance, Justice Mufti Muhammad Taqi Usmani, (Latest
(Title, Author, Edition, Publisher) Eition).

Reference Book(s): Islamic Economics, Theory and Practice(Latest Edition), by M.A.

(Title, Author, Edition, Publisher) Mannan; Sh. Muhammad Ashraf Publisher, Lahore, Pakistan.
Managing Finances: A shariah compliant way by Omar Mustafa
Ansari,Time management Club Publisher, Karachi.
Assignments Schedule& Quiz
No. Week Assigned Week Due QUIZ TESTS
Four surprise quiz tests will be conducted
1 4 6 during the semester, best of two will be
counted for a final grade. There will be no
2 12 14 makeup of these tests.

Examination / Weighting of Assessments& Quizzes

Quizzes + Assignments + Class Participation + Projects 20 %
Mid-semester examination 30 %
End-semester examination 50 %
Grading Criteria
Letter Grade Percentage Marks
A 80 -100 EXCELLENT
B 65-79.99 GOOD
C 50-64.99 SATISFACTORY
D 40-49.99 PASS

Dress Code:
Formal business attire only (Dress Shirt and Tie) T-shirts are NOT ALLOWED
for online classes, and if normal class sessions resume then full formal dress is
advised.
Not sure, what this dress code means? Read When Job-Hunting: Dress for
Success.

Instructor Responsibilities:
In keeping with the format of this class, I see myself as your immediate supervisor. In
that sense, I plan to mentor each of you so that you learn how to make the best decisions
possible, to understand and apply key concepts related industrial systems and standards,
and to prepare you to become productive employees upon graduation. I will do my best to
help each of you grow into the best manager you choose to become.
Student Responsibilities:
You are expected to arrive to class on time and professionally dressed. You should
remember that a single lecture on a topic cannot cover everything you need to know to
pass the assessments well. You are expected to undertake some reading and preparation
before attending classes. You are wasting your own time if you come along without any
prior study and do not contribute to discussion. You are expected to listen, respond, ask
questions and show respect to other who are talking in the class or seminars. Attendance
at lectures is extremely important. A record of attendance will be taken at class. If you
miss class, it will be your responsibility to get any material you miss from one of your
classmates.
Eating, sleeping, reading, texting, listening to or working on unrelated materials, sidebar
conversations, or “multi‐tasking” using a computer or other electronic device is not
permitted. Laptops (and similar devices) may be used in class for course related activities
such as taking notes.

Contact Details:
Dr. Muhammad Rizwan Kamran Assistant Professor (Division of Finance)
Lyallpur Business School,
Faculty of Economics & Management
Sciences,
GC University, Faisalabad, Pakistan.
Office Hours Monday to Friday 08:30 to 04:00 PM
Phone(office): 041-9203020 E-Mail: [email protected]
Course Specifications Developed By: Reviewed By
Dr. Muhammad Rizwan Kamran DR. Amir Inaam Bhutta
Date: 21-09-2020 Date: 24-09-2020