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Dr Abu Umar Faruq Ahmad Associate Professor, UBD School of Business and Economics

About Me Publications

Dr Abu Umar Faruq Ahmad

Associate Professor, UBD School of Business and Economics umar.ahmad@ubd.edu.bn


ABOUT ME

I am currently working as Associate Professor of Islamic Law of Transactions and Jurisprudence at UBD School of Business and Economics (UBDSBE), Universiti Brunei Darussalam. I have completed my first degree (Lissans) in Islamic Law in 1984 at the College of Sharī‘ah, Islamic University of Madinah, Saudi Arabia. Later, I was conferred LLM Honours in Islamic Banking in 2003, and PhD in Islamic Finance in 2008 by University of Western Sydney (UWS), Australia with ‘High Distinction’. Based on my LLM Honours dissertation I was awarded the most prestigious UWS Postgraduate Award (UWSPRA) scholarship to undertake my research on Australian practice of modern Islamic finance. My research on the subject is considered the first landmark contribution to Australian Islamic finance in terms of its regulation and the Sharī‘ah compliance of its current practice.

I have collaborated with other researchers in publishing few books and monographs, chapters in books, a significant number of peer reviewed refereed journal articles, and plethora of refereed conference proceedings on different areas of the subject of my specialization. Currently, I am working under a contract in collaboration with Professor Dr. M. Kabir Hassan (IDB Laureate) and Associate Professor Dr. Umar Oseni, with John Wiley & Sons (Singapore) for publication of a text book at post graduate level entitled Fundamentals of Islamic Banking and Finance (ISBN: 111872883). I am also working: 1) with Palgrave Macmillan (UK) for publication of 2 chapters: (a) in M. Shammari et. al (eds.), Islamic Business Administration (a textbook at postgraduate level), (b) in N. Alam et. al (eds.), Islamic Economies: Stability, Markets and Endowments; 2) with Emerald Group Publishing Limited (UK), in Toseef Azid, et al, eds. Research in Corporate and Shari`ah Governance in the Muslim World: Theory and Practice; and 3) with Qatar Faculty of Islamic Studies, Hamad Bin Khalifa University, and IRTI in M. N. Ali (ed.). Islamic Finance and Social Welfare. All these projects are in press for publication within the year 2017.

I speak regularly at international conferences and professional forums in different continents such as Asia, Europe, Australia, America and Africa. I have a particular interest in Sukuk, Takaful and Retakaful, banking regulations, Sharī‘ah and legal issues in Islamic finance, and case studies of Islamic banks and financial institutions from legal and regulatory perspectives. I am serving as Founding Editor, Co-editor and International Editorial Board Member for a few Scopus indexed journals including those published by Emerald Publishers.

EDUCATION

I completed my first degree (Lissans) in Islamic Law in 1984 at the College of Sharī‘ah, Islamic University of Madinah, Saudi Arabia. Later, I was conferred Master of Laws (Hons.) in Islamic Banking in 2003 and PhD in Islamic Finance in 2008 by Western Sydney University, Australia with High Distinction.

RESEARCH INTERESTS

Takaful and Retakaful, Sukuk, Dispute Resolution in Islamic Finance, Sharī‘ah Compliance of the Products and Financial Instruments of Islamic Banks (IBs) and Financial Service Providers (IFSPs), Sharī‘ah Aspects of Islamic Finance, Islamic Law of Transaction, Islamic Jurisprudence, Regulation and Supervision of IBs, Corporate Social Responsibility of IBs, Islamic Microfinance, Zakah & Awqaf, Sharī‘ah Governance, Islamic Derivatives, Sharī‘ah Screening of Islamic Capital Market.

448

Google Scholar Citations

10

Google Scholar h-index

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Google Scholar i10-index


FUTURE PROJECTS

Towards sharing economy through proposed ‘shared responsibility’ model of Takaful: a Sharī‘ah analysis

Background: Takāful operation is based on shared responsibility, brotherhood, solidarity and mutual cooperation or assistance, which provides for mutual financial security and assistance to safeguard participants against a defined risk. The basic notion of Takāful is to bring equity to all parties involved, while the profit earning is not the prime objective, but is to help others, who face risks and sharing misfortunes. In today’s social and economic environment Takāful is a necessity since it conforms to the higher objectives of Shari`ah in the protection of life and wealth. It can be regarded as a risk management technique that is based on the principles of brotherhood and mutual solidarity and is in compliance with Shari`ah. Given the importance and need of risk mitigation in today’s business environment, the Shari`ah scholars have decided in favour of its application as an alternative to conventional insurance on account of its avoidance of riba, gharar and qimar in the risk mitigation process. It has been observed that almost all Takāful Business Models on the market today provide the use of a Takāful Operator that is led by a board of directors nominated by the shareholders. The Takāful Operator manages the Takāful Fund on behalf of the participants. Though this operational arrangement has been endorsed by the Shari`ah scholars, this arrangement is subject to severe criticisms. Aims: Given the above backdrop, the proposed shared responsibility model aims inter alia a) to discuss the concepts and foundations involved in the operations of the Takāful system; b) to describe the jurisprudential characterization of cooperative participation and its application in Takāful operations; c) to deliberate the structure and the contractual relationship among the Takāful participants in the proposed model; d) to delineate potential benefits and issues of proposed model; and e) to put some suggestions in line with its objective of making the system of Takāful a means for social welfare. It is pertinent to know that in order for any structure such as that of our proposed ‘Shared Responsibility’ model, to be valid from the perspectives of Sharīʿah, it must contain the following two key elements: i) It should not be of a commutative in nature in order to make sure that the inherent gharar in risk mitigation will not invalidate its contracts; and ii) It must be along the lines of the genuine intention and objectives of the participants in Takāful system to help and cooperate with each other in various situations. Having accomplished the above as per proposed ‘Shared Responsibility’ model, it is expected that no Sharīʿah legal problem will remain unresolved, gharar (ambiguity and risk) will not nullify the contracts, and the Takāful participants will hold the ownership of the risk fund. Our attempt also tends to ascertain the following two key points in order for the ‘Shared Responsibility’ contract to be sound and acceptable: i) Whether ‘Shared Responsibility’ is analogous to tabarru` (donation) to qualify deactivating the causes of gharar on contracts like an ordinary donation carries it out; ii) Whether the mutual commitments of Takāful participants to put forward their contributions on the basis of Shared Responsibility cause to invalidate the array of a mu`awadah (commercial) character and as a result the intrinsic gharar. In order for addressing the first issue we may refer to the practice of munahadah or pooling resources for the common good based on mutual cooperation as was explained by Ibn Hajar Al-`Asqalani in his explanatory treaties Fath Al-Bari on Sahih Al-Bukhari. His statement proves that notwithstanding the fact that nahd contains some degree of gharar emanating from the uneven contribution and disproportionate consumption of food; it was excused taking into consideration the underlying purpose of mutual cooperation behind it and that it was not a business or commercial venture. With regards to the second issue, it can be argued that the essence of mutuality and group sharing which has been recognized in nahd as mentioned by Al-Bukhari, Ibn Hajar and Al-`Ayni is an unambiguous proof that the reciprocal commitment of participants do not make the underpinning virtuous Takāful contract for mutual indemnification a mu`awadah based contract. This argument is valid in respect of the Takāful structures in vogue, but the commercial nature of the Takāful companies creates problem as the end products are practically the same as in case of insurance. Methodology: The study will utilize qualitative methodology, particularly document analysis. Most of the data are expected to be found in published literature. This literature consists of relevant academic journal papers, magazine articles, case studies, reports and other data, readily available online. Document analysis seems to be the most suitable approach based on the conceptual nature of the research. This method is also adopted due to the limited availability of resources and time constraint. Despite that constriction, it goes without saying that this research seeks to conduct and present a rigorous analysis of the comprehensive data set available from various sources regarding the subject matter; and try to fill up the research gap in this area. Expected Findings: The proposed ‘Shared Responsibility’ model is expected to best serve the objectives of Takāful that operates on the principle of co-operation. With the goal of community well-being, the Takāful entities need to be structured on the basis of cooperation, as the spirit of Takāful really requires. The members would pay contributions to a common pool managed by any of themselves as a Takāful Operator (TO) through some hired managers/directors. In this structure, such entities might be earning (valid) profits as allowed in Islam that will go to the participating community as per the principles of Islamic law of contracts. Mutual relationship among the participants in Takāful arrangement is that of partners for a good common cause who may pool resources for mutual indemnification of defined losses to any of them, as in case of nahd, a pre-Islamic institution approved by Islam. Every member will be getting benefit from the pooled resources in the form of claims money or the profits. It reflects a sense of brotherhood and solidarity among members of a group who mutually undertake by way of a non-commutative undertaking to help and assist one another in need. A provision can also be made that in case of any real and established difficulty or problem with a participant who is unable to pay the agreed contribution; the due amount could be deferred or even forgone in specific cases. Keeping in view the features of various Takāful business models in vogue, it can be said that the companies working as mutuals could be considered as the highest in ranking. The members/partners pooling resources for mutual indemnification of defined losses to any of them will be transferring the ownership to the common pool as they will contribute, while at the time of getting any help they would be taking ownership, and both activities would be independent – one is not in direct exchange of the other. Every member will be allowed to get benefit from the pooled resources, as in case of nahd. The model could also be feasible for corporate world in big-ticket developments for infrastructure projects that are being undertaken almost in all Islamic countries' economies. “It is a part of Islamic social philosophy according to which members cooperate and help each other in times of sadness as well as happiness” (Patel, 2004). It may also become a savings vehicle by way of family Takāful in case of demise of a bread-earner or for future planning and need fulfilment through entrepreneurial activities for entity’s fund management using the commutative contracts like wakalah, mudarabah or musharakah.

Application invited for: PhD

The Issue of post default Sukuk restructuring: a Sharī‘ah analysis

One of the features that differentiate Islamic financing documentation from that of conventional financing is the need for a new legal document to capture every variation of terms and conditions since Islamic finance emphasizes on agreement and mutual consent of contracting parties. This requirement becomes more apparent when it involves restructuring of a financing, especially for sale-based financing. Given that the restructuring of an Islamic facility is considered as vehicles for providing the customers with some other financing related facilities. One of the key objectives of Sukuk restructuring is to restructure the obligations of debtors in order for them to facilitate meeting their current debt obligations, and to consider the value of their assets and the potential for profitability of their business enterprise. Unlike conventional finance, the issue of post default Sukuk restructuring in Shari`ah compliant finance is related to the circumstances and conditions under which a facility may be restructured. In case of restructured facility a related Shari`ah issue whether change of contract means a new contract has to be entered, still remained debatable between the scholars, although the Shari`ah Advisory Committee of Bank Negara Malaysia has attempted to resolve the issue by stating that based on mutual agreement, the financing period for the customer may be extended without the need for a new contract, provided that both parties satisfy all concluded promises and the price imposed on the customer does not exceed the original sale price. Drawing on the scenario as mentioned above, this study would examine inter alia a) a conceptual analysis of post default restructuring of Sukuk; b) the Shari`ah viewpoint of the restructuring of Sukuk, and c) the key unresolved Shari`ah issues pertaining to these methods, and their possible solutions since the Shari`ah non-compliant commercial solutions are already available.

Application invited for: PhD

Management of Liquidity Risk in Islamic Banks’ Liabilities

Islamic banks, similar to their conventional counterparts face plethora of risks, which ultimately affect their operations and hence the performance. They are also required to take additional measures for scaling liquidity management due to their unique characteristics and requirements of the strict compliance of Shari`ah principles. Banks without having adequate liquidity, face various forms of risks such as those of fiduciary, displaced commercial, and other risks associated to them, which might lead to affect their financial stability as a whole. The key objective of this paper is to analyze the management of liquidity risk in Islamic banks' liabilities. Malaysian Islamic banking sector has been chosen as a case study. Keeping in view of this, the study examines inter alia the significance of size of the firm, capitalization, bank specialization and loan loss reserve ratio of some selected Islamic banks in Malaysia. The results show that the liquidity management of these Islamic banks is formed by the bank specification factors. The study recommends the concerned authority to implement all necessary means of integrated and comprehensive program in order for the management of liquidity risk to improve.

Application invited for: Masters by Reseach


RECENT PUBLICATIONS

1. Mobin, M., and Ahmad, A. (2017). “Achieving sustainable economic development through Islamic microfinance and potential of proposed two tier mudarabah waqf business model”, in M. K. Hassan (ed.), Handbook of empirical research on Islam and economic life, Edward Elgar Publishing, pp.193–212.

2. Ahmad, A. (2017). “Regulation, performance and future challenges of sukuk: the evidence from Asian markets,” in Mutum, D. et. al (eds.), Advances in Islamic finance, marketing and management: an Asian perspective, Emerald Group Publishing Limited, pp.27-48.

3. Ahmad, A., Mahbob, I., and Ayub, M. (2016). “The nature of Retakaful: risk sharing or transferring risks?”, in M. N. Ali and S. Nissar (eds.). Takaful and Islamic cooperative finance, Edward Elgar Publishing, pp.171-191.

4. Oseni, U., and Ahmad, A. (2016). “The legal implications of 'fatwā shopping' in the Islamic finance industry: problems, perceptions and prospects,” Arab Law Quarterly, (Scopus indexed), 30(2), 2016, pp.107-137.

5. Oseni, U., and Ahmad, A. (2016). “Towards a global hub: the legal framework for dispute resolution in Malaysia’s Islamic finance industry,” International Journal of Law and Management, (Scopus indexed), 58(1), pp.48-72.


TOP PUBLICATIONS

1. Oseni, U., and Ahmad, A. (2016). “Towards a global hub: the legal framework for dispute resolution in Malaysia’s Islamic finance industry,” International Journal of Law and Management, (Scopus indexed), 58(1), 2016, pp.48-72.

2. Oseni, U., and Ahmad, A., and Hassan, K. (2016). “The legal implications of 'fatwā shopping' in the Islamic finance industry: problems, perceptions and prospects,” Arab Law Quarterly, (Scopus indexed), 30(2), 2016, pp.107-137.

3. Ahmad, A., and Ahmad, A. (2009). “Islamic microfinance: the evidence from Australia,” Humanomics: The International Journal of Systems and Ethics, (Scopus indexed), 25(3), pp.217-235.

4. Ahmad, A., and Hassan, K. (2007). “Riba and Islamic banking, Journal of Islamic Economics, Banking and Finance,” 3(1), pp.9-42.

5. Ahmad, A. and Hassan, K. (2007). “Regulation and performance of Islamic banking in Bangladesh,” Thunderbird International Business Review, (Scopus indexed), 49(2), pp.251-277.


GRANT DETAILS

Honors/Awards

Scholarship:

2006: Postgraduate Research Award Scholarship. Undertake the degree of Doctor of Philosophy at University of Western Sydney

1984: Undergraduate Scholarship Award. Undertake Lissans in Sharī‘ah at the Islamic University of Madinah.

Research Awards:

2015: Universiti Brunei Darussalam Conference Grant (BND5,000) Sakarya University in Sakarya, Turkey

2014: International Sharīʿah Research Academy for Islamic Finance Conference Grant (RM30,000), Harvard University in Cambridge, USA

2014: International Sharīʿah Research Academy for Islamic Finance Conference Grant (RM10,000) for paper presentation. The 6th IFSB Seminar on Legal Issues in the Islamic Financial Services Industry in Brunei Darussalam

2013: IRTI and IIUM Best Paper Presentation Award (MR2000) in Islamic finance stream at the 2nd International Conference on Islamic Economics & Economies of the OIC Countries in Kuala Lumpur, Malaysia

2012: Best Teacher Award (AED4000), Hamdan Bin Mohammed Smart University in Dubai, UAE

2011: Hamdan Bin Mohammed Smart University Conference Grant (AED8000) for paper presentation. ICBFP`2011 in Famagusta

2005: University of Western Sydney Conference Scholarship (AUD5000) under Higher Degree Research Support Scheme Global. Finance Conference, Trinity College, Dublin.

2004: University of Western Sydney Postgraduate Research Grant (AUD3000). Harvard University in Cambridge


RESEARCH OUTPUTS (PATENTS, SOFTWARE, PUBLICATIONS, PRODUCTS)

I have immensely contributed to the areas of my specialization in Islamic banking and finance. I have authored many books and monographs, such as Theory and Practice of Modern Islamic Finance: The Case Analysis from Australia. Florida: BrownWalker Press, p.322; Developments in Islamic Banking Practice: The Evidence from Bangladesh. Florida: Universal Publishers, p.228; and Principles and Practices of Islamic Microfinance for a Global Economy: The Case of Bangladesh, Saarbrucken: LAP LAMBERT Academic Publishing GmbH&Co., p.58. I have also authored the following book chapters: “Achieving sustainable economic development through Islamic microfinance and potential of proposed two tier mudarabah waqf business model”, in M. K. Hassan (ed.), Handbook of Empirical Research on Islam and Economic Life, Edward Elgar Publishing, pp.193–212; “Regulation, performance and future challenges of sukuk: the evidence from Asian markets,” in Mutum, D. et. al (eds.), Advances in Islamic finance, Marketing and Management: an Asian Perspective, Emerald Group Publishing Limited, Bingley, United Kingdom, pp.27-48; “The nature of Retakaful: risk sharing or transferring risks?”, in M. N. Ali and S. Nissar (eds.). Takaful and Islamic cooperative finance, Edward Elgar Publishing, pp.171-191; “Islamic insurance: a cooperative model”, in E. A. Alim et al, eds. Islamic Commercial Law Report 2016. Kuala Lumpur, Dubai: International Sharī‘ah Research Academy for Islamic Finance (ISRA), Thomson Reuters, pp.90-92; “Dispute resolution in Islamic finance: a case analysis of Malaysia,” in H.A. El-Karanshawi et al, eds. Ethics, governance and regulation in Islamic finance. Doha: Bloomsbury Qatar Foundation, pp.125-135; “Developments in Islamic Finance Practice: The Experience of Australia,” in M.K. Hassan, and H.M. Mahlknecht, eds. Islamic capital markets: products and strategies. London: John Wiley & Sons Ltd, pp.341-356; “Islamic financial products: salient features,” in, Dubai Exports and Zawya (ed.) The UAE Islamic Financial Services Directory 2011; and “Islamic micro and medium sized enterprises (MMEs) finance: the case study of Australia,” in M. Obaidullah, and H.S. Abdul Latif, eds. Islamic Finance for Micro and Medium Enterprises. Jeddah: Islamic Research Training Institute, and Brunei: Universiti Brunei Darussalam, pp.240-264.

Besides, I have more than 60 published refereed journal articles and refereed conference proceedings to my credit. I have also presented a significant number of research papers at numerous international academic and professional forums around the globe.

Apart from the above mentioned research contributions, I have also developed and restructured course outlines and contents of the following course modules at different universities.

At Universiti Brunei Darussalam, Brunei

Master of Islamic Finance modules:
BI-5302 Legal Issues in Islamic Finance
BI-5105 Islamic Transaction
BI-5101 Islamic Jurisprudence

Bachelor of Finance modules:
BA-2301 Principles Islamic Jurisprudence

At Hamdan Bin Mohammed Smart University (HBMSU), Dubai

Master of Islamic Banking and Finance Programme:
MIB119SEC102 Islamic Economics
MIB119UF202 Usul Fiqh and Qawaid Fiqhiyyah
MIB119UF202 Islamic Banking
MIB119LRB302 Legal and Regulatory Issues in Islamic Banking and Finance
MIB119SCG304 Islamic Corporate Governance
MIB119SFN103 Principles of Islamic Finance
MIB119SLC104 Islamic Financial Contracts and Products Development
MIB119SPM203 Islamic Financial Markets and Institutions


CONSULTANCY

I have recently been appointed as Honorary 'Sharī‘ah Audit Executive' of Islamic Bank of Australia, the first Australian owned fully functional Islamic bank project in Australia under the Islamic Financial Services Australia (IFSA).

My consultancy also includes the following, among others.

Journals' Editorial Advisory Board Member

2017 - Present: Journal of Islamic Law and Judiciary, Bangladesh
2016 - Present: Shirkah Journal of Economics and Business, Indonesia
2014 - Present: International Journal of Islamic Thoughts, Bangladesh
2014 - Present: Journal of Islamic Economics, Banking and Finance, Bangladesh
2010 – Present: Humanomics: The International Journal of System and Ethics, UK (Scopus)
2010 – Present: Journal of Islamic Accounting and Business Research, UK (Scopus)
2009 – Present: International Journal of Islamic and Middle Eastern Finance and Management, UK (Scopus)
2009 – Present: The Open Law Journal, USA
2008 – Present: Global Islamic Finance Magazine, UK

Ad Hoc Reviewer for Peer Reviewed Refereed Journals

2016 - Journal of King Abdulaziz University: Islamic Economics (Scopus)
2015 - Present: Deakin Law Review, Australia (ABDC)
2010 – Present: University of New South Wales Law Journal, Australia (ABDC)
2009 – Present: Islamic Economic Studies, Saudi Arabia
2009 – Present: Review of Islamic Economics, UK
2009 – Present: African Journal of Business Management, South Africa
2008 – Present: American Journal of Islamic Social Sciences, USA
2007 – Present: Thunderbird International Business Review, USA (Scopus)


Industry, Institute, or Organisation Collaboration

I have active collaboration with Islamic finance industry since 1997. I have been invited as speaker by Islamic Research and Training Institute (IRTI) of Islamic Development Bank (IsDB), Jeddah at many international conferences held in Brunei, Bangladesh, Malaysia, Sudan, Nigeria, Qatar, Saudi Arabia and Indonesia. I have also been invited by Islamic Financial Services Board as keynote speaker at the 6th IFSB Seminar on Legal Issues in the Islamic Financial Services Industry held in Brunei in 2014. I have also been engaged by International Sharī‘ah Research Academy for Islamic Finance (ISRA), Khazanah Nasional, and Securities Commission (SC) Malaysia as coordinator and contributing author of 2 chapters in a publication entitled 'A Textbook on Sukuk' signed to be published in 2017.


SOCIAL, ECONOMIC, or ACADEMIC BENEFITS

I have gained plethora of experience in meaningful community engagement and partnership initiatives beginning from my work as Executive Director of an NGO in Bangladesh, an ongoing Advisor of Bangladesh community organisation (Bangladesh Islamic Center Inc.) living in Sydney and my current role as Advisory Board Chairman of 2 community welfare organisations in Sydney, namely the Australian Muslim Welfare Center Inc. and Islamic Cooperative Finance Australia Limited. Besides, I have championed Islamic finance in Australia. My research on the subject is the first landmark contribution to Australian Islamic finance in terms of its regulation and the Sharī‘ah compliance of its current practice. Given the recommendations I have made in my groundbreaking work on Theory and practice of modern Islamic finance: The case analysis from Australia, the Australian government is now taking serious steps to promote Islamic finance as an opportunity for Australia to access offshore capital pools from the Middle East and Asia to finance domestic investment needs. In response to Dr Ahmad's recommendations, Australia is now also planning legislative changes to provide a level playing field for Islamic finance products. His contributions have greatly helped nurture Islamic finance in Australia.

In recognition of my reputation and contribution to research in the Australian Islamic finance industry, I was approached by the NSW Department of Premier and Cabinet to help introduce laws in Australia in order to create a level playing field for Islamic and non-Islamic finance. Along with many others in this field, my pioneering efforts during the last 20 years have resulted in wider acceptance for Islamic finance and it is hoped that the relevant regulatory bodies in Australia will introduce independent Islamic finance regulations in the near future.