Challenging Issues in Islamic Finance Products

With the passage of time and some other man-made factors, financial products both conventional and Islamic are becoming more complex.

Of the above, there are challenging issues to deal by Islamic finance practitioners, with full wisdom of theoretical and practical knowledge in the industry. Among them are:

• Benchmarking profit against rate such as LIBOR and KLIBOR
• Profit Equalization Reserve (PER)
• Sale with condition to buy back at a predetermined price
• Profit generated over installment payment
• Penalties on delayed payment
• Benchmarking sukuk against LIBOR
• Musharakah with purchase undertaking
• Ijarah sukuk with sale purchase agreement at par value and no mark-to-market
• Ijarah sukuk - ownership of SPV
• Profit rate swaps

Further details will be stipulated later.