How does Wakala work?

A wakala is a structure that utilizes the idea of principal and agent theory. The principal provides the capital, and the agent gets hired to provide expertise and labor. Under a wakala, the capital provider receives the profits from the venture, less an agreed-upon fee that goes to pay the agent.

What is Ijarah securitization?

12. 12 Securitization of Ijarah Ijarah certificate Represents the holder’s proportionate ownership in the leased asset. 14 Securitization of Ijarah Essential Condition “It is essential that the Ijarah certificates are designed to represent real ownership of the leased assets, and not only a right to receive rent.”

What is the process of securitization?

Definition: Securitization is the method of converting the receivables of the financial institutions, i.e., loans and advances, into bonds which are then sold to the investors. In simple terms, it is the means of turning the illiquid assets into liquid assets to free up the blocked capital.

What is securitization of loans?

Securitization is the process in which certain types of assets are pooled so that they can be repackaged into interest-bearing securities. The interest and principal payments from the assets are passed through to the purchasers of the securities.

What’s the meaning of Wakala?

protection, delegation, or authorization
Summary. Wakalah literally means protection, delegation, or authorization. Legally, wakalah refers to a contract in which a person who has complete legal capacity authorizes another to conclude a certain well-defined permissible contract on behalf of that person.

What Wakala means?

The literal meaning of a “wakala” is an agency or a delegated authority where the muwakkil (principal) appoints the wakil (agent) to carry out a specific job on behalf of the muwakkil.

What is difference between istisna and Salam mode of financing?

Istisna’a is mainly used in the fields of manufacturing (both small scale and large scale), construction, Build, Operate and Transfer (BOT), etc. However, salam is mostly confined to the trading of commodities, particularly those that require from the seller (al-muslam ileihi) no additions or alterations.

What does Ijarah mean?

Ijarah, (Arabic: الإجارة‎, al-Ijārah, “to give something on rent” or “providing services and goods temporarily for a wage” (a noun, not a verb)), is a term of fiqh (Islamic jurisprudence) and product in Islamic banking and finance.

What is securitization with example?

Securitization is the process of taking an illiquid asset or group of assets and, through financial engineering, transforming it (or them) into a security. A typical example of securitization is a mortgage-backed security (MBS), a type of asset-backed security that is secured by a collection of mortgages.

What are types of securitization?

Common Securitized Debt Instruments

  • Mortgage-backed Securities (MBS) Mortgage-backed securities (MBS) are bonds that are secured by homes or real estate loans.
  • Asset-backed Securities (ABS) Asset-backed securities (ABS)

What is meaning of Kafalah?

Summary. Legally, kafalah means the joining of one obligation to another with regard to the settlement of a claim. In kafalah, a person joins another in undertaking a certain obligation. Consequently, both persons become jointly liable for the settlement of the same obligation.

How does the securitisation of the Islamic State affect Europe?

The group has been presented as a threat to the security of the state, to the security of individuals in Western Europe and more broadly as a threat to the Western way of life. This means that the securitisation of the Islamic State group affects at least three sectors: the societal, the military and the political.

What’s the difference between sukuk and securitization?

Securitization and Sukuk In the modern Islamic perspective, sukuk lies in the concept of asset monetization – or also called securitisation – that is achieved through the process of issuance of sukuk. Its great potential is in transforming an asset’s future cash flow into present cash flow.

How does Securitisation Theory challenge traditional approaches to IR?

Securitisation theory challenges traditional approaches to security in IR and asserts that issues are not essentially threatening in themselves; rather, it is by referring to them as ‘security’ issues that they become security problems. The basics of securitisation theory

What is the Securitisation Theory of international relations?

Securitisation theory challenges traditional approaches to security in IR and asserts that issues are not essentially threatening in themselves; rather, it is by referring to them as ‘security’ issues that they become security problems. The end of the Cold War sparked a debate over ideas of security in IR between ‘narrowers’ and ‘wideners’.