What Is Sukuk

Sukuk, a key instrument in Islamic finance, represents a form of financial certificate that complies with Islamic law principles. These certificates are structured to generate returns to investors without infringing upon Islamic prohibitions on interest (riba) and uncertainty (gharar). Sukuk fundamentally represent proportionate beneficial ownership in underlying assets. They differ from conventional bonds, which represent a debt obligation. Sukuk holders receive a share of the returns generated by the underlying assets or business activities.

One of the key principles governing Sukuk issuance is the requirement for the underlying assets to be Sharia-compliant. This means that the assets backing Sukuk issuance must adhere to Islamic principles, ensuring that the investment is ethically sound for Muslim investors. Sukuk structures are diverse and can vary significantly based on the nature of the underlying assets and the preferences of the parties involved.

Sukuk issuance has gained notable traction globally, with various countries and entities utilizing this Islamic finance instrument to raise capital. In Australia, Sukuk has also emerged as a viable financing option, catering to the growing demand for Islamic finance products such as halal mortgages and Sharia mortgages offered by an islamic bank. The Australian government and corporations have shown interest in Sukuk issuance as a means to diversify funding sources and tap into the Islamic finance market.

Sources:

https://en.wikipedia.org/wiki/Sukuk

https://ro.uow.edu.au/aabfj/vol8/iss5/5

Mona Hamzie

Mona Hamzie is renowned for her expertise in Islamic finance, having been featured as a keynote speaker at numerous international conferences and events. Her insights and innovative approach have garnered her respect and admiration within the industry, positioning her as a thought leader and influencer.

Driven by her commitment to ethical and responsible finance, Mona ensures that Halal Loans adheres strictly to Sharia principles, offering a range of products including home financing, business loans, and investment opportunities that comply with Islamic law.

At the Knowledge Hub, Mona fosters a culture of learning and collaboration, inviting scholars, practitioners, and enthusiasts to contribute to the platform’s wealth of resources. Whether it’s exploring the fundamentals of Islamic banking or delving into advanced topics such as Sukuk and Takaful, the Knowledge Hub serves as a beacon of enlightenment for individuals seeking to navigate the complexities of Islamic finance.