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Islamic Finance Briefing - Categorized | Capital Market (Equity, Mutual Funds), Emerging Trends, Investment more

Shariah finance doesn’t need more equity on assets

Posted on 03 May 2010

From Gulf-times.com: To promote equity instruments such as mudaraba and musharaka as ‘ideal’ modes of financing in Islamic finance seems to ignore the lessons of Transactions Cost Economics that equity requires costly monitoring.
Moreover, in current applications and fiqh interpretations of mudaraba, the investor (rabb ul mall) does not have the monitoring or governance rights that would be appropriate for an equity investor. ……………………………………..Full Article: Source

 
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Laxman - who has written 19163 posts on Opalesque Islamic Finance Briefing.


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