Financial Crisis: An Islamic Perspective
11- Mar2020
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Financial Crisis: An Islamic Perspective

The Holy Qur’an says:

“so that it may not circulate only between the rich among you.” (59:7)

Mufti Taqi Usmani in his address to the World Economic Forum at Davos 2010, presented a paper, titled “Post-Crisis Reforms: Some Points to Ponder”, referring to the 2007-2008 financial crises that shook the world , in which he highlighted that, “One of the basic principles emphasized by the Holy Qur’an about the objectives of an economic system is that wealth produced in a society must be distributed in a just and fair manner, so that it may not be concentrated in the hands of a few people.

This is the very nature of a debt-based economy. The rich becomes richer and the poor poorer as the above verse highlights. The debt based economic system is based on riba (interest), which unjustly transfers complete risk to the borrower.

One of the lessons that we learn from the epitome of financial crises that took place in 2007-2008 is the element of risk transfer which created a domino effect and affected many with its swift. But do we really understand what risk transfer is and how did it lead to a financial crisis?

By definition, risk transfer when one party completely transfers the risk to another party. In the case of the financial crises, the following is what took place:

All risk was transferred from the financial institutions to the borrower and as the borrowers were mostly subprime in nature it led to defaults of loan and brought the entire financial system down. It started off in the United States and then affected the Asian Markets also such as China, Hongkong, Japan, India and so on.

Subprime lending is lending to those individuals who lack the financial stability to ensure timely repayment of installments. Siddiqi (2008) further adheres to this and says that the root cause of economic crises was ‘a moral failure that leads to exploitation and corruption’. The financial institutions failed ethically, in their eagerness to earn more riba (interest) they resorted to subprime lending.  Chapra (2008) further attributes that lack of profit-loss sharing (equity-based system) modes of financing led to the crises.

As suggested by Shaykh Muhammad Taqi Usmani, in the same paper, a viable solution to counter this unfair system is to restructure the entire financial system and move away from the current risk transfer system (debt-based) towards a risk sharing system (equity-based).

20- Jan2020
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Blockchain: Application & Opportunities for Islamic Financial Industry

IBA CEIF in collaboration with Usmani & Co, is pleased to announce a Product Development and Shariah Compliance Forum session on “Blockchain: Application & Opportunities for Islamic Financial Industry” by Sharjil Ahmed.

For free registrations please visit:

#islamicfinance #islamicbanking #usmaniandco #iba #blockchain #education #CEIF #UsmaniCo #Workshop #IBACEIF

Press Release: Islamic Finance and Food Security: Connecting Russia and Muslim Countries
30- Oct2019
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Press Release: Islamic Finance and Food Security: Connecting Russia and Muslim Countries

Usmani & Co (UCO) is proud to be part of this project as Shariah advisors for the betterment of the greater good.

On 3 November 2019, the HSE-Skolkovo Institute for Law and Development will hold the special session and present the Agrofinmost project at the 14th international AAOIFI-World Bank conference on Islamic banking.   

The aim of the special event is to look at food security governance in Middle Eastern countries; to highlight those elements of international trade in commodities, which are in conflict with Shari’ah principles; and to offer a practical solution in the form of sustainable models in compliance with Shari’ah. 

The session will bring together experts from Russia, which is the world’s largest wheat exporter (in 2018/2019), Shari’ah scholars, and international community to discuss how Islamic finance instruments can be used to change the situation in the international food commodity markets for the better, how to reach sustainability and transparency and to avoid the influence of the speculative financial capital on food trade.

The event will be chaired by the member of the Agrofinmost project board Mufti Muhammad Taqi Usmani, the most authoritative scholar of our time in the field of Islamic economics and finance, as well as in other areas of Islamic erudition. He leads the Sharia councils of a number of major Islamic banks and ranks first in “The Muslim 500”.

The session will also feature the following speakers and commentators:

Sheikh Nizam Yaqouby, member, AAOIFI Shari’ah board

Dr. Ikbal Daredia, Advisor to CEO, Islamic Corporation for the Development of the Private Sector (ICD), IDB

Mr. Erlan Baidaulet, Director General, Islamic Organization for the Food Security

Dr. Imran Ashraf Usmani, Member, Board of Jamia Darul Uloom University, Karachi, Pakistan

Mr. Ijlal Alvi, CEO IIFM

Mr. Andrey Bezrukov, President of the Association for Technology Sovereignty

Mr. Ivan Starikov, Lead Research Fellow of Russian Academy of Science

Mr. Haydar Kamaletdinov, Vice-President, International Association of Islamic Business

Mr. Rudik Iskuzhin, Expert in Middle East affairs, ex-Member of the Federation Council of the Federal Assembly of the Russian Federation

Dr. Alexander Kudelya, Head of Grain Export and Port Elevator Projects of the Afanasy Nikitin Association

Prof. Alexey Ivanov, Director, HSE-Skolkovo Institute for Law and Development; Associate Professor of Law; Academic Supervisor of the Agrofinmost Project, Higher School of Economics University, Russia

Dr. Madina Kalimullina, senior researcher, HSE-Skolkovo Institute for Law and Development, Higher School of Economics University, Russia

Mr. Mikhail (Shamil) Orlov, Chairman of the Russian – Egyptian Business Council, Board Member of the Agrofinmost project

Dr. Kirill Molodyko, associate professor, senior researcher, HSE-Skolkovo Institute for Law and Development, Higher School of Economics University, Russia

“The Agrofinmost project will set up an organizational and legal platform to attract Islamic investment in the Russian agri-food sector in accordance with Islamic law (fiqh) structures. The key feature of such a financing model, which distinguishes it from the usual speculative models, is its focus on building long-term partnership in implementing socially beneficial projects, rather than seeking short-term interest gains,” says Alexey Ivanov, Director of the HSE-Skolkovo Institute for Law and Development. “Not only did we devise mechanisms for long-term partnership in the supply of Russian agricultural produce to Middle East countries, which are based on principles that make sense even to the most conservative of Islamic investors, but also took into account the growing needs of these countries in ensuring food security of the region. 

Dr. Imran Ashraf Usmani, “Usmani & Co (UCO) is a leading global Shariah advisory firm Chaired by Justice Sheikh Mufti Muhammad Taqi Usmani who is a leading scholar of our time and regarded as an expert in the fields of Hadith, Islamic jurisprudence and Islamic economics & finance. UCO is headed by his son and renowned Shariah scholar Mufti Muhammad Imran Ashraf Usmani with a vision to establish a shariah compliant economy which offers freedom to humanity from the shackles of interest based debt financing system. Agrofinmost is an innovative project which aligns with the Islamic principle of fairness, transparency, food security and availability for the mankind. It’s a thoughtful initiative which connects Russia and Middle East through agricultural trade using Islamic finance and investments. We at UCO are proud to be part of this project as Shariah advisors for the betterment of the greater good.”

Mr Omar Mustafa Ansari, Secretary General of AAOIFI, “The 14th AAOIFI – World Bank Conference is pleased to host the special event in coordination with HSE-Skolkovo Institute for Law and Development in the Kingdom of Bahrain. The project is based on the underlying Islamic principles of just and fair system in terms of agricultural output and food security. The event is set to attract key stakeholders from around the world and AAOIFI looks forward to welcome everyone.” (


Global commodity trade remains one of the last havens of pure financial capitalism with its sole focus on higher returns on investments and total negligence of the human condition and sustainability concerns. The Agrofinmost project offers practical solutions to establish fair market prices for agricultural products, which as a result could provide food security in Middle Eastern countries, on the one hand, and fair international trade without speculations based on Islamic legal principles, on the other. The project aims to attract Islamic investments into the Russian agricultural sector using Shari’ah-compliant financial instruments and make a meaningful contribution to food security of importing countries by setting up a stable and reliable channel for Russian agricultural supplies.

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The HSE-Skolkovo Institute for Law and Development is a research unit of the HSE that arose in 2014 as a result of the intellectual and resource cooperation of the HSE and the Skolkovo Foundation. Among the latest research projects commissioned by state authorities and international organizations there are proposals for adapting the institution of intellectual property to the needs of the new economy, antitrust reform for the digital economy, development of the legal aspects of the implementation of distributed registry technologies and artificial intelligence technologies, the legal concerns for the regulation of biotechnology, food security, and other pressing issues at the intersection of law, economics, and technology.


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Usmani & Co is a globally well-reputed Shariah advisory Firm, committed to offering comprehensive advisory services by leveraging on its global presence, integrated structure, and internationally recognized award-winning Scholars. Usmani & Co. is unique to have proven expertise to offer customised solutions, with multi-disciplinary, multi-linguistic and globally present strategic partners.”

AAOIFI, established in 1991 and based in Bahrain, is the leading international not-for-profit organization primarily responsible for development and issuance of standards for the global Islamic finance industry. It has a total of 110 standards and technical pronouncements in issue in the areas of Shari’ah, accounting, auditing, ethics and governance for international Islamic finance. It is supported by over 200 institutional members, including central banks and regulatory authorities, financial institutions, accounting and auditing firms, and legal firms, from over 45 countries. Its standards and technical pronouncements are currently followed by all the leading Islamic financial institutions across the world and have introduced a progressive degree of harmonization of international Islamic finance practices. 

For more information on AAOIFI its activities, please contact: 

Mr. Rizwan Malik, Senior Manager, Standards Development and Strategic Developments, AAOIFI, Office: +973 – 17375418; e-mail: