What People Are Saying
“The best thing about Ethica Institute is that it makes AAOIFI standards accessible to everyone who is eager to learn. Their ever-evolving web-based training material and rigorous certification process has the potential to promote AAOIFI's standards throughout the world by simply training and certifying multitudes of Islamic finance professionals from the comforts of their homes and offices.”
Liaquat Ali MBA, CIFE™, Founder TrulyInterestFree.com "This is a timely and much needed development in the industry. Qualified human capital is the most critical need for the industry to maintain its growth trajectory across geographies. Such solutions will go a long way in providing systematic tools for practitioners.”
Afaq Khan CEO, Standard Chartered - Saadiq, Dubai “I have reviewed these online sessions and I am very impressed with what I see. They provide a solid foundation that is fundamental to fully understanding Islamic finance.”
Professor Walid Hejazi Rotman School of Management, University of Toronto "Ethica Institute of Islamic Finance fills a gap by providing a platform for cost-effective training and development, reliable certification, and a forum for those interested in Islamic finance to interact.”
Mehdi A. Zaidi Chief Program Officer, Noor Islamic Bank, Dubai "If you are seeking a solid, Shariah-grounded Islamic finance training program, I would unhesitatingly recommend Ethica Institute of Islamic Finance over anyone else.”
Faraz Rabbani Researcher and Expert in Islamic Law, StraightWay Ethical Advisory "In the current environment, a clear, comprehensive and trustworthy resource on Islamic finance is priceless. Ethica Institute of Islamic Finance sets a high benchmark indeed. In an era characterized by moral confusion, it is also reassuring to know that there remain entrepreneurs aiming for a higher purpose. I sincerely hope that more people discover and use this resource in the future.”
Renaud H. Samyn Vice President, Capital Research Company, Hong Kong "Considering the rapid growth of Islamic finance, it was surprising to see a relative dearth of online resources – especially for training. Ethica Institute of Islamic Finance now fills that void. Their innovative and interactive training methods will contribute towards the development of Islamic finance and will ensure that people in positions of responsibility are suitably qualified and trained by recognized experts.”
Haris Zuberi Student, Karachi, Pakistan "Ethica’s innovative methodology brings Islamic finance training right to your personal computer. Thank you for your commitment to educating practitioners in Islam's best kept secret and the solution to today's financial woes.”
Mahmoud Qutub Manager, Bearing Point, Qatar "The modules make Islamic finance interesting, informative and most of all provide for a cost-effective, easily accessible, and highly efficient training across large-scale institutions and individuals. No more is Islamic finance relegated to costly conferences in plush hotels or to be delivered by trainers whose daily charges prohibit the everyday person from benefiting. Islamic finance was and is an industry driven by the vision of the everyday man who wants an alternative to the injustices of modern finance. Just as we had begun to fear that the caravan of Islamic Finance had begun to go astray, Ethica Institute of Islamic Finance appears and promises to realign its direction with its ideals.”
Yusuf Jha Sharia Controller, Abu Dhabi Islamic Bank, UAE Read More Testimonials
Understanding Islamic Finance
Why Islamic Finance?
(24:35)
What makes Islamic finance different from conventional finance? And what makes it better? We look at 3 real-world examples and find out. We also introduce you to the 4 principles that guide Islamic finance transactions. At the end, we tell you a little bit about EthicaInstitute.com.
Understanding Musharakah I
Islamic Business Partnerships (21:10)
You’ve heard of joint-stock companies. Now learn about the Islamic variation. We look at Musharakah, the Islamic business partnership where partners pool together capital, expertise or goodwill to conduct business or trade. We look at the basic features of a Musharakah and its types, their mode of operation, duration and the various forms of capital contribution.
Understanding Musharakah III And Quiz
Islamic Business Partnerships (19:17)
We complete our discussion on general aspects of Musharakah, including how banks handle negligence, termination, and constructive liquidation. We round our discussion with some practical examples of Musharakah calculation, a quick review of financial statements and how exactly profit gets calculated.
Understanding Mudarabah I
Islamic Investment Partnerships (21:16)
Where Islamic banks meet conventional private equity type investing. Here you learn Mudarabahs, the Islamic business partnership where one partner supplies capital for the business and the other provides management expertise. We explain the Mudarabah structure and contrast it with Musharakah and Wakalah, explaining how they differ in banking practice.
Understanding Mudarabah II
Islamic Investment Partnerships (22:00)
How is an investment partnership different from an agency contract? We discuss the relative merits of the Mudarabah and the Wakalah structure in different situations. We also describe the Mudarib’s role, the duration of Mudarabahs and the forms of capital contribution by the investor and in some cases even the Mudarib.
Understanding Ijarah I
Islamic Leasing (22:33)
What’s an Islamic lease? This modules helps you find out. We introduce Ijarah, the Islamic lease, and look at pre-requisites for their execution, legal title, possession, maintenance, earnest money, default, and insurance. We begin answering the question “How does an Ijarah work?” with step-by-step practical explanations.
Understanding Murabaha I
Cost Plus Financing (21:43)
Learn about the most widely used Islamic finance product: buy an asset for the customer; sell the asset at a premium in installments to the customer. That’s a Murabaha. In these modules we introduce Murabahas and walk you through the first 5 of the 7 important steps necessary for a Murabaha’s valid execution.
Understanding Murabaha II
Cost Plus Financing (17:39)
Wrap up the 7 steps to executing a Murabaha: we cover steps 6 and 7 and go on to discuss common mistakes bankers make when executing Murabahas and how to avoid them. We also look at risk management, default, early repayment, and profit calculation in Murabahas.
Understanding Islamic Insurance And Quiz
(18:12)
You learn the difference between Islamic and conventional insurance and the essentials that make Islamic insurance unique. You walk through a numerical example before taking the Self-Assessment Quiz.
Islamic Financial Innovation
Liquidity Management In Islamic Finance I
(18:21)
What do Islamic banks do with excess capital in the short-term? How do they access capital for the long-term? You learn the answers to these and other questions in this module. We discuss how Islamic banks manage liquidity and begin by explaining an inter-bank Mudarabah, walking you through how a weightage table works; useful information for other Islamic banking products. We close the module with a look at the application of Sukuk in liquidity management.
Liquidity Management In Islamic Finance II And Quiz
(18:06)
You look at filters for stocks, shares, Musharakah investment pools, and the use of agency contracts to manage liquidity. We also look at local and the foreign currency Commodity Murabahas and walk you through the steps for executing each.
Risk Management In Islamic Finance I
(18:50)
Some have said “Banking is risk management.” If you don’t know anything about risk management this is the module for you. You learn the basics about risk management in Islamic finance and discuss the most common risks facing Islamic banks and the mitigation techniques used to address them.
Risk Management In Islamic Finance II And Quiz
(23:01)
Now you learn about how risk relates to each specific Islamic finance product. We go through each major Islamic banking product, namely Murabaha, Salam, Istisna, Ijarah, Musharakah and Mudarabah, and explain the specific risks associated with each.
At The Bank: How To Perform Calculations
How To Calculate An Ijarah Schedule I
(16:32)
How do Islamic banks calculate leases? In these two modules you find out. We hold your hand through calculations, tables, and formulas and show you how to calculate rent in an Ijarah; how to calculate IRR; how to calculate profit; and how to account under IAS 17. It’s all here.
How To Calculate An Ijarah Schedule II And Quiz
(12:46)
You continue learning about Islamic leases with practical information about depreciation and floating-rate profits. We wrap it up with a look at what happens when things go wrong: defaults, late deliveries, early termination, asset defects, and negligence.
How To Calculate A Diminishing Musharakah Schedule And Quiz (20:34)
Safe and simple. Diminishing Musharakah is one of the best ways to finance property. We show you how an Islamic bank and a client co-own a house by taking you step-by-step through a redemption schedule. This is the module where you learn what makes an equity-based Islamic home financing operationally different from a conventional interest-based mortgage.
How To Structure Mudarabah Deposit Accounts I
(13:25)
How do Islamic bankers provide their customers with profit-paying deposit accounts? Here we explain how. Beginning with the basics, we quickly get right into it with a step-by-step explanation of how weightages work. This module lays the foundation for later, more advanced training modules on structuring Mudarabah-based deposit accounts.
How To Structure Mudarabah Deposit Accounts II And Quiz (12:35)
We continue from the previous module with step-by-step calculations of how banks use weightages to manage investor flux. Why do some investors get paid higher profits and others lower profits? Why do banks get paid the highest profit? And how do we calculate profits once the weightages are set? We learn the answers to these and other questions as the foundation for yet more modules on managing depositors at Islamic banks.
How To Perform Murabaha Calculations And Quiz (19:49)
You know the theory behind Murabahas. But now you want to see how they work in practice. Look no further. This is the module you’ve been waiting for your whole life. We show you how to compute collection periods, inventory days, operating cycles, limits, profit, and price. And you thought you had to wait until your boss explained it to you. Important Note: The astronomical numbers thrown into the examples are meant to inspire our members to greatness.
Asset Pool Management In Islamic Finance I (13:37)
Islamic banks use a number of techniques to manage funds. The asset pool manager first needs to know how to manage deposits, inter-bank investments, and equity investments. Understanding these categories forms the basis for the second part which goes into detail about investment pool management.
Asset Pool Management In Islamic Finance II And Quiz (11:09)
We now continue with the practical tools bankers use in asset pool management. Having already looked at pool identification and fund tracking and utilization, we now discuss pool composition, transfer and return mechanisms, income calculation, profit sharing ratios, and profit distribution. An example and a quiz serve to strengthen your understanding at the end.
Profit Calculation Framework For Deposit Products And Quiz (16:35)
With thousands of clients constantly depositing into and withdrawing from their accounts, how do Islamic banks manage to calculate profit? We not only show you how, but we also go into detail about each of the 3 methods banks use to calculate profit and which method is most recommended. And to keep you on your toes, there’s a quiz at the end with plenty of numerical calculations.
Case Studies: In The Real World
Sukuk Case Study I:
How To Prepare Sukuk Documentation
(11:44)
After one leading Islamic finance scholar commented that as many as 80% of all Sukuks were not complying with AAOIFI standards, the industry was abuzz with speculations about what actually makes a Sukuk AAOIFI-compliant. Here we show you. In this case study, we do a side-by-side comparison of 2 real-world Sukuks, one that is AAOIFI-compliant and one that is not. This first module focuses on Sukuk documentation.
Sukuk Case Study II:
The Nakheel Development Sukuk And The Aldar Properties Sukuk
(17:21)
Now for the side-by-side comparison. We look at Nakheel’s Sukuk, which is AAOIFI-compliant, and compare it with Aldar’s Sukuk, which is not. At a time when the industry is careful to ensure that it attracts the broadest range of Sukuk investors, AAOIFI-compliance is paramount. And people who can spot the difference between a Sukuk that is compliant and one that is not become that much more valuable to the industry.
With The Client: How To Answer Client Questions
Islamic Accounting Standards
Understanding Islamic Accounting I
(17:12)
What is so Islamic about accounting for Islamic banks? In this track you find out. Great for newcomers and advanced students alike, knowing how the mechanics of Islamic accounting works helps you truly understand Islamic banking in general much better. We assume you have a very basic understanding of accounting and, beginning with this introductory module, you learn about the objectives of financial accounting for Islamic financial institutions. From there we begin on the good stuff: how Islamic accounting differs from conventional accounting, which begins with a description of the major financial statements.
Understanding Islamic Accounting II
(18:40)
We continue with the financial statements before explaining the concepts of going-concern, periodicity, and accounting recognition. We then get right into it with a practical explanation of the actual products with a close look at how accounting for them differs in Islamic finance, beginning with Murabaha.
Understanding Islamic Accounting III
(16:31)
Now we get to the good part (accountants, we share your excitement). How do we account for products in the real world? We begin with Murabaha. After wrapping up an explanation of early settlement, client insolvency, and earnest money, we get right into it with case studies describing various profit and cost repayment structures.
Understanding Islamic Accounting IV
(14:32)
We wrap up Murabaha with another case study before shifting into Musharakah accounting treatment. With Musharakahs, we look at the recognition and measurement of capital as well as the recognition and measurement of profit and loss.
Understanding Islamic Accounting V
(14:30)
With Murabaha and Musharakah accounting basics under our belt, we look at Mudarabah, which varies a little bit from Musharakah accounting, and then to one of the most common forms of Islamic financing: Ijarah leasing. We start off with a look at the bank as the lessor and as the lessee. Pay close attention to this module because Ijarah accounting is regularly used in a variety of retail and corporate products.
Understanding Islamic Accounting VI
(17:18)
We now delve deep into the reporting guidelines for an Ijarah Muntahiya bi Tamleek, looking at the bank as the lessor; an asset sale to the lessee before, after, and gradually; and an asset to the bank as a gift or a sale.
Understanding Islamic Accounting VII
(23:20)
This might be a good time to go back and do a quick review of Salam and
Istisna in one of the introductory modules. You will recall that Salam and
Istisna are sale-based structures that deal primarily in fungible
commodities and manufactured goods, respectively. Here we learn how to
account for them.
Understanding Islamic Accounting VIII
(9:41)
One of the most critical topics in any study of accounting, accounting for
provisions and reserves is equally important in Islamic finance. Here we
look at presentation and disclosure requirements for provisions as well as
the measurement and presentation of profit equalization and investment risk
reserves.
Understanding Islamic Accounting IX
(19:57)
Individuals are not the only ones who pay zakah: so do companies. In this
module we explain accounting for zakah. We also describe the accounting
treatment of different types of investment funds (i.e. equity, lease,
commodity, mixed) before concluding with a self-assessment quiz. Given the
breadth and depth of topics in the accounting track of modules, you will
benefit from a thorough review of all the modules before attempting the
Advanced CIFE™ in Accounting certification examination.
Sample Islamic Finance Contracts
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