316 AJBMR • Doi Publications
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  • CONCEPTUAL AND STRUCTURAL DIFFERENCES BETWEEN CONVENTIONAL BONDS AND ISLAMIC SUKUK 
    ►Shams Ud Din

    ​     10.52283/NSWRCA.AJBMR.20160505A03
     
    ABSTRACT

    Often times, Sukuk securities are described similar to conventional bonds. The financial press and mass media name Sukuk as Islamic Bonds. Sukūk structures are designed based on the purpose and conditions of financing needs and are not (as in conventional borrowing) general purpose borrowing. Therefore, sukūk is a financial instrument with complex characteristics. Considering conceptual characteristics and structural procedure of Sukuk, this paper investigates differences between conventional bonds and Islamic Sukuk. Moreover, the three instruments of the Sukuk contract (mushārakah, murābahah and ijārah) are carefully examined. This paper clarifies that Sukuk and conventional bonds are legally distinct and have different structures.
    Keywords: Sukuk, Conventional Bonds, Islamic Capital market, Interest-Based Borrowing.
     

    Pages:37-44 :: Download-View
 
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