By Arindam Saha, Ashoke Kumar Ganguli and Siddhartha Banerjee from TCS BaNCS Insurance

The past two decades saw the evolution of a number of Islamic-compliant insurance forms (including Takaful), however, most of them lost credence over time, while Takaful emerged as a significant and popular form.

Islamic scholars further agree that Takaful insurance, based on certain ‘tijari’ principles ensures that insurance contracts governed by Takaful are compliant to the principles of Al-Mudharabah or Al-Wakalah, which are the two main Islamic insurance business models. Takaful principles allow for the advancement of “a loan without interest” from the invested amount, “qurz-e-hasn”, to any one of the insured at the time of need.

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