Questions 1. For each case study separately, briefly explain which Shari'ah principles were violated in light of the observations raised by the Audit Department. Please also discuss the impact of such observations on the validity of the Ijarah contract. 2. Ijarah Rentals in floating rate Ijarah may vary during the Ijarah term, following the change in benchmark rate i.e. Karachi Interbank Offer Rate (KIBOR). a. What is the restriction that Islamic banks have to abide by in case of floating rate rentals? b. Why is this restriction in place? C. Using a specific example, explain how this specific restriction would be complied with by Islamic banks in a floating rate Ijarah. d. By requirement, the Ijarah rental for the first period needs to be specifically agreed by the Bank and its customer. Consequently, it is argued that Ijarah rental for subsequent periods cannot deviate significantly from the amount of rental agreed for the first period of the Ijarah term. What are your views on this? 3. In your opinion what are the other major Shari'ah compliance issues that have not been observed by the Shari'ah Audit Team in each case study? List all such issues for each case study separately and justify your reason for considering them as Shariah issues. 4. Why do you think an Islamic bank would require a security deposit from its customer? When would the Islamic bank need to utilize this security deposit? Why do you think the security deposit is converted into advance rentals? 5. In Case #2, what are the possible treatments of advance rentals parked with Ace Islamic Bank during the time of Takaful claim process? 6. In Case #2, in case it is determined that the Ijarah asset had been destroyed, damaged or stolen due to the negligence of the customer, what would happen to the Takaful claim? What would the treatment of the advance rentals parked with the bank be? 7. Differentiate between Undertaking to Purchase And Undertaking to Lease