СС 43 – Несостоятельность

This Standard aims to describe the rules of insolvency and the circumstances that precede it, whether they are faced by the institutions, companies or individuals, both businessmen and non-businessmen, with whom financial institutions deal.

The word (Institution/Institutions) is used here to refer, in short, to Islamic financial institutions including Islamic Banks.

Scope of the Standard

This Standard covers the Shari’ah rules relating to the causes and consequences of insolvency, whether faced by an institution or its institutional or individual business and non-business customers. It also addresses the judicial declaration of insolvency over an institution and its consequences, and in particular, the sale of its assets, the distribution of the proceeds among the creditors and how insolvency is revoked. It does not cover financial difficulties It does not cover financial difficulties (as defined by Islamic jurisprudence), (as defined by Islamic jurisprudence), liquidity shortfalls or delays in payment that do not lead to a declaration of insolvency. 2. Definitions of Insolvency and the Declaration of Insolvency Insolvency (Iflas): When the debt due of a person exceeds his assets. Declaration of insolvency (Taflees): A judge’s declaration that a debtor is insolvent, preventing him from disposing of his assets.