Submitted to

Saquib Rahman (SQB)

Lecturer

Submitted by

MD. ASSADUZZAMAN SHAWON

ID: 1721216630
Sec: 03
 Sharia Law and its Aspects:

The name Quran derives from the word qara’a, which means ‘to read’. For Muslims, the Quran holy
Scriptures are proof of the prophecy of Mohammed, the most authoritative guide for Muslims and the first
source of the Sharia on which Sharia law is based. The code of law that elicits from the Quran and from
the teaching and example of Mohammad (SM) is so called Sharia law.It is the body of Islamic rules and
teachings that directs Muslims’ responsibilities and relationships withtheir families, society, and nation.
Sharia literally means "the clear, well-trodden path to water”. As a legal system, the Sharia law is
remarkably broad. The Sharia law regulates public behavior, private behavior, and even private beliefs.
Sharia law acts as a code for living that all Muslims should adhere to, including prayers, fasting and
donations to the poor. Its intention is to help Muslims to understand how they should lead every aspect of
their lives according to the order of Allah.

List of countries governed by Sharia law:

Different countries put on their understanding of Sharia’s to different degrees, both in terms of law and
enforcement. Furthermore, only a few claims to use it as the only source of law, whereas other countries
use it as one source of law amongst others. The Sharia law is also used in full or in part, nationally or
regionally in these countries below:

Afghanistan (89%) ** France* Lebanon Spain*

Algeria Gambia Malaysia (86%) ** Sudan
Austria* Germany* Maldives Sri Lanka
Bahrain Ghana Mauritania Syria
Bangladesh (82%) ** India Morocco (83%) ** Tanzania
Brunei Indonesia (72%) ** The Netherlands* Thailand (77%) **
Canada* Iran Nigeria Uganda
Comoros Iraq (91%) ** Oman United Arab Emirates
Djibouti (82%) ** Jordan (71%) ** Pakistan (84%) ** United States (USA)*
Egypt (74%) ** Kenya Qatar United Kingdom (UK)*
Eritrea Kuwait Saudi Arabia W. Bank & Gaza (89%) **
Ethiopia Libya Somalia Yemen
No other countries follow Sharia Law more strictly than Saudi Arabia. Regarding the Application of
Islamic Law, Muslims’ aspired Sharia state is the Saudi Arabia that has no legal code other than the
Sharia which is enforced strictly through its legislative authority in the absence of developed codified
legal system.In some countries like United States, Canada, United Kingdom, and other European
countries that resist the Sharia law and in some country Sharia law is followed refutably.

Business and money interest in Sharia law countries:

The laws of Islam are based upon the Sharia and are believed to be in the interests of the people as a
whole. For finance, the importance of this is that many of the traditional areas of corporate finance (such
as bank loans and leasing transactions) found in Westernized banks are, in fact, much different in Islamic
finance, merely because organizations governed by Islamic finance are not permitted to make money
from money.

Running through the term RIBA:

The word riba in Islamic law means an addition over and above principal. So riba is the addition in the
amount of the principal amount of a loan according to the time for which it’s loaned and the amount of
the loan. In other words, it’s the equivalent of interest, but financial systems based on Sharia law strive to
eliminate the payment and receipt of interest in all forms.

Keeping the line with the law SUKUK:

One way of raising debt finance for a company working within the Western finance tradition is to issue
bonds. In this situation, the bondholder receives interest and this interest is always paid before dividends
are paid to the shareholders.

MUDARABA (Financebywayoftrust):

Mudaraba is a form of partnership in which one partner (rab-ul-amal) provides the capital required for a
project while the other party (mudarib) manages the investment using its expertise. Profits from the
investment are distributed according to a fixed, pre-determined ratio. The capital provider carries the loss
in a Mudaraba contract unless it was due to the mudarib's negligence, misconduct or violation of the
conditions pre-agreed upon. Mudaraba may be concluded between an Islamic bank, as provider of funds,
on behalf of itself or on behalf of its depositors as a trustee of their funds, and its business-owner clients.
The bank pays its depositors all profits from the investment, after deducting its intermediary fees. It may
also be conducted between a bank's depositors as providers of funds and an Islamic bank as a mudarib.