An Introduction to

Islamic Finance
COMMUNITY WORKSHOP BY ICAN
 BOUNDARIES FOR THE USE
OF AQL
• What is the extent of the use of
Aql in Islam? (allowed in some
situations and not in others)

• For some aspects, detailed

guidelines; for others, some
principles and the structure can
be established around them (e.g.
Islamic finance)

• Divine commands cannot be

altered by human argumentation
and reason
IMPORTANCE OF THE SUBJECT
 WHY IS IT IMPORTANT TO STUDY TO TOPIC OF BUSINESS
TRANSACTIONS AND ISLAMIC FINANCE

‫الصْب على األُمور‬ ِ

‫قلّة ر‬
Or
Greedy Arrogant
about towards
wealth admonition
‫أ‬ ْ ُ ُ
َّ ‫ ِج‬، ‫سوإق‬
‫يفة‬ َّ ِ ‫ سَّابَّ يف إل‬، َّ‫ن للاَّ تعاىل يب ِغضَّ كَّ جعظ ِريَّ جوإظ‬ َّ ‫إ‬
‫آ‬ ْ
َّ ِ ، ‫ ِِحارَّ ابلهنا ِ َّر‬، ‫ابلليل‬
. َِِّ ‫ جا ِهلَّ ابل ِ َّخر‬، ‫عال ابلدنيا‬ َّ ِ

As-Saheeh Ul Jami 1878

 ‫‪COMMAND OF UMAR R.A.‬‬

‫ُ‬ ‫ُ ُ‬ ‫ُ‬
‫َّإلد ِ َّ‬
‫ن‬ ‫قالَّمعرَّريضَّللاَّعنهَّ‪ :‬الَّيبيعَّيفَّسو ِقناَّهذإَّإالََََّّّتفَّهَّيف ِ‬

‫‪Musnad Farooq 1/349 - Saheeh‬‬

 ISLA

IMPORTANT TO
ISLAMIC FINANCE IS NOT JUST ABOUT BUYING
HOUSES OR CARS.. A LOT REGARDING DAY TO
DAY INTERACTIONS
REMEMBER ABOUT
ISLAMIC FINANCE - MOST INTELLIGENT

ISLAMIC FINANCE
SCHOLARS IN THIS FIELD ARE FOUND TO BE THE
SPECIALISTS IN THIS FIELD

3 COMPONENTS
OFjust about buying
1. Not
and selling houses or
TRANSACTION
cars

2. Championed by some
of the best and most
profound scholars
AGENDA OF THE SESSION
 1. What is
prohibited

Contents

3. Islamic
2. What is
Finance
allowed
products
SOURCES FOR FURTHER STUDY
FINANCIAL SYSTEM IN ISLAM
 • Feudalism

• Capitalism – means of production with

individuals – no control on what is being traded
TYPES OF and sold – focus on money making
ECONOMIC
SYSTEMS • Socialism – means of production owned by state

• Islam – Community benefit at the core without

compromising the right to gain financial progress
 • Islam has got two economic systems!

TYPES OF • System 1 – based on legal precepts

ECONOMIC • Allows profit-making

SYSTEMS
• System 2 – based on Ihsan
• For community service
MAQASID OF
SHARIAH IN
TRANSACTIONS
Avoid Oppression

Avoid Arguments

Preserve wealth

Productive use of resources

Rotation of wealth

Elimination of poverty
3 COMPONENTS
OF TRANSACTION

1. Buyer and seller

2. The product
3. The sigha (or formula
or the method in
which the transaction
happens)
1. WHAT IS PROHIBITED?
1. MAJOR PROHIBITION: RIBA

I have money. I want to
make more money.
I have skills but not the
I will give you money on
money.
loan on a condition that
any loss will be yours
I need finances to do a
alone. You will owe me the
business.
principle as well as interest.
You might end up paying
double the amount.
Take my money
and earn me
interest
I have money. I want to
make more money too.
I have money.
I can become your business
I can give it to you on
partner and share your
interest-free loan for the
profits as well as losses.
sake of Allah.
But as I share in loss too, I
My reward is with Allah
will be extra diligent in
alone.
ensuring that you have the
right skills.
Take my money Give my money
and do more and earn me
business Sadaqa Jariyyah
 I have money. I want to
make more money. I don’t have money . But I I have money.
will borrow it and give it to
I have skills but not the
I will give you money on you. I can give it to you on
money.
loan on a condition that interest-free loan for the
any loss will be yours With that, I will become sake of Allah.
I need finances to do a
alone. You will owe me the your business partner and
business.
principle as well as interest. share your profits as well as My reward is with Allah
You might end up paying losses. alone.
double the amount.

Take my money You can borrow Give my money

and earn me from me but on and earn me
interest interest! Sadaqa Jariyyah
 ‫‪MADNESS OF RIBA‬‬

‫ُ ُ‬ ‫ُ‬ ‫ُ‬ ‫ُ‬ ‫ُ‬ ‫أ‬ ‫ْ‬

‫وم ٱل ِذى يتخب َّط َّه‬ ‫ُ‬
‫ٱلرَبإَّ الَّ يَّومونَّ ِإالَّ كما يَّ َّ‬ ‫ُ‬ ‫ٰ‬
‫ٱل ِذنَّ يأُكونَّ ِ‬
‫ٰ أ‬ ‫ْ ُْ ُْ‬ ‫آُ‬ ‫ْ‬ ‫ُ‬ ‫أ‬ ‫ٰ‬ ‫ْ‬ ‫ْ‬
‫ل ٱل ِرَبإَّۗ وأحلَّ‬ ‫م قَّالوإَّ ِإّنا ٱلبي َّع ِمث َّ‬ ‫ن ََِّ ٱلم ِسَّۚ ذ ِلكَّ ِبأّن َّ‬ ‫ُ‬ ‫ٰ‬
‫ٱلشيطـ َّ‬
‫ٰ ۥُ‬ ‫ْ‬ ‫ُ‬ ‫آ‬ ‫ٰ‬ ‫ْ‬ ‫ْ‬ ‫ُ‬
‫ۦ‬
‫َ ر ِب َِّه فٱنَت َّى فل َّه ما‬ ‫ِ‬ ‫ۥ‬
‫ٱلرَبإَّۚ َفن جاءَّ َّه مو ِعظةَّ َّ‬ ‫ٱلل ٱلبيعَّ وحرمَّ ِ‬ ‫َّ‬
‫ٰ ُ‬ ‫ُْ‬ ‫ْ‬ ‫أ‬ ‫آ‬ ‫ُ‬ ‫أ‬ ‫أ ْ ُ ۥ آُ‬
‫ه َِّفهيا خـ ِلدونَّ‬
‫ب ٱلنا ِرَّۖ َّ‬ ‫ُ‬ ‫ٰ‬ ‫ٰ‬
‫َ عادَّ فأولَّـ ِِكَّ أْصـ َّ‬ ‫ْ‬
‫سلفَّ وأمر َّه ِإىلَّ ٱلل َِّۖ و َّ‬

‫‪Surah Baqarah 275‬‬

 ‫‪WAR WITH ALLAH AND HIS MESSENGER‬‬

‫ُُْ ْ ُْ ُُ ُ‬ ‫ُ‬ ‫ْ‬ ‫ُ‬ ‫أ‬ ‫ُ‬ ‫ْ ْ‬

‫ف ِانَّلَّتفعلوإَّفأذُنإ َِِّبرب َََِّّللاَِّور َّ‬
‫سو َِّل ِهََّّۖو ِإنَّتبتمَّفلُكَّرء َّ‬
‫وس‬
‫ُ‬ ‫ُْ‬ ‫ُ‬ ‫أْ ُْ ْ‬
‫أموإ ِلُكَّالَّتظ ِلمونَّوالَّتظلمونَّ‬

‫‪Surah Baqarah 279‬‬

‫‪WAR WITH ALLAH AND HIS MESSENGER‬‬

‫ال‬ ‫ْ‬
‫َّإْبَّعباسَّريضَّللاَّعنهَّق َّ‬
‫َّنع ِ‬‫نعَّإلطربي ِ‬
‫ْ‬ ‫ْ‬ ‫ْ‬ ‫ُ‬ ‫آ‬ ‫ْ‬ ‫ُ‬ ‫ُ‬
‫َّساَلحكَّ ِللحر ِ َّ‬
‫َّإلرابَّخذ ِ َّ‬ ‫ْ‬
‫يَّالََّيمَّإل َِّيام ِة َِّل ِ ِ‬
‫ب‬ ‫ك ِ‬
‫ْ‬ ‫ُ‬ ‫ْ‬ ‫ُ‬ ‫ُ‬ ‫ُ‬ ‫ُ‬ ‫ُ‬ ‫أ ُ‬
‫وقرأَّالَّيَّومون َِّإالَّكماَّيَّومَّإل ِذيَّيتخب َّطهَّإلشيطان َََِّّإلم ِ َّ‬
‫س‬

‫‪ 1/330‬احملدث أمحد شاكر خالصة حكم احملدث إسناده صحيح يف عمدة التفسري‬
 ‫‪EVERYONE INVOLVED IS CURSED‬‬

‫ْ‬ ‫ُ‬
‫بَّصّلَّللاََّّعلي ِهَّوسلمَّقالَّ‪:‬‬ ‫َّإلن‬ ‫ْ‬
‫َّنع‬ ‫ود‬‫ع‬‫ُ‬ ‫ْ‬
‫س‬ ‫َّم‬ ‫ْ‬
‫َّْب‬ ‫ِ‬ ‫َّللا‬ ‫د‬ ‫ْ‬
‫ب‬ ‫َّع‬ ‫ْ‬
‫نع‬
‫ِِ‬ ‫ِ‬ ‫ِ‬
‫ُ‬ ‫ْ‬ ‫ُ‬ ‫ُ‬ ‫ُآ‬
‫وُكهَّوشا ِهد َّي ِهَّوَ ِتبهَّ‬ ‫لعنَّللاَّأ ِك ِ‬
‫َّإلرابَّوم ِ‬
‫ُ‬ ‫ْ‬ ‫أ‬ ‫أ ُ‬
‫ِ‬
‫َّللاَّعزَّوج َّ‬
‫ل‬ ‫ْ‬
‫إلزَن َِّإالَّأح َّلوإَّ ِبأنف ِس ِهمَّ ِعَّاب َّ‬ ‫ْ‬
‫َّإلرابَّو ِ‬
‫ماَّظهر َِّيفَّقوم ِ‬

‫‪ 3799‬مسند أمحد بن حنبل مسند العشرة املبشرين ابجلنة‬

HARMS OF RIBA

• Reason for 80% of prostitution in the world

• 0.3% of world’s wealth is spend on charity – 2.5% can solve all world’s
problem. Rather than giving sadaqa to the poor, we lend them on interest?

• Limiting entrepreneurship

• Richer become rich; the poor has no means to come out of it

HOW TO IDENTIFY RIBA
ً ُ ً ْ ُ
ْ
• ‫إيَّقرضَّجرَّنفعاَّفهوَّ ِر َّاب‬

• No benefit what so ever from the one you give loan to; not even benefitting
from the shade of their house

• Consumables have to be returned without any increase; Rent be charged for

non-consumables
 FINANCIAL CRISES OF 2008

MAIN CRISES – INTEREST / SELL OF DEBTS - NO REAL ECONOMY – JUST NUMBERS

WHAT TO DO WITH INTEREST MONEY

• Give it to general charitable purposes (for example building hospitals, schools,

and so on)

• Do not use it for building masjid or Quran

2. MAJOR PROHIBITION: GHARAR
 PROHIBITION OF GHARAR

• High level of uncertainty

• Unknown price
• Unknown product
• Quantity of product not known
• Not known if the product is available or not
• Unknown delivery timeframe
• Too complex transaction
 Fahish
Types of
gharar
Yaseer

Examples of Gharar Yaseer (difference in the number

of rice in a plate of biryani; number of salami’s on the
All Night Café Pizza 😋)
 GHARAR
ُ ْ ْ
‫ ابب بي ِ َّع إلماَلمس َِّة‬- Purchase where inspection is not allowed

Narrated Abu Sa`id: Allah's Messenger ‫ ﷺ‬forbade the selling by Munabadha, i.e.
to sell one's garment by casting it to the buyer not allowing him to examine or
see it. Similarly he forbade the selling by Mulamasa. Mulamasa is to buy a
garment, for example, by merely touching it, not looking at it.

‫أ أ‬ ْ‫أ‬ ُ
‫ أنَّ أابَّ س ِعيدَّ ـ‬،‫ْب س ْعد‬ َّ ُ ْ ‫ن عا ِم ُ َّر‬
َّ ِ ‫ قالَّ أخرب‬،‫إْب ِشهاب‬ َّ ِ ،‫ن ُعَّ ْيل‬
َّ ِ ْ ‫نع‬ َّ ِ ‫ قالَّ حدث‬،‫ث‬ َّ ِ ‫ قالَّ حدث‬،‫ْب ُعف ْْي‬
ُ ‫ن إلل ْي‬ َّ ُ ْ ‫يد‬
َّ ‫حدثنا س ِع‬
ْ‫ن‬ ‫ُ ْ أ‬ ْ ُ ْ ُ ُ ْ ْ ‫أْ ُأ‬
ْ
َّ ‫ قبلَّ أ‬،‫ل َثب َّه ِابلبي ِ َّع ِإىلَّ إلرَّج ِل‬ َّ ِ ‫ح إلرج‬
َّ ‫ وَّىه طر‬،ِِ ‫نع إلمنابذ‬ ُ َّ ِ ‫للاِ صّل للا عليه وسلم ّنى‬ َّ َّ‫رىض للا عنه ـ أخرب َّه أنَّ ر ُسول‬
ْ ُ ُْ ْ ُ ْ ُ ُ ْ ُ ْ ْ ُ ْ ْ‫ُ ُ أ‬
.‫ب الَّ ينظ َّر ِإلي َِّه‬ َّ ِ ‫ وإلماَلمس َّة لمسَّ إلثَّو‬،ِ‫نعَّ إلماَلمسة‬ ِ ‫ وّنى‬،‫ أ َّو ينظرَّ ِإلي ِه‬،‫يَّ ِلبه‬

Reference : Sahih al-Bukhari 2144

 GHARAR

Narrated Ibn `Umar: The Prophet ‫ ﷺ‬forbade Muzabana; and Muzabana is the
selling of fresh fruit (without measuring it) for something by measure on the
basis that if that thing turns to be more than the fruit, the increase would be
for the seller of the fruit, and if it turns to be less, that would be of his loss.
Narrated Ibn `Umar from Zaid bin Thabit that the Prophet ‫ ﷺ‬allowed the
rukhsah for selling of the fruits on the trees after estimation (when they are
ripe).

‫أ‬ ُ ْ ْ ُ‫ْ أ‬ ْ ُ ْ ُ ْ ُ ُ‫أ‬

‫ب صّل للا عليه وسلم‬ َّ ِ ‫إْب معرَّ ـ رىض للا عهنما ـ أنَّ إلن‬
َّ ِ ‫نع‬َّ ِ ،‫نع َن ِفع‬ َّ ،‫ نعَّ أَيب‬،‫ْب زيد‬ َّ ‫اد‬ َّ ‫ حدثنا ِح‬،‫ان‬ ِ ‫َب إلنعم‬
َّ ‫حدثنا أ‬
‫أ‬ ُ ْ ُْ ْ ْ ْ ْ ‫ُ أ‬ ُ ْ ُ ْ
َّ ِ ‫ أنَّ إلن‬،‫ْب َث ِبت‬
‫ب‬ َّ ‫ن زي َّد‬ َّ ِ ‫ قالَّ وحدث‬.َّ‫ن نَّصَّ فعّل‬َّ ‫ل و ِإ‬َّ ِ ‫ن زإدَّ ف‬ َّ ‫نع إلمزإبن َِّة قالَّ وإلمزإبن َّة أ‬
َّ ‫ ِإ‬،‫ن ي ِبيعَّ إلثمرَّ ِبكيل‬ َّ ِ ‫ّنى‬
ْ ْ
.‫يف إلعرإيَّ ِِبر ِصها‬ َّ ِ َّ‫صّل للا عليه وسلم رخص‬

Reference : Sahih al-Bukhari 2172, 2173

3. OTHER PROHIBITIONS
OPPORTUNITY TO EARN A VIRTUAL CHOCOLATE
Review the next two ahadith and tell if one can sell what one doesn’t have
or not
 SELLING WHAT YOU DO NOT HAVE

It was narrated that Hakim bin Hizam said: "I said: 'O Messenger of Allah ‫ﷺ‬, a
man is asking me to sell him something that I do not possess; Shall I sell it to
him?' He said: 'Do not sell what is not with you."'

ْ‫نع‬ ُ ُ ْ ُ ُ ُ ْ ْ ‫ُ ْ ُ ْ أ‬ ْ ُ ْ ُ ُ ُ ْ ُ ُ
َّ ‫ث‬ َّ ‫ ُي ِد‬،َّ‫ْب ماهك‬
َّ َّ‫ت َيسف‬ َّ ‫َسع‬ ِ َّ‫ قال‬،‫ب ِبْش‬َّ ِ ‫نع أ‬
َّ ،‫ حدثنا ش َّعبة‬،‫ْب جعفر‬ َّ ‫ حدثنا ُمم َّد‬،‫ْب بشار‬ َّ ‫حدثنا ُمم َّد‬
ْ ُ ‫ْ أ أ‬ ْ ُ‫ُ ُ ْ أ‬ ُْ
ْ ْ ُ ْ ْ
. " َّ‫ن إلبيعَّ وَّليسَّ ِعن ِدي أفأ ِبيع َّه قالَّ " الَّ ت ِب َّع ما ليسَّ ِعندك‬ َّ ‫للاِ إلرج‬
َّ ِ ‫ل يسأل‬ ُ
َّ َّ‫ت يَّ رسول‬ ُ َّ ِ ْ ‫ِيم‬
َّ ‫ قالَّ قل‬،‫ْب ِحزإم‬ َّ ِ ‫حك‬

Reference : Sunan Ibn Majah 2187

 SELLING WHAT YOU DO NOT HAVE

Narrated Ibn `Abbas: Allah's Messenger ‫ ﷺ‬came to Medina and the people
used to pay in advance the price of fruits to be delivered within one or two
years. (The sub-narrator is in doubt whether it was one to two years or two to
three years.) The Prophet ‫ ﷺ‬said, "Whoever pays money in advance for dates
(to be delivered later) should pay it for known specified weight and measure
(of the dates).

ْ ْ ْ ‫ْ أ‬ ْ ْ ْ ‫ُْ أ‬ ْ‫أ‬ ُ ُ ْ ُ ْ ْ‫أ‬ ُ ُْ ُْ

َّ ِ َّ‫نع‬
‫إْب‬ ِ ،‫ال‬
ِ ‫ب إل ِمهن‬ َّ ِ ‫نع أ‬
َّ ،‫ْب ك ِثْي‬ ِ
َّ ِ َّ‫نع عب ِ َّد للا‬َّ ،‫ب َِنيح‬ َّ ِ ‫إْب أ‬
َّ َّ‫ أخربَن‬،‫إْب علية‬ َّ ‫يل‬ َّ ‫ أخربَنَّ ِإَسا ِع‬،ِ‫ْب زرإر‬ َّ ‫حدثنا معرو‬
ْ ْ ْ ُ ُْ ُ ْ ُ ُ
َّ ِ ‫يف إلثم ِ َّر إلعامَّ وَّإلعام‬
‫ي‬ َّ ِ َّ‫ وَّإلناسَّ يس ِلفون‬،‫للاِ صّل للا عليه وسلم إلم ِدينة‬ َّ ‫ول‬ َّ ‫عباسَّ ـ رىض للا عهنما ـ قالَّ ق ِدمَّ رس‬
ُْ ْ ُْ ْ ْ ُْْ ْ ُ ْ ً ‫ْ أ‬ ‫أ‬
." َّ‫ ووزنَّ معلوم‬،‫يف كيلَّ معلوم‬ َّ ِ ‫ف‬ َّ ‫يف َترَّ فليس ِل‬
َّ ِ َّ‫َ سلف‬ ْ
َّ " َّ‫يل ـ فَّال‬ َّ ‫ شكَّ ِإَسا ِع‬.‫ي أ ْ َّو ثاَلث َّة‬
َّ ِ ‫ـ أ ْ َّو قالَّ عام‬

Reference : Sahih al-Bukhari 2239

DO NOT SELL WHAT YOU DON’T HAVE

• It is about a specific product – i.e. a particular phone or a particular car or so on

when we don’t really have it. “A” car or “a” phone is fine as long as you are the
primary producer.

• This practice supplies finances to the producers and manufacturers

• Same applies for the house.

• If it is in the ownership of your agent (e.g. the logistic company you employed), that
is fine too
 MULTIPLE SALES IN ONE CONTRACT ARE NOT ALLOWED

Narrated Abu Hurairah: "The Messenger of Allah ‫ ﷺ‬prohibited two sales in one.“

ْ ْ ْ ُ ُ ْ ُ ‫ْ أ‬
ْ
ِ ‫َّقالَّّنىَّرسولَّللاَِّصّلَّللاَّعليهَّوسلمَّنعَّبيعت‬،ِ‫نعَّأ ِبَّهرْي‬
َّ‫ي َِّيفَّبَّيعة‬

Reference : Jami` at-Tirmidhi 1231

“I will marry your sister if you marry mine”

“I will sell you my car, if you sell me your boat"
 ‫‪SELLING AFTER HOARDING‬‬

‫‪ as saying: No one‬ﷺ ‪Ma'mar b. Abdullah reported Allah's Messenger‬‬

‫‪hoards but a sinner.‬‬

‫ْ ُ‬ ‫ْ ُ ْ ْ‬ ‫ْ‬ ‫ُ‬ ‫ْ‬ ‫ُ‬ ‫ُ‬ ‫أْ‬ ‫ُ ُْ ْ‬

‫نع ُمم ِ َّد‬
‫عاَلن‪َّ ،‬‬ ‫ْب َّ‬
‫نع ُمم ِ َّد ِ َّ‬
‫ْب ِإَسا ِعيل‪َّ ،‬‬ ‫م َّ‬ ‫ْب معرو إلشع ِث‪ ،‬حدثنا حا ِت َّ‬ ‫يد َّ‬
‫حدثنا س ِع َّ‬
‫ُ‬ ‫ْ‬ ‫ْ‬ ‫ْ‬ ‫ْ‬ ‫ْ‬ ‫ُ‬ ‫ْ ْ‬ ‫ْ‬ ‫ْ‬ ‫ْ‬ ‫ْ‬
‫للا صّل للا‬ ‫ِ‬ ‫نع رس ِ َّ‬
‫ول َّ‬ ‫ِ‬
‫ْب عب ِ َّد للا‪َّ ،‬‬
‫نع مَّعم ِ َّر ِ َّ‬ ‫ب‪َّ ،‬‬ ‫ْب مسي ِ‬ ‫إل‬ ‫نع س ِعي ِ َّد ِ َّ‬‫ْب عطاء‪َّ ،‬‬ ‫ْب مع ِرو ِ َّ‬
‫ِ َّ‬
‫عليه وسلم قالَّ " الَّ ُْيتك ُ َِّر ِإالَّ خا ِطئَّ " ‪.‬‬

‫‪Reference : Sahih Muslim 1605b‬‬

 SELLING AFTER HOARDING
Why is hoarding prohibited while none of the following is prohibited?

• It is my product; I can stock it as much as I like (there is no

prohibition on having product stocks).
• I can sell it when I like. I can decide if I don’t need to sell it for a
time
• I can determine the price of it myself.

Answer:

Important principle: The right of community takes precedence over

individual right.
 UNETHICAL BEHAVIOURS HARAM

Narrated `Abdullah bin `Umar: Allah's Messenger ‫ ﷺ‬said, "Do not urge
somebody to return what he has already bought (i.e. in a sale where an option
to return is available) from another seller so as to sell him your own goods."

‫أ‬ ُ ْ ُ
ُ
‫معرَّ ـ رىض للا عهنما ـ أنَّ رسولَّ للاَِّ صّل للا عليه وسلم‬ َّ ِ ِ‫للا‬
َّ ‫ْب‬ ْ
َّ ‫نع عب ِ َّد‬ْ
َّ ،‫نع َن ِفع‬ْ
َّ ،‫ن ما ِلك‬ َّ ِ ‫ قالَّ حدث‬،‫حدثنا ِإ َْسا ِعيل‬
‫ْ أ‬ ْ ُ ُ ْ ُ
." ‫ُك َعَّ بي ِ َّع أ ِخي َِّه‬
َّ ‫يع بعض‬ َّ ‫ال " الَّ ي ِب‬
َّ ‫ق‬

Reference : Sahih al-Bukhari 2139

 HIDING FAULTS OF PRODUCT AND
PRESENTING IT AS WHAT IT IS NOT

It was narrated from Abu Qatadah that the Messenger of Allah ‫ ﷺ‬said: "Beware
of swearing oaths when selling, for it may help you to make a sale but it destroys
the blessing."'

َُّ‫ قاالَّ حدَّثنا ُُمم ُ َّد ْْب‬،‫ْبَّ عياش‬ُ ْ ‫يل‬ُ ْ ْ‫ْ ُ أ‬

ْ ُ ُ
َّ َّ‫ ح وحدثنا ِهشام‬،‫ حدثنا عب َّد إلَع‬،‫ْب خلف‬
َّ ‫ حدثنا ِإَسا ِع‬،‫ْب معَّار‬ َّ ُ ْ َّ‫حدثنا ُْيي‬
ْ ْ ْ ُْ ُ ُ ‫ْ أ‬ ْ‫ب‬ ْ ‫ْب ك‬ ْ ‫نع م ْعب َّد‬ ْ
‫يف إلبي ِ َّع‬ َّ ‫للاِ ـ صّل للا عليه وسلم ـ " ِإي‬
َّ ِ َّ‫ك وإْل ِلف‬ َّ ‫ول‬
َّ ‫ قالَّ قالَّ رس‬،ِ‫ب قتاد‬
َّ ِ ‫نع أ‬
َّ ،‫ْبَّ ما ِلك‬
ِ َِّ ‫ع‬ َّ ِ ِ َّ ْ ،‫اق‬ ‫ْس‬ ‫ِإ‬
ُ ْ ُ ُ ُُ
."‫ق‬ َّ ‫ق ثمَّ َيح‬ َّ ‫ف ِان َّه ين ِف‬

Reference : Sunan Ibn Majah 2209

 RIBA AL-FADHL: MONEY AND CONSUMABLES RIBA IN SALE

Narrated Abu Sa`id: We used to be given mixed dates (from the booty) and used to
sell (barter) two Sas (of those dates) for one Sa (of good dates). The Prophet ‫ ﷺ‬said
(to us), "No (bartering of) two Sas for one Sa nor two Dirhams for one Dirham is
permissible", (as that is a kind of usury).

ُ ْ ْ ْ ْ ْ ْ ُ ُْ ُ ‫ْ أ‬ ‫ْ أ‬ ْ ْ ُ ْ ْ ُ ُ‫أ‬
َّ ِ ‫ط‬
َ َّ ‫ و َّهوَّ إْلِل‬،‫ق َترَّ إْلم ِع‬َّ ‫ب سَّ ِعيدَّ ـ رىض للا عنه ـ قالَّ كنا ُنز‬ َّ ِ ‫نع أ‬
َّ ،‫ب سلمة‬
َّ ِ ‫نع أ‬
َّ ،‫نع ُيي‬ َّ ،‫ حدثنا شيبان‬،‫َب نعيم‬ َّ ‫حدثنا أ‬
ْ ْ ْ ْ ُ ْ ُ ُ ْ
." َّ‫ي ِب ِدره‬ َّ ِ ‫ والَّ ِدرَه‬،‫ي ِبصاع‬
َّ ِ ‫ب صّل للا عليه وسلم " الَّ صَّاع‬ َّ ِ ‫ي ِبصاعَّ فَّالَّ إلن‬
َّ ِ ‫يع صاع‬
َّ ‫ وكنا ن ِب‬،‫إلتم ِر‬

Reference : Sahih al-Bukhari 2080

 IMPLICATIONS OF RIBA AL-FADHL

• Unequal exchange quantities at a later time – “take a Sa of wheat from me now

and give me two Sa later”

• Unequal exchange quantities at the time of Bai: “New currency notes”, “Gold
Jewellery replacement”

• Reason for prohibition: Unnecessary argumentation; Sadd Ad-Diraye; undue gain

SOME OTHER PROHIBITIONS / DISLIKED MATTERS

• Selling prohibited times

• Going out of city to purchase in advance
• Selling debt for a debt – the cycle can move
on and on
• Monopoly disliked in Islam
4. HOW CONVENTIONAL MORTGAGES WORK
HOW CONVENTIONAL FINANCE WORKS

NORMAL PROCESS:
Principle

Security

(Can be
substituted with Principle +
another security interest
for a fee)
HOW CONVENTIONAL FINANCE WORKS
Late fee,
IN CASE OF DEFAULT: additional interest,
Legal and processing fees
2. WHAT IS ALLOWED?
 INSTALMENTS

ْ ‫ْ أ‬ ْ ُ ْ ْ ْ‫أ‬ ُ ُ ُ ْ ُ ْ
َّ‫َّنعَّعاِِشةَّـَّرىضَّللا عهناَّـ‬،‫َّنعَّأ ِبي ِه‬،ِ‫َّْبَّع َّرو‬
ِ ‫ام‬ ِ ‫َّنعَّ ِهش‬،‫َّأخربَنَّما ِلك‬،‫حدثناَّعبدَّللاَِّْبََّيسف‬
ُ ‫ْ أ‬ ْ ‫ْ ْ ُ أ‬ ُ ْ ْ
‫كَّعامََّّو ِقي َّة‬
ِ َِّ‫يف‬ َّ‫إق‬‫و‬‫َّأ‬‫ع‬ ‫س‬
ِ ِ ِ َّ‫ََّع‬َّ
‫ل‬ ِ ‫ه‬ ‫أ‬ َّ‫ت‬ ‫ب‬‫ت‬ََّ‫ت‬ ‫ال‬ َّ ‫َّف‬ ِ ‫ْي‬‫ََّب‬
ِ ِ‫ن‬‫ت‬ ‫اء‬ ‫َّج‬‫ت‬ ‫قال‬
Sahih al-Bukhari 2168

Narrated `Urwa: Aisha said, "Barira came to me and said, 'I have agreed with my
masters to pay them nine Uqiyas (of gold) (in installments) one Uqiya per year…
 AUCTION

ْ ‫ْ أ‬ ْ ْ ْ ُْ ُ ْ‫أ‬ ْ ْ ْ ُ ُْ ُْ ُ ْ‫أ‬ ْ ُ ْ ‫حدثنا ُِح ْي ُ َّد‬

َّ ِ ‫س‬
‫ْب‬ َّ ِ ‫نع أن‬
َّ ،‫ف‬ ‫ن‬‫إْل‬ ِ َّ
‫للا‬ َّ
‫د‬ ‫ب‬ ‫ع‬ َّ
‫نع‬ ْ ،‫ن‬ ‫اَل‬ ‫ع‬ َّ
‫ْب‬ َّ
‫ض‬ ‫خ‬‫إل‬ ‫ا‬‫ن‬ ‫ث‬ ‫د‬ ‫ح‬ ،‫ن‬ ‫اَل‬ َّ
‫ع‬ َّ
‫ْب‬ ِ ِ َّ
‫ط‬ ‫ي‬ ‫ُش‬ َّ
‫ْب‬ ِ َّ
‫للا‬ َّ
‫د‬ ‫ي‬‫ب‬‫ع‬ ‫َن‬
َّ ‫رب‬‫خ‬ ‫أ‬ ،ِ ‫د‬ ‫ع‬ ‫س‬ ‫م‬ َّ
‫ْب‬
ِِ ِ
ُ ْ ْ ْ ْ ْ ً ً ْ ُ ‫أ‬
َّ‫ فَّالَّ رجل‬. " َّ‫َتي هذإ إْلِلسَّ وإلَّدح‬ ِ ‫ش‬ َّ ‫َ ي‬َّ " َّ‫للاِ صّل للا عليه وسلم ابعَّ ِحلسا وقدحا وقال‬ َّ َّ‫ أنَّ رسول‬،‫ما ِلك‬
ْ ْ ُ ُ ْ‫أ‬ ْ ُ ْ ْ ُ ْ ُ ْ ُ ُ ْ ‫أ‬
َّ ِ ‫َه‬
‫ي‬ َّ ‫اه رجلَّ ِدر‬
َّ ‫يد َعَّ ِدرهَّ " فأعط‬ َّ ‫َي‬ِ َ َّ َّ‫يد َعَّ ِدره‬ َّ ‫َي‬ ِ ََّ " ‫ب صّل للا عليه وسلم‬ َّ ِ ‫ فَّالَّ إلن‬. َّ‫أخذُتما ِب ِدره‬
. ‫فباع ُهما ِم ْن َُّه‬

Narrated Anas bin Malik: That the Messenger of Allah ‫ ﷺ‬sold a saddle blanket and a drinking
bowl. He ‫ ﷺ‬said: "Who will buy saddle blanket and drinking bowl?". So a man said: "I will take
them for a Dirham." So the Prophet ‫ ﷺ‬said: "Who will give more than a Dirham ? Who will give
more that a Dirham ?" A man agreed to give him two Dirham, so he sold them to him.

Jami` at-Tirmidhi 1218 - Hassan

SOMEONE DOING TRANSACTION ON ANOTHER PERSON’S
BEHALF (I.E. THE USE OF AGENTS)

Narrated Jabir: The Prophet ‫ ﷺ‬sold a Mudabbar (on behalf of his master who
was still living and was in need of money).

ُ‫ب‬ ْ ْ ْ ُ ْ ْ ُ ْ ْ ُ ُْ
َّ ِ ‫اَب ـ رىض للا عنه ـ قالَّ ابَّعَّ إلن‬
َّ ِ ‫نع ج‬
َّ ،‫نع عطاء‬
َّ ،‫ْب كهيل‬
َّ ِ َّ‫نع سلمة‬
َّ ،‫ حدثنا ِإَسا ِعيل‬،‫ حدثنا وكِيع‬،‫إْب ّنْي‬
َّ ‫حدثنا‬
ُ ْ
.َّ‫صّل للا عليه وسلم إلمدَب‬

Reference : Sahih al-Bukhari 2230

‫)‪LOAN AND RIHN (SECURITY PROPERTY‬‬

‫‪ purchased food grains from a Jew on‬ﷺ ‪Narrated `Aisha R.A.: The Prophet‬‬
‫‪credit and gave his iron Armor to him as Rihn.‬‬

‫ْ‬ ‫ْ‬ ‫ْ‬ ‫ْ‬ ‫أ ْ ُ‬ ‫ْ ُ ْ‬ ‫ُ ُْ أ‬

‫م فََّّالَّ حدث ِ َّ‬
‫ن‬ ‫يف إلسل ِ َّ‬‫ّل ْبَّ أسد‪ ،‬حدثنا عب َّد إلوإ ِح ِد‪ ،‬حدثنا إلمعش‪ ،‬قالَّ ذكرَنَّ ِعندَّ ِإَبإ ِهيمَّ إلرهنَّ ِ َّ‬ ‫حدثنا مع َّ‬
‫أ‬ ‫ْ‬ ‫أ‬ ‫أ ُ‬
‫َ َيُو ِديَّ ِإىلَّ أجل‪ ،‬ورهن َُّه ِد ْ َّر ًعا ِ ْ َّ‬
‫َ‬ ‫إشَتى طَّع ً‬
‫اما ِ ْ َّ‬ ‫ب صّل للا عليه وسلم‬ ‫إل ْسو َّد ْ َّ‬
‫نع عاِِشةَّ ـ رىض للا عهنا ـ أنَّ إلن ِ َّ‬
‫ح ِديدَّ‪.‬‬

‫‪Reference : Sahih al-Bukhari 2068‬‬

CAN THE PERSON PUTTING THE RIHN USE IT

ُ ُ ُ ُ ُ ُ
‫َّصاحبهَّإلذيَّرهنهَّ؛َّلهَّغنمهَّوعلي ِهَّغرمه‬
ِ ِ
ََّ‫الَّيغلقَّإلرهن‬

‫ التعليقات الرضية‬: ‫ املصدر‬- ‫ صحيح على شرط مسلم‬: ‫ | خالصة حكم احملدث‬481/2 : ‫الصفحة أو الرقم‬

The one with whom the security is deposited cannot benefit from it. The person who
deposits can.
PRE-EMPTION

Narrated Jabir bin `Abdullah: Allah's Messenger ‫ ﷺ‬decided the validity of pre-
emption in every joint undivided property, but if the boundaries were well
marked or the ways and streets were fixed, then there was no pre-emption.

ْ ‫ْ أ‬ ْ ُ ْ ُ ْ ُ ُ
ْ
‫ْب عب ِ َّد‬ ْ
َّ ِ ‫اَب‬َِّ ِ ‫نع ج‬ ْ
َّ ،‫ن‬ ْ ْ
َّ ِ َّ‫ب سلمة‬
َّ ِ ‫ْب عب ِ َّد إلرِح‬ َّ ،‫نع إلزه ِر ِي‬
َّ ِ ‫نع أ‬ ْ
َّ ِ ،‫ حدثنا معمر‬،‫ حدثنا عب َّد إلوإ ِح ِد‬،‫ْب ُمْ ُبوب‬ َّ ُ ْ ‫حدثنا ُمم َّد‬
ُ ُ ُُْ ْ ُْ ْ ُ ْ ُ ُ ‫للاِ ـ رىض للا عهنما ـ قالَّ قضَّ إلن‬
َّ ِ ‫صف‬
‫ت‬ ِ ‫ود و‬ َّ ‫ت إْلد‬َّ ِ ‫ ف ِاذإ وقع‬،‫ل يَّسم‬ َّ َّ‫ك مال‬ َّ ِ ‫بَّ صّل للا عليه وسلم ِابلشفع َِّة‬
َّ ِ ‫يف‬ ِ َّ
ْ ُ ُُ ُ
.َّ‫إلطرقَّ فاَلَّ شفعة‬

Reference : Sahih al-Bukhari 2214

 SALARY

Narrated Abu Huraira: The Prophet ‫ ﷺ‬said, "Allah says, 'I will be against three
persons on the Day of Resurrection: 1. One who makes a covenant in My Name,
but he proves treacherous. 2. One who sells a free person (as a slave) and eats
the price, 3. And one who employs a labourer and gets the full work done by
him but does not pay him his wages.' "

ُ ‫ْ أ‬ ‫ْ أ‬ ُ‫ْ أ‬ ْ
ْ
‫ب َّهرْيَِّ ـ رىض للا‬ َّ ِ ‫ نعَّ أ‬،‫ب س ِعيد‬
َّ ِ ‫ْب أ‬
َّ ِ ‫نع س ِعي ِ َّد‬ْ
َّ ،‫ْب أمية‬ َّ ِ َّ‫نع ِإ َْسا ِعيل‬ ُ ْ َّ‫ حدثنا ُْيي‬،‫ْب م ْر ُحوم‬
َّ ْ ،‫ْبَّ ُسل ْيم‬ َّ ُ ْ ‫ْش‬َّ ُ ‫ن ِب‬ َّ ِ ‫حدث‬
ُ ْ ‫ُ أ‬ ْ ْ ْ ُُ ْ ‫أ‬
ُ
َّ‫ ور َّجلَّ ابع‬،‫ رجلَّ أعطَّ ِبَّ ثمَّ غدر‬،ِ‫َيمَّ إل َِّيامة‬ َّ ‫م‬
َّ ‫للا ثاَلثةَّ أَنَّ خصمه‬ َُّ َّ‫ب صّل للا عليه وسلم قالَّ " قال‬ َّ ِ ِ ‫نع إلن‬ َّ ِ ‫عنه ـ‬
ُ ْ ‫ُ ُ ْ ْأ أ ً ْ ْ ْ ُ ْ ُ ْ أ‬ ‫ًُ أ‬
." ‫ط أجر َّه‬ َّ ِ ‫ل يع‬
َّ ‫ و‬،‫ ورجلَّ إستأجرَّ أ ِجْيإ فاستوفَّ ِمنه‬،‫حرإ فأكَّ َثنه‬

Reference : Sahih al-Bukhari 2227

 RETURN OPTION
Narrated Ibn `Umar: Allah's Messenger ‫ ﷺ‬said, "Both the buyer and the seller have
the option of cancelling or confirming the bargain, as long as they are still together;
and unless they separate or one of them gives the other the option of keeping or
returning the things and a decision is concluded then, in which case the bargain is
considered final. If they separate after the bargain and none of them has rejected
it, then the bargain is rendered final."

ُ ‫أ‬ ُ ْ ُ ْ ْ ُ ْ ُ ْ ُ
َّ‫للاِ صّل للا عليه وسلم أن َّه قالَّ " ِإذإ تَّبايع‬َّ ‫ول‬
َّ ِ ‫نع رس‬
َّ ‫إْب معرَّ ـ رىض للا عهنما ـ‬ َّ ِ ‫نع‬
َّ ِ ،‫نع َن ِفع‬
َّ ،‫ حدثنا إلليث‬،‫حدثنا قتيبة‬
ْ‫ن‬ ُ ْ ْ ‫ً أْ ُ ُ أ ُ ُ آ‬ ْ ُْ ُ ُ
ْ
َّ ‫ و ِإ‬،‫ فَّ َّد وجبَّ إلبيع‬،‫ْي أحدَها إلخرَّ فتبايعا َعَّ ذ ِلك‬ َّ ِ ‫ أ َّو ُي‬،‫َجيعا‬
ِ َّ‫ وََن‬،‫ل يتفرقا‬ ْ
َّ ‫ ما‬،‫ك وإ ِحدَّ ِمهنما ِابْل ِيا ِر‬
َّ ‫ن ف‬ َّ ِ ‫إلر ُجاَل‬
ُ ْ ْ ْ ْ ْ ُْ ُْْ ْ ْ ‫ْ أ‬
." ‫ فَّ َّد وجبَّ إلبي َّع‬،‫ك وإ ِحدَّ ِمهنما إلبيع‬ َّ ‫ل يَت‬ َّ ‫ و‬،‫ن يتبايعا‬ َّ ‫تفرقا بعدَّ أ‬

Reference : Sahih al-Bukhari 2112

 RENT

Narrated `Abdullah: Allah's Messenger ‫ ﷺ‬rented the land of Khaibar to the Jews
on the condition that they would work on it and cultivate it and take half of its
yield.

ْ ‫أ‬ ْ ْ ْ ْ ‫ُ ْ ُ ُْ أ‬ ْ ‫ْبَّ إ‬
ُ ْ َّ‫حدثنا ُموس‬
َّ‫للاِ ـ رىض للا عنه ـ قالَّ َّأعط‬ َّ ‫نع عب ِ َّد‬
َّ ،‫نع َن ِفع‬َّ ،‫ْب أَساء‬َّ ‫ْيي َّة‬ ِ ‫و‬‫ج‬ ‫ا‬ ‫ن‬‫ث‬ ‫د‬‫ح‬ ، ‫يل‬ ‫ع‬ ‫ا‬
ِ ِ ‫َس‬
ْ ُ ُْ ُ ْ ْ ُ ُ ْ ُ ْ ْ‫ْ ْ ُ أ‬ ُ ُ
.‫ج ِمهنا‬
َّ ‫م شط َّر ما ُير‬ َّ ‫َيرعوها وله‬َّ ‫ن يعملوها و‬ َّ ‫للاِ صّل للا عليه وسلم خيربَّ إلهيودَّ أ‬ َّ ‫ول‬
َّ ‫رس‬

Reference : Sahih al-Bukhari 2285, 2286

OPPORTUNITY TO EARN A VIRTUAL CHOCOLATE
In the next two ahadith, one of the narrations indicate that advance
payment is allowed. The other indicates that it is not. What is the reason?
 ADVANCE PAYMENT (ِ‫سلَم‬
َّ ‫ – )ال‬NOT ALLOWED

It was narrated that Hakim bin Hizam said: "I asked the Prophet PBUH "O Messenger
of Allah, a man may come to me and ask me to sell him something that I do not have.
Can I sell it to him then go and buy it from the market?' He said: 'Do not sell what
you do not have.'‘’

ْ ْ ْ ُ ُ ْ ْ ُ‫أ‬ ْ ُ ُ‫ُ ْ ُ أ‬
،‫ْب ِحزإم‬ َّ ِ ‫ِيم‬
َّ ِ ‫نع حك‬
َّ ،‫ْبَّ ماهك‬ ِ َّ‫نع َيسف‬ َّ ،‫َب َِّبْش‬ َّ ‫ قالَّ حدثنا أ‬،‫ قالَّ حدثنا هشيم‬،‫ْب أَيب‬ َّ ‫حدثنا ِزي َّد‬
ُ ُ ‫أ‬ ْ ُ ‫أ‬ ُ ‫أ‬ ْ ُْ ْ‫أ‬
ْ ْ ْ
‫ن إلبيعَّ ليسَّ ِعن ِدي أ ِبيع َّه‬ ْ
َّ ِ ‫ل فيسأل‬ ُ
َّ ‫ين إلرج‬ َّ ِ ‫للاِ يأ َِّت‬ ُ
َّ َّ‫ت يَّ رسول‬ ُ
َّ ‫ب صّل للا عليه وسلم فَّل‬ ُ
َّ ‫قالَّ سأل‬
َّ ِ ‫ت إلن‬
ْ ْ ْ ُ ُِ ُ ُ ْ ‫ْ ُ ُ أ‬
. " َّ‫س ِعندك‬ َّ ‫ قالَّ " الَّ ت ِب َّع ما لي‬. ‫وق‬
َّ ِ ‫َ إلس‬
َّ ‫ِمن َّه ثمَّ أبتاع َّه ل َّه‬

Reference : Sunan an-Nasa'i 4613

 ADVANCE PAYMENT (ِ‫سلَم‬
َّ ‫ )ال‬- ALLOWED
Narrated Muhammad bin Al-Mujalid: `Abdullah bin Shaddad and Abu Burda sent me to `Abdullah bin
Abi `Aufa and told me to ask `Abdullah whether the people in the lifetime of the Prophet ‫ ﷺ‬used to
pay in advance for wheat (to be delivered later). `Abdullah replied, "We used to pay in advance to the
peasants of Sham for wheat, barley and olive oil of a known specified measure to be delivered in a
specified period." I asked (him), "Was the price paid (in advance) to those who had the things to be
delivered later?" `Abdullah bin `Aufa replied, "We did not use to ask them about that." Then they sent
me to `Abdur Rahman bin Abza and I asked him. He replied, "The companions of the Prophet ( )‫ﷺ‬used
to practice Salam in the lifetime of the Prophet; and we did not use to ask them whether they had
standing crops or not."

‫ْ أ‬ ْ ْ ُ ُ ‫أ‬ ُ ْ ُ ْ ُ ْ ‫ُ ُ ُْ أ‬ ُ ْ ْ ُ ْ ْ َّ ُ ْ َّ‫حدثنا ُموس‬

َّ ِ ‫ْب أ‬
‫ب‬ ِ
َّ ِ َّ‫َب َبدَِّ ِإىلَّ عب ِ َّد للا‬ َّ ‫ْب شدإدَّ وأ‬ َّ ‫للا‬ِ َّ ‫ن عب َّد‬ َّ ِ ‫ قالَّ بعث‬،‫ب َّإلمجا ِل ِد‬ َّ ِ ‫ْب أ‬
َّ ‫ حدثنا ُمم َّد‬،‫ان‬ِ ‫ حدثنا إلشيب‬،‫ حدثنا عب َّد إلوإ ِح ِد‬،‫ْب ِإَسا ِعيل‬
ُ ُْ ُ ُ ْ ْ ْ ُ ُْ ْ ْ ‫أ‬ ْ ُ ْ ‫أ‬
َّ ‫للا كنا نس ِل‬
‫ف‬ ِ َّ ‫يف إْلِنط َِّة قالَّ عب َّد‬ َّ ِ َّ‫ب صّل للا عليه وسلم يس ِلفون‬ َّ ِ ِ ‫يف عه ِ َّد إلن‬
َّ ِ ‫ب صّل للا عليه وسلم‬ َّ ِ ِ ‫اب إلن‬ ُ
َّ ‫ل َنَّ أْص‬ َّ ‫أ ْوفَّ ـ رىض للا عهنما ـ فَّاالَّ سل َّه ه‬
ُ ُ‫ُ ْ أ‬ ُ ْ ُُ ْ ‫أ‬ ُْ ُْ ‫أ‬ ُْ ْ ْ ‫ْأ‬ ‫أ‬
َّ‫ان ِإىل‬َّ ِ ‫ ثمَّ بعث‬.َّ‫نع ذ ِلك‬ ْ
َّ ‫م‬ ْ ُ
َّ ‫َ َنَّ أصل َّه ِعند َّه قالَّ ما كنا نسأله‬ ْ
َّ َّ‫ت ِإىل‬ ُ
َّ ‫ قل‬.َّ‫ ِإىلَّ أجلَّ معلوم‬،‫يف كيلَّ معلوم‬ َّ ِ ،‫ت‬ ْ
ِ ‫ وإلزي‬،‫ْي‬
ْ
ِ ‫ وإلش ِع‬،ِ‫يف إْلِنطة‬ َّ ِ ‫م‬ َّ ِ ‫ل إلشأ‬ َّ ِ ‫ن ِبيطَّ أ ْه‬
ْ ‫ْ ْ أْ ُ ْ أ ُ ْ ْ أ‬ ُ ُْ ْ ‫أ‬ ُ ُ ْ‫أ‬ ‫ْ ْ أ‬
َّ‫م ال‬ َّ ‫م حرثَّ أ‬ َّ ‫م أله‬َّ ‫ل نسأله‬ َّ ‫ب صّل للا عليه وسلم و‬ ْ
َّ ِ ِ ‫ب صّل للا عليه وسلم يس ِلفونَّ َعَّ عه ِ َّد إلن‬ َّ ِ ِ ‫اب إلن‬ َّ ‫ْب أ ْْبى فسألت َّه فَّالَّ َنَّ أْص‬
ُ َّ ِ ‫ن‬ َّ ِ ‫ع ْب ِ َّد إلرِح‬

Reference : Sahih al-Bukhari 2244

 ANOTHER VIRTUAL CHOCOLATE!
Do we need to make a payment when returning a good (that we
have decided not to buy)?
NO PAYMENT WHEN RETURNING THE PRODUCT THAT DID
NOT MEET THE SPECIFICATION PROVIDED

Narrated 'Aishah R.A.: "The Prophet ‫ ﷺ‬judged that the produce is for the one
responsible.” … As for the meaning of "the produce is for the one responsible,"
he is the man who purchased the slave then the slave produced for him, and
he found some defect in him, so he returned him to the seller. Then the
produce (of his work before return) is the right of the purchaser's. In cases
similar to this, the produce is for the one responsible.

ْ ُُ ُ ْ ُ ْ ْ ‫أ‬ ‫أ‬
‫َتي‬
ِ ‫ل يَّش‬
َّ ‫ان هوَّ إلرج‬
َّ ِ ‫إج ِابلضم‬ َّ ِ ‫ْي إْلر‬
َّ ‫ وتف ِس‬.. . ‫ان‬
َّ ِ ‫ب صّل للا عليه وسلم قضَّ أنَّ إْلرإجَّ ِابلضم‬ َّ ِ ‫ أنَّ إلن‬،‫نع عاِِشة‬َّ ْ
ْ ُْ ْ ْ ْ ْ ‫أ‬ ْ ُ ْ ُ ْ ْ ُ ُ ُ ً ْ ُ ُُُ ْ ْ ْ
ِ ‫ال إلمش‬
. ‫َتي‬ َّ ِ َّ‫َتي لنَّ إلعبدَّ ل َّو هلكَّ هلك‬
َّ ِ َّ‫َ م‬ ِ ‫الغل َّة ِللمش‬َّ ‫َي َّد ِب َِّه عيبا فْيد َّه َعَّ إلبا ِئ ِ َّع ف‬
ِ َّ‫إلعبدَّ فيست ِغل َّه ثم‬

Reference : Jami` at-Tirmidhi 1286

PAYMENT WHEN RETURNING THE PRODUCT THAT DID NOT
MEET THE SPECIFICATION PROVIDED

Narrated Abu Huraira: Allah's Messenger ‫ ﷺ‬said, "Whoever buys a sheep which
has been kept unmilked for a long period, and milks it, can keep it if he is
satisfied, and if he is not satisfied, he can return it, but he should pay one Sa of
dates for the milk."

ُ ‫ْ ْ ْ أْ ُأ‬ ْ ْ ً ‫أ‬ ْ‫أ‬ ْ ُ ُْ ْ‫ْ ُ أ‬ ْ ُ ْ ُ ُ

ِ ،‫ْب زيدَّ أخرب َّه أنه‬
َّ‫َسع‬ َّ ِ ‫ موىلَّ عب ِ َّد إلرِح‬،‫ أنَّ َث ِبتا‬،‫ن ِزيد‬
َّ ِ ‫ن‬ َّ َّ‫ أخربَن‬،‫ حدثنا إلم ِك‬،‫ْب معرو‬
َّ ِ ‫ قالَّ أخرب‬،‫إْب جرْي‬ َّ ‫حدثنا ُمم َّد‬
ً ْ ُ ُ ُ ُ ‫أ‬
‫ن رَّ ِضهيا‬ ْ ْ
َّ ‫ ف ِا‬،‫إِ فاحتلَبا‬ ُ
َّ ‫َن مص‬ ً
َّ ‫َ إشَتَّى غ‬ َّ ِ " ‫للاِ صّل للا عليه وسلم‬ َّ ‫ول‬ َّ ‫ول قالَّ رس‬ َّ َّ‫أابَّ ُهر ْْيَِّ ـ رىض للا عنه ـ ي‬
ْ ‫أ‬
ْ
." َّ‫َ َتر‬ ْ
َّ ِ َّ‫ف حلب َِتا صاع‬
َّ ِ ‫سطها ف‬ِ ‫ن‬ َّ ْ ‫ و ِإ‬،‫أ ْمسكها‬

Reference : Sahih al-Bukhari 2151

WHAT ARE THE BENEFITS OF THIS APPROACH?

QUALITY OF PRODUCTS AND SERVICE

NO UNDUE OPPRESSION ON THE BUYER
PARTNERSHIP

Narrated Jabir bin `Abdullah: The Prophet ‫ ﷺ‬said, "The right of pre-emption is valid in
every joint undivided property, but when the land is divided and the way is
demarcated, then there is no right of pre-emption."

ْ ‫ْ أ‬ ْ ُ ْ ْ ُ ْ
ُ‫ب‬
َّ ِ ‫للاِ ـ رىض للا عهنما ـ قالَّ قَّضَّ إلن‬ ْ
َّ ‫ْب عب ِ َّد‬
َّ ِ ‫اَب‬
َِّ ِ ‫نع ج‬ ْ
َّ ،‫ب سَّلمة‬ َّ ِ ‫نع أ‬ َّ ِ ،‫ حدثنا معمر‬،‫ حدثنا عب َّد إلوإ ِح ِد‬،‫حدثنا ُمسدد‬
َّ ،‫نع إلزه ِر ِي‬
ْ ُ ُُ ُ ُ ُ ُُْ ْ ُْ ْ ُ ْ ُ
.َّ‫ق فاَلَّ شفعة‬ َّ ‫ت إلطر‬ َّ ِ ‫صف‬ َّ ‫تَّ إْلد‬
َّ ِ ‫ود و‬ ِ ‫ ف ِاذإ وقع‬،‫م‬
َّ ‫ل يَّس‬ َّ ِ َّ‫صّل للا عليه وسلم ِابلشفع َِّة ِيف‬
َّ ‫ك ما‬

Reference : Sahih al-Bukhari 2496

 ITEMS THAT ARE NOT SOLD BY WEIGHT OR COUNT CAN BE BARTER-TRADED

ُ ْ ْ ُ ْ ُ ْ ْ ُ ‫أ‬
Narrated 'Abdullah bin 'Umar (ra): I bartered my َّ ِ ،‫ْب خا ِلد‬
‫نع‬ َّ ‫ن‬ َّ ِ ‫ن عب َّد إلرِح‬ َّ ِ ‫ث حدَّث‬ َّ ‫للاِ وقالَّ إللي‬ َّ ‫َب عب ِ َّد‬ َّ ‫قالَّ أ‬
property in Khaibar to 'Uthman (chief of the faithful ُ ْ
‫ْب معرَّ ـ رىض‬ َّ ِ ِ‫للا‬ َّ ‫نع ع ْب ِ َّد‬ َّ ْ ،ِ‫ْبَّ ع ْب ِ َّد للا‬ ْ ‫ال‬َّ ِ ‫س‬ َّ
‫نع‬ ْ ،‫اب‬ ‫ه‬ ‫ش‬ َّ
‫إْب‬ ْ
believers) for his property in Al-Wadi. When we ِ ِ ِ ِ
finished the deal, I left immediately and got out of ْ ً ُْ ُْ ْ ‫ْ ُ ْ أ‬
his house lest he should cancel the deal, for the ‫اال ِابلوَّإ ِدي‬ َّ ‫ْي إلمؤ ِم َِّنيَّ عمْثنَّ م‬ َِّ ‫ت ََِّ أ ِم‬ َّ ‫للا عهنما ـ قالَّ ِبع‬
َّ ْ ِ ‫ت‬ َّ ُ ‫ب َحَّ خَّر ْج‬ َّ ُ ‫ فلما تباي ْعنَّا رج ْع‬،‫ِِبالَّ ل َُّه ِِب ْيرب‬
tradition was that they buyer and the seller had the
option of cancelling the bargain unless they َ َّ ِ َِّ ‫ت َعَّ ع‬
separated. When out deal was completed, I came to ْ ُ ْ ‫ُ ُ أ‬ ْ ْ ُ ْ ‫ْ أ‬ ْ‫ب‬
َّ ِ ‫ايع‬
‫ي‬ ِ ‫ب‬ ‫ت‬
َّ ‫م‬ ‫إل‬ ‫ن‬
َّ ‫أ‬ َّ
‫ة‬ ‫ن‬ ‫إلس‬ َّ
‫ت‬ ِ ‫ن‬ َ ‫و‬
َّ ، ‫ع‬ ‫ي‬ ‫ب‬ ‫إل‬ ‫ن‬
َّ ِ ‫إد‬ ‫ْي‬ َّ
‫ن‬ ‫أ‬ ‫ة‬
َّ ‫ي‬ ‫ش‬ ‫خ‬ ، ِ
‫ه‬ ‫ت‬ ِ ‫ي‬
know that I have been unfair to 'Uthman, for by
ُ‫ت‬ ْ ‫ْ ُ ُ أ‬ ْ ُ ْ ْ
selling him my land I caused him to be in a land of َّ ‫ع وَّبيع َّه رأي‬ َّ ِ ‫للاِ فلما وجبَّ بي‬ َّ ‫ قالَّ عب َّد‬،‫ِابْل ِيا ِ َّر َحَّ يتفرقا‬
Thamud, at a distance of three days journey from
ُ ْ ‫أ ْ ُْ ُ أ ُ ْ ُ ُ أ‬
Al-Madina, while he made me neared to Al-Madina, َّ ِ ‫ث ليالَّ وساق‬
‫ن‬ َّ ِ ‫ض َثودَّ ِبثاَل‬ َّ ِ ‫ن سَّت َّه ِإىلَّ أر‬ َّ ِ ‫ن ق َّد غبنت َّه ِبأ‬ َّ ِ ‫أ‬
at a distance of three days journey from my former ْ
land. (Sahih al-Bukhari 2116) .َّ‫ث ليال‬ َّ ِ ‫ِإىلَّ إلم ِدين َِّة ِبثاَل‬
 CONDITIONS CAN BE PUT IN CONTRACTS
Kathir bin 'Amr bin 'Awf Al-Muzani narrated from his father, from his
grandfather, that the Messenger of Allah ‫ ﷺ‬said: "Reconciliation is allowed
among the Muslims, except for reconciliation that makes the lawful unlawful, or
the unlawful lawful. And the Muslims will be held to their conditions, except the
conditions that make the lawful unlawful, or the unlawful lawful.“

ْ ُ ْ ْ
َّْ ،ُ‫ْب ع ْوفَّ َّْإل ُمز ِن‬
َّْ‫ نع‬،‫نع أأ ِبي ِه‬ ْ
َّ ِ ‫ْب ِرو‬
ْ‫ِ ْ مع‬ ْ
َّ ‫ْب عب ِ َّد‬
َّ ِ ‫للا‬ ُ
َّ ‫ْي‬ ْ ُ ُ
َّ ‫ حدثَّنا ك ِث‬،‫َب عا ِمرَّ إلعَّ ِدي‬ ُ ‫أ‬
َّ ‫ حدثنا أ‬،‫َع إْلاَلل‬ َّ ِ ‫ْب‬ ُ
َّ ‫ن‬ْ ُ
َّ ‫حدثنا إْلس‬
ً‫ال أأ ْ َّو أأحلَّ حرَّإما‬ً ً ُْ ْ ُ ْ ْ ُ ُْ ُ ‫أ‬
َّ ‫ي إلمس َِّل ِميَّ ِإالَّ صلحا حرمَّ حاَل‬ َّ ‫ح جائِزَّ ب‬ َّ ‫للا صّل للا عليه وسلم قالَّ " إلصل‬ ِ َّ َّ‫ أنَّ رسول‬،‫ج ِد ِه‬
ُ ‫أ‬ ً ‫ًأْ أ‬ ً ْ ْ ُ ُ ُ ْ ُ ْ
. َّ‫َب ِعيسَّ هذإ ح ِديثَّ حسنَّ ْصِيح‬ َّ ‫ قالَّ أ‬. " ‫ال أ َّو أحلَّ حرإما‬ َّ ‫م ِإالَّ ُشطا حرمَّ حاَل‬
َّ ‫وإلمس ِلمونَّ َعَّ ُشو ِط ِه‬

Reference : Jami` at-Tirmidhi 1352

 FACTORS THAT DETERMINE
THE VALIDITY OF TRANSACTION
1. Mutual consent except in some situations (when govt asks, when father asks etc.)
2. Buyer and seller must be competent and authorized to sell (child under 7 cannot
give a charity or loan or so on – he can act as an agent for mother or father though
in buying a chocolate or something)
3. Permissible commodities only
4. Commodity must be sold by the owner or his agent
5. The owner should be able to hand over the property to the buyer – you cannot sell a
rented house or birds in the sky
6. The commodity must be well-described visually or orally – option to finalize upon
seeing can be provided
7. The method of transaction and conditions should be in a form permitted by shariah
 FEE FOR A SERVICE IS HALAL
It was narrated that 'Ali said: “I used to
draw water, one bucket for a date, and I
stipulated that they should be good quality,
dried dates.”

‫ُ ْ ُ ْ أ‬ ْ ُ ْ ُ ْ ُ ُ
َّ ِ ‫نع أ‬
‫ب‬ َّ ،‫ حدثنا س َّفيان‬،‫ حدثنا عَّب َّد إلرِح ِن‬،‫ْب بشار‬ َّ ‫حدثنا ُمم َّد‬
ْ ْ ُْ‫ُْ ُ أ‬ ْ ‫ْ أ‬ ْ
ََِّّ‫ت أدلو إلدلوَّ ِبتمر‬َّ ‫ قالَّ َّكن‬،‫َع‬ ِ َّ
‫نع‬ ،‫ة‬ ‫ي‬ ‫ح‬ ‫ب‬
َّ ِ ‫أ‬ َّ
‫نع‬ ،‫اق‬ ‫ْس‬ ‫ِإ‬
ْ ‫أْ ُ أ‬
. َِّ‫ط أّنا جلد‬ َّ ‫َت‬ِ ‫وأش‬

Reference : Sunan Ibn Majah 2447

 TRANSACTION WITH SOMEONE WHOSE
INCOME IS A MIX OF HALAL AND HARAM
3 situations:
Narrated `Aisha R.A.: The Prophet ‫ﷺ‬
If the source of wealth of lender is
purchased food grains from a Jew on credit
unknown: No problem in transaction.
and gave his iron Armor to him as Rihn.
The default position is that it is
considered lawful. ُ ْ ‫أ‬ ْ ُ ْ ‫ُْ أ‬
َّ‫ قَّال‬،‫ حدثنا إلمعش‬،‫ حدثنا عب َّد َّإلوإ ِح ِد‬،‫ْب أسد‬ َّ َّ‫حدثنا ُمعّل‬
ُ ْ‫أ‬
If the person earned from unlawful ْ‫نع‬
َّ ‫ن إلسو َّد‬ َّ ِ ‫م فَّالَّ حدث‬َّ ِ ‫يف إلسل‬ َّ ِ َّ‫ذك ْرَنَّ ِع ْندَّ ِإ َْبإ ِهيمَّ إلر ْهن‬
means: The sin is upon that person and ْ ‫أ‬
ً‫إشَتى طعاما‬ ‫ب صّل للا عليه وسلم‬ َّ ِ ‫عاِِشةَّ ـ رىض للا عهنا ـ أنَّ إلن‬
not the borrower. Fiqhi rule: Change of
ً ُ ‫أأ وره‬
hands means change of ruling. However, َّ ‫ ن َّه ِدرعا‬،‫َ َيُو ِديَّ ِإىلَّ جل‬
.َّ‫َ ح ِ َّديد‬ ْ ِ ْ َّ ْ ِ
if one can refrain, it is closer to piety.
Reference : Sahih al-Bukhari 2068
If the money being given away is the
stolen property: Stay away from it
WHO CAN THE LOAN BE TAKEN FROM?

ْ ً ْ ُ ‫أ‬ ُ ْ ً ْ ‫أ‬
.َّ‫َّوَّرهنهَّ ِدرعا َََِّّح ِديد‬،‫ََّ َيو ِديَّ ِإىلَّأجل‬
َّ ِ ‫أنَّإلن ِبَّصّلَّللاَّعليهَّوسلمَّإشَتىَّطعاما‬

Reference : Sahih al-Bukhari 2068

Dr. Main Alqudah writes:

It is allowed to deal with a Shariah compliant branch in a bank that deals with interest as long as the
actual transaction is allowed such as a profit and loss sharing contract (Mudharabah), partnership
(Musharakah), Murabahah or other financing options that are valid according to Islamic law. These
transactions would not be tainted by the fact that the bank’s funds are from unlawful means. The
Prophet PBUH did business with the polytheists of Makkah and the Jews of Madinah, and in fact, he
even ate from the food offered by the Jewish tribes, fully aware that they engaged in interest.

From: ‘Contemporary Issues Related To Buying Real Estate’ by Dr. Main Alqudah (Director of Islamic Studies
Department, Al-Huda University, Member of the Fatwa Committee, AMJA); Published by: The Assembly of
Muslim Jurists of America
3. ISLAMIC FINANCE SOLUTIONS
ISLAMIC BANKING - JUST FOR MUSLIMS?

• Riba is also prohibited in other religions: (e.g. Exodus 22:25, Leviticus

25:35-36, Deutronomy 23:20, Psalms 15:5, Proverbs 28:8, Nehemiah 5:7
and Ezakhiel 18:8,13,17 & 22:12)
• 50% of customers of Islamic banks are non-Muslims
• 20% growth per year for many years!!
• UK – Hub of Islamic finance in the west
 HOW DO I KNOW THAT THE PRODUCT
I AM USING MEETS THE CRITERIA SET BY SCHOLARS?

• AAOIFI Shariah Council has developed financial standard for Islamic banking
and finance through consultation of 21 top scholars from around the Muslim
world
• Headed by Justice Mufti Taqi Uthmani
MUSHARAKAH

• Bank owns the house (or has other approved controls in place such lein)
• You buy a portion of it every month and pay the rent for the portion that is
not yet yours
• Bank can decide how much to sell each month (in an agreed plan)
• Total price is never changed
 MUSHARAKAH – VARIOUS COMBINATIONS CAN BE MADE

House value: 55,000 House value: 55,000

Rent Purchase Total Rent Purchase Total

Year 0 10,000 0 10,000 Year 0 10000 0 10,000
Year 1 9000 1,000 10,000 Year 1 10000 0 10,000
Year 2 8000 2,000 10,000 Year 2 10000 0 10,000
Year 3 7000 3,000 10,000 Year 3 9000 1000 10,000
Year 4 6000 4,000 10,000 Year 4 8000 2000 10,000
Year 5 5000 5,000 10,000 Year 5 7000 3000 11,000
Year 6 4000 6,000 10,000 Year 6 6000 4000 11,000
Year 7 3000 7,000 10,000 Year 7 5000 5000 11,000
Year 8 2000 8,000 10,000 Year 8 4000 6000 11,000
Year 9 1000 9,000 10,000 Year 9 3000 7000 11,000
Year 10 0 10,000 10,000 Year 10 0 27,000 10,000
 Percentage of purchase in monthly payment (it might
not start from year 1 too) MUSHARAKAH

Years
paid
100%
OPPORTUNITY TO EARN A VIRTUAL CHOCOLATE
Can the bank charge a late payment fee?
What if you can’t pay enough?
What if you are unable to pay any further?
Can the lender increase the rent?
HOW CONVENTIONAL FINANCE WORKS

NORMAL PROCESS:
Principle

Security

(Can be
substituted with Principle +
another security interest
for a fee)
HOW MUSHARAKAH WORKS

NORMAL PROCESS:
Home
purchased in
partnership

Lien

(Or bank’s
ownership) Rent +
Purchase
WHY IS THE TITLE NOT TRANSFERRED IN THE NAME OF
FINANCE PROVIDER?
An excerpt from: https://piperalderman.com.au/insight/taking-security-mortgages-and-security-interests/
Prior to 1863, under Old System title, a mortgage required a borrower to forfeit legal ownership of their land (real property) to a
lender until the loan had been repaid in full (ie. the borrower / mortgagor would transfer the legal title to the lender during the
term of the loan). During the loan term, the borrower only held an equitable interest in the land known as equitable
redemption. Once the borrower had repaid the loan, the lender would execute a transfer of the land back to the borrower, or in
some cases, court orders were sought for the lender to do so. Whilst Old System title was satisfactory, different title deeds could
be drawn up for the same piece of land, causing uncertainty as to land ownership. Often, careful examination of a chain of
deeds, with a minimum period of 30 years, was required to determine the true owner of the land (otherwise known as evidence
of the good root of title to the land).
The transition to a Torrens title system ‘simplified ownership precisely’, as it ensured all interests in the land were recorded on
one title deed for a property, eliminating the need to tediously search the register to evidence a good root of title to the land.
The operation of mortgages under Torrens title system no longer requires the legal title to the land to be transferred from the
borrower to the lender (in the true sense of a “mortgage”). Instead, a Torrens mortgage is simply created as a statutory charge
over the land. In Guthrie V Australia & New Zealand Banking Group (1991)[4], Justice Meagher explained:
“When land is under Torrens title, in view of the Real Property Act 1900, s 57, which provides that a mortgage under that Act has
the effect of a security but does not operate as a transfer of the legal estate in the mortgaged property, a statutory mortgage has
the same effect as a charge would have had if the land were held under common law title”
In doing so, the borrower remains as the legal proprietor of the land but will be prohibited from, among other things, disposing
of the land, leasing, sub-dividing or changing the use of the land without first obtaining the lender’s consent. Once the loan is
repaid, the lender merely discharges the mortgage from the land.
HOW CONVENTIONAL FINANCE WORKS
Late fee,
IN CASE OF DEFAULT: additional interest,
Legal and processing fees
HOW MUSHARAKAH WORKS
Late fee,
IN CASE ONE PARTY WISHES TO SEIZE: additional interest,
Legal and processing fees

Payment of share in property

WHY DO ISLAMIC BANKS BASE THEIR RENTS ON
INTEREST RATES (LIBOR, CASH RATE ETC.)
Let us understand through an example

Lemon Soda
CAN THE BANK ENGAGED IN MUSHARAQAH
INCREASE THE RENT?

• Yes, just like any other owner of a rented house can ask for an increase in rent, the bank engaged in
musharakah can also do that
• What can you do if you are not happy with the increase? You can do what you do in the normal renting
situation
MUDARABAH
Mudarabah – One party (Rab ul
Maal) invests and gives to someone
who uses this fund in a business
activity (Mudarib) to get a pre-
determined percentage (not a fixed
amount) of profit. In case of loss,
the loss is completely of the
investors.

‫ وجوإز هذإ إلعَّد عرف‬- )18‫ ص‬12‫إلمبسوط (ج‬

‫ابلسنة وإالَجاع‬

‫ روى نع ِحيد ْب عبد للا نع‬- )135‫ ص‬5‫إلمغن (ج‬

‫أ‬ ‫أ‬ ‫أ‬
‫أبيه نع جده أن معر ْب إْلطاب أعطاه مال يتيم‬
.‫مضاربة يعمل به يف إلعرإق‬
 IJARAH
• House is bank’s property • Problem: No share of the pie for the
borrower
• Remains as such unless you give rent
for a particular period of time • However, halal
• Then, as a condition, the ownership
transfers to you
MURABAHA
MURABAHA

• Halal except when the condition to purchase becomes binding on the seller

• Is it selling what you don’t already have?

TAWARUQ
• It is considered a heela
• It can be either halal or haram
• If the product is sold back to the
one from whom it was
purchased, it is considered
Eeenah and is haram according to
many scholars

• Fatwa:
https://islamqa.info/en/answers/
98124/tawarruq-via-the-bank-
and-differences-in-fatwas-
concerning-it-from-fiqh-councils-
and-banks-scholars
 DO NOT SELL AT THE PLACE WHERE YOU BOUGHT IT

Narrated Nafi`: Ibn `Umar told us that the people used to buy food from the
caravans in the lifetime of the Prophet. The Prophet ( )‫ﷺ‬used to forbid them
to sell it at the very place where they had purchased it (but they were to wait)
till they carried it to the market where foodstuff was sold. Ibn `Umar said, 'The
Prophet ( )‫ﷺ‬also forbade the reselling of foodstuff by somebody who had
bought it unless he had received it with exact full measure.'

ْ ُ ُْ ‫ُْ ُ أ‬ ُ ‫أ‬ ْ ْ ُْ ُ
ِ
َََّّ‫َتونَّإلطعام‬ ُ َّ ،‫َّحدثناَّموس‬،ِ‫َّحدثناَّأَبََّضر‬،‫حدثنا َِّإ َْبإ ِهيمَّْبَّإلمن ِذ ِر‬
ْ
َّ ‫ ََّّأّنمََُّنإَّيش‬،‫َّحدثناَّإْبَّمعر‬،‫َّنعََّن ِفع‬ ْ ُ ُ
ُ ُُ ْ
َُّ‫وهَّح ْيث‬ ُْ ْ ُ ْ ُ ُ ْ ‫ْ ُ ْ ْ ْ ْ ُُ ْ أ‬ ْ ُْ
‫ََّحََّّينَّل‬،‫ََّينعهمَّأنَّي ِبيعوهَّحيثَّإشَت َّوه‬ َّ ََّ‫هيم‬ ِ ‫بَّصّلَّللاَّعليهَّوسلمَّفيبعثَّعل‬ ِ ِ ‫انََّعَّعه ِدَّإلن‬ ِ ‫إلركب‬
ُ ْ ُ ُ ْ ‫أ‬ ُ ُ ُْ ُ ُ ُ
َّ‫ قالَّوحدثناَّإْبَّمعرَّـَّرىضَّللاَّعهنماَّـَّقالَّّنىَّإلن ِبَّصّلَّللاَّعليهَّوسلمَّأنَّيباعَّإلطعام َِّإذإَّإشَتَّإه‬.‫ام‬ َّ ‫يباعَّإلطع‬
.‫َحَّي ْست ْو ِفي َُّه‬
Sahih al-Bukhari 2123, 2124
SUKOOK

Outside the scope of this workshop

Information on its validity (by Mufti Taqi Uthmani):

https://alqalam.org.uk/wp-content/uploads/2017/07/Mufti-Taqi-sukuk-paper.pdf
CONVENTIONAL INSURANCE
• Two schools:
• School 1: Insurance is haram - because of:
• Gharar
• Unjustly using money of other people
• Delay in payment (cash for cash, hand in hand principle violated)
• Less or more payment than the contribution made by the insure
• School 2: Insurance is halal – because of:
• It is a fee for a service (just like gym fee that people use unequally)
• It is redistribution of risks of many people equally
• Maslahah (especially in West)

Fatawa:
1) https://aboutislam.net/counseling/ask-the-scholar/financial-issues/is-car-insurance-permissible-in-islam/
2) https://www.amjaonline.org/the-question-of-insurance-part-ii/
TAKAFUL

• Evidence: Blood-money for a person in the time of the Prophet PBUH paid by
the tribe after pooling in money

• Whoever needs it can use it

• If money is exhausted, the payment is not made (unless people pool in more
money)

• Manager can charge a fee for managing the funds

• Money can also be invested if the contributing parties agree

OPPORTUNITY TO EARN A VIRTUAL CHOCOLATE
DISCUSSION:
DIFFERENCE BETWEEN CONVENTIONAL AND ISLAMIC
BANKING PRODUCTS
SOME ISLAMIC FINANCE INSTITUTIONS IN
AUSTRALIA • Are they perfect? No, but there are halal options available (in sha Allah)

• Why not?
• Two types of rulings: 1) Rulings under a complete Islamic system;
2) Rulings under the situation when there is a mushaqqah or
impossible to operate as an institution would operate in an Islamic
• MCCA
system
• Amanah Finance • Source of funding: There are no Islamic banks in Australia yet
(which means that they have to borrow money too)
• Meezan Finance
• Hejaz Finance • What approach should these institutions adopt? (Profit-making vs
• ICFAL community service)

• What can you do?

• Support the institutions and help them fix their problems
• Demand for Islamic finance will put pressure on lenders to come
up with Islamic finance options
• Come up with your own institutions