islamic capital market ppt

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CourseIslamic Capital Market & Instruments

By

Dr. Uzair AlbaziAssociate Professor

GIF Uni!ersity" Gu#ran$ala

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P' ()* +,-/)+( 0 Mob' (+(12/,)3311$$$.al4alamfoun5ation.or6

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Islamic Capital Market & InstrumentsC7U89: C7;:;9

opic (1Intro5uction & Purpose of te Course

opic (*

De<nition of Interest =8iba>" ?istory" @erses of ?oly uran"Aa5it

opic (+:conomics" Commerce" Business & ra5e @9

opic ()Ma#or Principles of Islamic :conomics" Commerce" Buss & ra5e

opic (-@erses of ?oly uran" Aa5it" Islamic urispru5ence" erms &Con5itions

3



Islamic Capital Market & Instrumentopic (De<nition of Bankin6" 7ri6in" Dierent ypes & 9ta6es

opic (,

ypes of Con!entional Banks" Banks Businesses" 8ole of Banksin :conomy

opic (3Daily Functions of Con!entional Banks" ypes of Bank Accounts

opic 1(Functions of a oint 9tock Co." Eimite5 Co." 9tock :can6e

opic 11@ie$s of 9colars" Permissible & Proibite5 Functions &Islamic 9olutions

4



Islamic Capital Market & Instrument

opic 1*9tock :can6e" 9tock Market & 9ares

opic 1+Islamic Con5itions For Dealin6 $it 9tocks" 9ares an5 Cos.

opic 1)Banks Financin6" ypes" 9ources

opic 1-9tate Bank 7f Pakistan Circulars

5



Islamic Capital Market & Instrument opic 1 Islamic Mo5es of Financin6" Bai" ypes" Islamic Con5itions

opic 1,Musaraka =Basic 8ules" erms & Con5itions>

opic 1/Muzariba =Basic 8ules" erms & Con5itions>

opic 13

Murabaa" I#ara" 78IGI; =Basic 8ules" erms &Con5itions>

opic *( 9allam" Istisnaa =8ules" Con5itions>

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Islamic Capital Market & Instrumentopic *1Possible 8ole of Islamic Banks in Imports & :ports" @ie$s"

opic **

Can6es" :ects of Islamic Bankin6 on Global :conomy &eir 9olutions

opic*+Insurance" 9olution & Global 9cenario of Islamic Bankin6

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Program Description(Islamic Banking, Capital Market):

Pro6ram Description =Islamic Bankin6" Capital Market & Finance>' The program aims to produce specialists in the discipline, well-versed in both the

conventional banking operations and Shariah-compliant rules in fnancial matters so as tomeet the demands o ast growing markets or Islamic banking and fnance.

e pro6ram pro!i5es' strong oundation in Shariah-compliant Islamic banking and fnance and capital market

practices; analsis o Islamic structured products, regulation and supervision; strong oundation in Islamic !inance, "conomics and Islamic #aw; generates capabilit to concentrate on the ma$or feld o interest, it%s tpes, Trading and it%s

practices in the current market rom Islamic perspectives; develops innovative skills to handle independent pro$ects o Islamic &apital 'arket (

!inance

The aim o the course is to provide in depth knowledge and understanding o Islamic)anking ( !inance Sstem. The course will urther ocus on the current practices inbusiness, Trade and banking and their comparison with Islamic practices. This is a researchoriented course with a purpose o developing ke concepts o Islam in regard to fnance,business, Trade and banking. *t the end o the course, the students will be able todistinguish between Islamic and +n-Islamic fnance, banking ( business practices.

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8eference Books

Islam a anoon2e2i#arat

by Dr. Noor Mohammad ha!ariasas2ul2Ambiya "yed "#laiman Nad$i rt Al Faroo4 %llama "hibli Nomani rt An Intro5uction to Islamic Finances by M#&ti 'ai smani International ra5e" In!estment & Debt Mana6ement

Institute of Bankers" 9BP

Bab2e2Umar *ncyclopedia o& IslamBab2e2Moa$iya bin Abu 9u<yan +++do+++ Bab2e27mar Bin Ab5ul Aziz +++do+++

9



8eference Books Islam a Muasi ;izam

by Dr. Noor Mohammad ha!ari

Imam Abu ?anifa ke 9iyasi Hin5a6i

by "yed Manair %hsan illani Al I4tisaa5 <l Islam =:conomic ou6t>

Dr. %llama M. Ibal rt

8econstruction of 8eli6ious ou6t in Islam +++do+++

uliyaat2e2I4bal =Political & Islamic elfare ou6t> +++do+++ 9ikkay e areek =?istory of Coin>

Dairat #l M#ari&

10



8eference Books

Central Bankin6 by De-Cock

Commercial Bankin6 by Pro&. "ayers

Practice of Bankin6by "heldon 'annan

De!elopment of Islamic Bankin6by "aleh /amal

Callen6es Facin6 Islamic Bankin6by M#na0ar Ibal, %#sa&

11



8eference Books

Circulars of 9tate Bank of Pakistan"BP

9BP Act "BP

Bankin6 Companies 7r5inance "BP

Bankin6 8eco!ery Ea$s "BP

Principles of Islamic Financin6

by Mo#ar /ali& 1'ari#llah

12



8eference Books 9uu5

By An#uman u55am2ul2urJan 9in5" araci

Baisti He$er By Maulana Asraf Ali an!i

ar6eeb2ul2Muslimeen

By Maulana Moamma5 Musa Albazi

. Gulistaan2e2anaaJt By Maulana Moamma5 Musa Albazi

13



8eference Books

?alal & ?aram =sariat ki roosni mei>

By ?a<z Ab5us 9alam Bin Moamma5

MaslaJ 9uu5

Mufti 9a< rt

Islami Bankari i askeel2e2a5ee5

Istia4 Ame5 Faroo4

14



eb 9ites

$$$.statebank.or6$$$.islamcity.com

$$$.islamonline.com

$$$.lariba.com

$$$.islamicbankin6.com

15

http://www.statebank.org/

http://www.islamcity.com/

http://www.islamonline.com/






http://www.islamcity.com/

http://www.statebank.org/



Islamic Capital Market & Instrument

Purpose'

o :liminate 8iba =Interest> base5 an5 Un Islamicransactions from te current Bankin6" :conomics" Financean5 ra5e 9ectors

16



Islamic ra5e & FinanceBusiness by Companions of Propet PBU?'

All Four Calips $ere BusinessmenAsara2e2Mubasirra $ere Businessmen First Muslim Ea5y a5i#a rt $ere a Business $omanAbu Bakr rt a5 a Clot Mill an5 a Go 5o$n 0 $areouse of

clotes at place K9akL near Ma5ina.(re&: Ibn "a-d, 'abaat. 2ol 3, p. 434, 5ikr %b# Bakr rt)

Umer rt use to 5eal $it Persian business community.(re&: M#snad6e6%hmed. 2ol. 4, p. 78 12ol 3, p. 39)

Hubair bin A$am rt use to 5eal in clotes an5 use to 5oimport an5 eport $it 9yria =9aam>(re&: ;ath6#l6Baari. 2ol. 3, p. 87<)

Usman rt use to 5eal in Parca Faroosi(re&: /itab6#l6Ma-ari& by Ibn =#taibah. P. 4>3)



Islamic ra5e & Finance Abu 9u<yan rt use to 5eal in 7il an5 Eeater.

(re&: /itab6#l6Ma-ari& by Ibn =#taibah. P. 4>3)

Abbas bin Ab5ul Muttalib rt use to import fra6rance from

emen.(re&: 'arikh by Imam 'abri. P. 4478)

Amr bin Aas rt an5 Ammara bin alee5 rt use to 5o business5ealin6s $it in6 ;a#asi an5 is Ministers.

(re&: ;ath6#l6Baari, $ol. 3, p. 97>)

9tory of ?azrat Ab5ur 8eman bin Auf rtNN=?e $as ma5e broter of 9a5 bin 8abee Ansari rt.

(re&: B#khari, /itaab6#l6B#yo#, Chp. 4)



Islamic ra5e & FinanceConnection of Mas#i5 an5 Market in islam'

8i6ts of Alla in Mas#i5

8i6ts of ?uman Bein6s in Business Market

Businessmen must a!e stron6 connection $it Mas#i5" ife0se $ants to be puri<e5.

at are Ma#alis2e2HikrO

By Ata bin Abi 8ubaa ra



Islamic ra5e & Finance Islamic ?istory of ra5e & Business'

Propet A5am pbu Propet 9ulaiman pbu (re&: Dairat6#l6Maari& by ;areed ?a@di. 2ol. 8, p. <9A

(Bair#t)

First International Business Centers' Capital 9oor of in65om ain4ia (Net to Bahr6e6oom o& "yrian 'erritory)

en Persian :mpire take o!er. City KBabulL (net to #l& "ea) becomes te Global Business Center.

en 8oman take o!er. (*conomy 0as booming d#ring the time o& /ingBoomi 1 %ghost. Do0n&all started d#ring the time o& "cissor 'abeer. ate/ing 'era@ohn, Mark and Bill tried to strengthen their rip on International

*conomy b#t &ailed) en Arab areas (Makkah d#ring the Ea@@, Madina and 'ai& &or ;arming

Prod#cts) become te Focus an5 te Center of International ra5e5ue to' Peaceful atmospere 8ic Arab Culture 9tron6 8eli6ious feelin6s & Attacments of public for tose areas



Islamic ra5e & Financera!elin6 of ures for Business'

9yria in 9ummer

emen in inter

(e&: "#rah =#resh, F# 3A, s#rah 4A7)

?istory'

ese #ourneys starte5 by 6reat 6ran5fater of Propet Pbu"?asim. 7nce 5urin6 a se!er 5rou6t in Makka. First time" etra!ele5 to Palestine an5 brou6t eat an5 Flour an5 ser!e5 isnation.

en e starte5 tra!elin6 on continues basis to Palestine & 9yria.

(re&: 'arikh by Ibn 'abri. P. 4AG>)



Islamic ra5e & Financeures ra!elin6 to oter Areas'

Africa

:6ypt 9u5an In5ia Iran (Persia)8ome

ures means Businessman 9ecurity issues0measures of tese Cara!ans Custo5ians of aaba Belon6s to 9piritual Ean5 1((2+(( Guar5s Abu 9u<yan Cara!an =1(( 6uar5s *-(( camels loa5e5 $it

mercan5ise 6oo5s $ort of -("((( 6ol5 coins>



Islamic ra5e & Finance:ports of Makkans'

EeaterAnimals 9kinsDates8aisons

Imports of Makkans' Fra6rances =emen> 9pices =In5ia & Africa>?erbal Pro5ucs =In5ia & Africa>eat =9yria & Palestine> 9ilk =Cina>

Clotes =A5an> Eabor" 9la!es" Army =Africa>?ouse Decoration Items =9yria & :6ypt> In5ustrial Pro5ucts like 9ilk" Cotton" rea5" @el!et Clotes

=8oome>Military :4uipments" 7il =9yria>Gol5" Gol5 mie5 9an5" :lepant eet =Africa>



Islamic ra5e & Finance

Arab0ures Business reaties'

Muaa5at2e2:laaf (%greements o& peace 1 Protection) $itnei6borin6 tribes & nations.

First reaty $as ma5e by ?asim bin Ab5 Munaaf bin usa$it te 9cissor =aisar> of 9yria. 7n te $ay back" e alsoma5e Muaa5at2e2:laaf $it e!ery nation" e passe5 by.

After te 5eat of ?asim" is tree broters Ab5 9ams"Muttalib an5 ;oufal rene$ tose a6reements as $ell as

ma5e more Business reaties $it oter kin6s like' Ab5 9ams ma5e a Business reaty $it in6 of ;a#asMuttalib ma5e a reaty $it te Eea5ers of emen;oufal ma5e a reaty $it te in6 of Persia.




Coins'

Dinar' 8oman Dinar" ?ira4ali Dinar an5 Bazinteni Dinar

Diram' ibri Diram" Ba6li (Persian) Diram

(?t. 4A, 48 1 8A =irats)

?umari Coins' ;o 5etails a!ailable in te istory



Islamic ra5e & Finance9cales to measure'

Dinar' to ceck te $t of Dinar

Diram' to ceck te $t of Diram 9aeer' it $as e4ual to 10( of 5iram

74iya' it $as e4ual to )( 5irams

;u$aat' it $as e4ual to - 5irams

Mis4aalQ e4ual to ** irat" :6yptian

mis4aal $as e4ual to *) irat8italQ e4ual to 1* 74iya

;as' e4ual to *( 5iram




=8eferences'>

Futu2ul2Bal5an" Bilazri. P. ), Mu4a5ima" Ibn ul5on" Cp )"

:ncyclope5ia of Islam" !ol +" Cp. Makka

A6ni5es" ;.P.' Muamma5an eories of Finance. ;e$ ork"131" p. *)



Islamic ra5e & FinanceBusiness ransaction 0 Dealin6s 5urin6 ailiyat'

Bai Munabaza

Bai MulamasaBai ?ibl2ul2?iblaBai 9uf4aBai Mua4alaBai MuzabanaBai Musarrat

Bai UrbaanBai BaksBai MuztarBai2ul2aali bil kaaliBai Gurar



Islamic ra5e & Finance7r6anize5 Business Markets'

It $as starte5 by Calip Mansoor Abbasi Market of Fra6rance Market of Black 9mits

Market of Carpenters Market of Clotes Market of Meat

2 At te ime of Fatimees" More a55itions $ere ma5e like' Market of Cickens

Market of Pet Bir5s Market of 9$eets Market of ra!elin6 ba6s an5 Be5s Market of Fruits Market of 9oes an5 Eeater Items Market of Gol5 (more than 4AA shops in each market)




:ac market $as facilitate5 $it'

$o $ays traRc an5 t$o lanes 8oa5s

?otels Eo$er portion to keep te lu66a6e of Passen6ers Upper to 8esi5e & 8est

:ac Market $as Controlle5 by a Mutassib("#per$isor)




Cea4ue'

It $as starte5 as a me5ium of ecan6e 5urin6 tetime of Calip ?aroon 8asee5

(e&: %l Eiar6#l6Islamia, $ol. 8, p.

347633A)



Islamic ra5e & FinanceMa#or Principles of Business in Islam'

A4ee5a 0 Belief'

:!erytin6 Belon6s to Alla @erses of ?oly urJan Aa5it of Propet pbu

All Muslims are like Broters

@erses of ?oly urJan Aa5it of Propet pbu

9oft ?eart in Business @erses of ?oly urJan Aa5it of Propet pbu




Free5om in Business'

;o 8estrictions in 5oin6 ?alal Business

9tate Ea$s applie50 impose5 for te bene<t of Public

@erses of ?oly urJan

Aa5it of ?oly Propet pbu



Islamic ra5e & FinancePrinciples of Islamic Business A6reement'

Ability

Mutual Un5erstan5in6 an5 A6reementMutual 9upport an5 ?elp

7be5ience to Alla an5 ser!ice to ?umanity


Aa5it of ?oly Propet Pbu



Akaam2ul2BuyuDe<nition of Bai'

Dealin6 0 :can6e of 6oo5s

Buyin6 & 9ellin6

8ukun'

It means part of any 5ealin6 or Item. Deal canJt be

possible $itout 8ukun.



Akaam2ul2BuyuArkaan 0 Con5itions of Bai'

I#aab2o2ubool

('his is the only #k#n according to %hnaa&. 'he remaining three

are Conditions b#t the rest o& Imams considered the remaining

three as %rkaan also)

"eegha (0ordings o& I@aab6o6=#bool)

%ideen (parties o& making deals like b#yer 1"eller)

Maood %laih (Prod#ct or "amanPrice)



Akaam2ul2Buyu'he last three had t0o types each:

"eegha (it co#ld be)

I@aab =#bool

%aid "eller

B#yer

Maood %laih oods Prod#ct Item

"aman (Price)



Akaam2ul2BuyuCon5itions of ose 9i Arkaans'

I#aab2o2ubool & 9ee6a

or5in6 of I#ab2o2ubool like =I sol5 0 or I bou6t>. =Pastense is must>" or any oter form of mutual a6reementpreferable in $ritin6.

Eistenin6 0 8ea5in6 of te a6reement statement is must.

Cancellation of one si5e5 can be 5one before te meetin6

is o!er.

I#aab2o2ubool of all MabeeJa $ill be applicable untilclari<e5.

7ne si5e5 cancellation is not allo$e5 after te 5eal is <nal.



Akaam2ul2BuyuA4i5een (B#yer 1 "eller)

Muture 0 A5ult

iseitout Makra (;ree ?ill)

2erses o& Eoly =#r-an

%hadith o& Eoly Prophet Pb#h



Akaam2ul2BuyuBai Makra (Bai by ;orce):

De<nition

Masail

A45 ul#iJa (Bai %manat Protection)

De<nition 0 Details



Akaam2ul2Buyu

Ma4oo5 Alai

It as t$o types'

Mabeea 9aman =Price>

Con5itions of Mabeea' :istence of 6oo50pro5uct0item 7$nersip ?alal Pro5uct Pro5uct must a!e a price in te market ualities" uantity an5 Details of MabeeJa must be

clearly 5e<ne5



Akaam2ul2BuyuCon5itions of 9aman'

Price 0 9aman must be clearly mentione5

=Cas or Cre5it are allo$e5 in Islam but payment 5atemust be clari<e5 in Cre5it terms>

9aman must be ?alal" if recei!e5 in sape of 6oo5s

Mo5e of ecan6e must be mentione5 clearly especiallyin international transactions & Businesses like U9 S" GBPoun5s" 8iyals etc>



Akaam2ul2Buyu ypes of Bai'

I#ab2o2ubool

It as four 5ierent types

Bai ;a<z 0 Bai atJee

Bai Mau4oof 0 Bai Masroot

Bai Fasi5 0 Bai ;a4iz

Bai Batil



ypes of BaiBai ;a<z or Bai atJee'

If te possession is takin6 ri6t after te I#ab2o2ubool"it is calle5 Bai ;a<z.

Bai Mau4oof or Bai Masroot' If te <nal 5eal =I#ab2o2ubool> is con5itione5 by te

permission of a tir5 party" ten tis Bai is !ali5 an5 calle5Bai Masroot.

Bai Fasi5 or Bai ;a4iz' If te Bai is con5itione5 until te possession of te

MabeeJa is 6i!en" ten tis Bai is calle5 Bai Fasi5. 7r Ifone party puts a con5ition" $ic is not normally use5 inte market is calle5 Bai Fasi5. :26' I $ill make tis 5ealonly" if you 6rant me arz2e2?asana etc.

Bai Batil'Bai of any ?aram Pro5uct. But it is 7 for ;on Muslims



ypes of BaiMabeeJa'

It as four 5ierent types' Bai Mu4ayiza'

Bai of :can6in6 Goo5s $it Goo5s =Barter 9ystem>. In

tat case" one $ill be te MabeeJa" oter $ill be 9aman. Bai 9araf'

Bai of :can6e of Currency $it Currency. ein5i!i5uals of tis Bai are calle5 K9arraL. =e26>' Money:can6ers.

Bai 9alam'

Anoter name of tis Bai is KBai 9allafL. A Bai in $icte A5!ance payment is taken for MabeeJa" $ic $illbe pro!i5e5 in te future.

Bai Mutla4' en any pro5uct is sol5 on cas to cas or cas to

cre5it" it is calle5 Bai Mutla4.



ypes of BaiPrice or Business Pro<t or Eoss'

Bai Musa$ama' Cas 9ale

Bai Murabaa' 9ale on 5isclose5 pro<t

Bai auliya' Cost on Cost 9ale ( No ProHt)

Bai Al HaiJa' 9ale on Eoss basis



I;:8;AI7;AE 7@:8@I:

Global 8esearc :stimations'

;umber of Islamic Institutions' +((

Islamic Deposit Pool U9S (( B.

Islamic Assets Pool U9 S +- B

Islamic Financial In!estments U9S 3(( B

("#kk#k, M#t#al ;#nds, ';Cs, etc.)

A!era6e Annual Gro$t 8ate ran6es bet$een *(2*-T

;umber of Countries ' )/

47



I;:8;AI7;AE 7@:8@I:

MA78 C7U;8I:9 ?A@I;G I9EAMIC BA;I;GI;9IUI7;9

MU9EIM C7U;8I:9

Barain" u$ait" UA:" 9au5i Arabia" Iran" Malaysia"Brunei" In5onesia" 9u5an" :6ypt" Ban6la5es &Pakistan.

;7; MU9EIM C7U;8I:9

U9A" U" Cana5a" 9$itzerlan5"Australia" Germany an59ri Eanka

48



I;:8;AI7;AE 7@:8@I:

MA78 I;:8;AI7;AE C7;@:;I7;AEBA;9 ?A@I;G I9EAMIC I;D79'Citibank A;H Grin5lays

AB; Amro?9BC 9au5i American Bank 9au5i Britis Bank American :press 9tan5ar5 Cartere5

P Mor6an

49

Cont/d…



De!elopments in 9BP'?as alrea5y announce5 a sceme in anuary *((+ for

openin6 of Islamic Banks" subsi5iary or 5e5icate5Islamic Bankin6 Branc.

:stablisment of an Islamic Bankin6 Department. Forme5 9aria Boar5.8ecently announce5 issuance of Bank Eicenses only to

Islamic Banks" ence" no ne$ license sall be allo$e5to Con!entional Bank

?as prepare5 :ssentials as 9tan5ar5s an5 A6reements

to be use5 by Islamic Financial Institutions =IFIs>.Go!ernor 9BP imself appro!es issuance of Eicenses

for Islamic Bankin6 Brances.

50

ISLAMIC BANKING IN

PAKISTAN



7!er!ie$ of te Dierences bet$een

Islamic Banks an5 Con!entional Banks. 1> Con!entional Banks borro$s fun5s from te 5epositors

payin6 interest on te liability si5e of te its balance seet.

Islamic Banks makes Partnersip" Mu5araba or Pro<t &Eoss sarin6 arran6ements bet$een te bank an5 te5epositors.

*> Con!entional Banks len5s te fun5s to te borro$erscar6in6 i6er interest on te asset or te in!estmentsi5e.

Islamic Banks arran6es Musaraka or te tra5e base5<nancin6 arran6ements =Mu5araba> bet$een te bank &its in!estment clients.

51



7!er!ie$ of te Dierences bet$een

Islamic Banks an5 Con!entional Banks +> ere is iron2$all bet$een te con!entional banks an5 teir

5epositors.

Islamic Bank entitles te 5epositors'

2o be informe5 of $at te bank 5oes $it teir money.

2o a!e a say in $ere tere money $ill be in!este5.

)> e interest or te return in pre5etermine5 or <e5 in a5!ance

In Islamic bankin6" te pro<t or te return is base5 on te actualin!estment outcome.

-> In Con!entional bankin6" transactions are <nancial asset base5.

In Islamic Bankin6" transactions are real asset base5.

52



9ources of Islamic Bankin6Ma#or 9ources'

?oly urJan

?a5it =9unna>

I#ma of Ummat

Fi4 =Islamic urispru5ence>

53



8iba

=Interest>

54

O’ Ye Who Believe, Fea !o" Allah and leave #hateve i$

!o" %i&a, i! 'o( ae )t(e* &elieve$+

)AlBa-aah. 01*

Ti"e o! %evelation.

Ahadith o! Po2het Pea3e Be 42on 5i".



8IBA=Interest>

55

6The intee$t #hi3h 'o( 7ive to in3ea$e the #ealth o!2eo2le, #ill have no in3ea$e #ith Allah. B(t that #hi3h

'o( la' o(t !o 3hait', $ee8in7 !avo o! Allah )5e #ill

in3ea$e*. it i$ the$e #ho #ill 7et a e3o"2en$e

"(lti2lied+9

Ar Rum 39 (First Revelation)



8IBA=Interest>

KBecause of teir abuse" $e forba5e te e$s 6oo5 tin6s

$ic $ere formally allo$e5 to tem' because time aftertime tey 5ebarre5 oters from te pat of Alla' 9ince teypractice 8iba altou6 tey $ere forbi55en an5 ceat otersof teir possessions. e a!e prepare5 a painful torment fortose of tem $o 5isbelie!e.L

%n Nisa 47A6474 ("econd e$elation)

56



8IBA=Interest>

57

6O’ &elieve$, devo( not %i&a, do(&lin7 it$ ate "an' ti"e$+

Fea Allah, and 'o( #ill 2o$2e+9

Al-e-Imran 130 (Third Revelation)



8IBA=Interest>

58

Tho$e #ho devo( %i&a $hall i$e (2 &e!oe Allah li8e "en #ho"

Shaitan ha$ de"ented &' hi$ to(3h. !o the' 3lai" that tadin7 i$

li8e ($('+ B(t Allah ha$ 2e"itted tadin7 and !o&idden ($('+ 5e

that e3eive$ an ad"onition !o" hi$ %a&& and "end$ hi$ #a'$ "a'

8ee2 #hat he ha$ alead' eaned. hi$ !aith i$ in the hand o! Allah+

B(t he that 2a'$ no heed$ $hall &e a"on7 the 2eo2le o! !ie and

$hall e"ain in it !oeve+9

Al-Baqarah 27 (Fourth Revelation)



8IBA=Interest>

59

6Allah ha$ laid 5i$ 3($e on %i&a and &le$$ed 3hait' #ithin3ea$e+ 5e &ea$ no love !o the (n7ate!(l $inne$9

Al-Baqarah 27! (Fourth Revelation)



8IBA=Interest>

60

6O 'o( #ho &elieve, Fea Allah and 7ive (2 #hat e"ain$ o! 'o(

de"and !o intee$t, i! 'o( ae indeed a &elieve+ I! 'o( do not, then

'o( ae #aned o! the de3laation o! #a !o" Allah and 5i$

Me$$en7e, B(t i! 'o( t(n &a38 'o( $hall have 'o( 2in3i2al+ :eal

not (n;($tl' and 'o( $hall not &e dealt #ith (n;($tl'+9

Al Baqarah 27"-279 (Fourth Revelation)



8IBA=Interest>

Al2Ba4ara *,/2*,3 If you are in5ee5 belie!ers' Pro!e your claim $it your 5ee5s

an5 actions.L

reat in te stron6est $or5s' ;ot use5 for any oter crime.L

Principle amount soul5 be pai5 back.

Islam empasis on #ustice' Deal not un#ustly an5 you sall notbe 5ealt $it un#ustly.

After te re!elation of tis !erse" Propet =9A> in is lastsermon at ?a##at2ul2a5a" $ic is calle5 te carter 0 blueprint of Islam" 5eclare5' Interest claim in respect oftransactions 5urin6 te 5ays of i6norance are null an5 !oi5 an5$oul5 not be claime5. o be6in $it" $e fore6o te entireinterest amount 5ue to my uncle Abbas bin Ab5ul Muttalib =rt>

61



8IBA=Interest>

at is 8iba'

8iba means any ecess compensation o!er an5 abo!ete principal $ic is $itout 5ue consi5eration. ItJs a

premium pai5 to te len5er in return for is $aitin6 as acon5ition for te loan.

In te $or5s of Propet =9A>" by Ali Ibn Abi alib.

*$ery loan that dra0s interest is iba.J

*$ery Premi#m paid o$er and abo$e the oan is ibaJ

62



8IBA=Interest>

8iba 9electe5 Aa5it

By ?azrat abir ibn2e2Ab5ulla =8>' e Propet peacebe upon im" curse5 te recei!er an5 te payer of

interest" te one $o recor5s it an5 te $itnesses to tetransactions an5 sai5" Key are all alike =in 6uilt>.L

(M#slim, 'irmidhi and M#snad6e6 %hmad)

2 By ?azrat Abu ?urayra =8>' e Propet peace be

upon im" sai5" 8iba as se!enty se6ments" te leastserious bein6 e4ui!alent to a man committin6 a5ultery$it is o$n moter.L

(Ibn Ma@ah)

63



8IBA=Interest>

8iba 9electe5 Aa5it

By ?azrat Amr bin Al Aas =8>' ?hen interest based

dealing becomes common among people, they 0ill start&acing dra#ght and shortage o& &ood. %nd 0hen briberybecomes norm among people they 0ill li$e #nderconstant &ear o& their enemy.J

By ?azrat Abu ?urayra =8>' e Propet peace be upon

im sai5" 'here 0ill certainly come a time &or mankind 0hen

e$eryone 0ill take iba and i& he does not do so, itsd#stsmoke 0ill reach him.J (%b# Da0ood, IbnMa@ah)

64



8IBA=Interest>

e proibition of interest is not limite5 to Islam"

but it is sare5 by u5aism an5 Cristianity.

9ome of te ol5 testaments a!e ren5ere5 8iba as ?aram.

=9ee :o5us **'*-" Ee!iticus *-'+-2+" Deutronomy *+'*("Psalms 1-'-" Pro!erbs */'/" ;eemia -', an5 :zakiel1/'/" 1+"1, & **'1*>

A6ibi Bank $as establise5 circa ,(( B.C in Babylonian an5functione5 eclusi!ely on e4uity basis.

65



8IBA=Interest>

?a5it proibitin6 8iab2al2Fa5l =By Abu 9aee5 u5ri=8>

9ell 6ol5 in ecan6e of e4ui!alent 6ol5

9ell sil!er in ecan6e of e4ui!alent sil!er 9ell 5ates in ecan6e of e4ui!alent 5ates

9ell $eat in ecan6e if e4ui!alent $eat

9ell salt in ecan6e of e4ui!alent salt

9ell barley in ecan6e of e4ui!alent barley

(eported in M#slim)

66



8IBA

De<nitions'

Imam Abu Bakr assaas 8azi =rta>'

Ktat kin5 of loan $ere speci<e5 repayment perio5an5 an amount in ecess of capital is pre5etermine5.L

9ummary'

2 KAll con5itional bene<ts on loan falls in te cate6ory of=8iba> interestL

67



P:9 7F 8IBA

Al2;asa =Al2;asiJa> or 8iba2al2ailiya

Al2Fazal or 8iba2al2Bai

8iba Al2Mufra5 =9imple Interest>'

KInterest calculate5 only on te initial in!estmentL

8iba Al2Murakkab =Compoun5 Interest>'

K8ein!estment of eac interest payment on moneyin!este5 to

earn more interest.L

68



P:9 7F 8IBA Interest (Commercial Interest):

KInterest pai5 on loan taken for pro5ucti!e an5 pro<tablepurpose.L

Usury ("araH Interest):

Interest paid on loan taken &or personal needs andepenses.J

69



P:9 7F 8IBA:26' Commercial 8iba'

Dealin6 of Banu Amar & Banu Mu6ira (by Mohammad Ibn Farir rt, Fami #l Bayaan, $ol: 7)

Commercial Eoans by te lea5ers of Banu 9a4eef (Imam "ay#ti rt, %l D#ril Mansoor, $ol: 4, P: 377)

8iba of te Uncle of Propet peace be upon im" Abbas rt5ue on Banu 9a4eef an5 oters

(Imam "ay#ti rt, %l D#ril Mansoor)

Interest Base5 Eoan of Usman rt an5 Abbas rt to a

Mercant. 7n teir 5eman5" Propet peace be upon imforba5e tem to 5o so. (Imam Bagh$i rt, 'a&seer, $erse K 8G68>)

Partnersip of Abbas rt an5 ali5 bin alee5 rt in abusiness an5 teir 5ealin6 $it Banu 9a4eef of aif.

(/hain, 'a&seer, $ol: 4, P: 88)



8ibaime of 8e!elation'

Inci5ent of Banu 9a4eefJs family Banu Amar bin Umair=Aamir> & Banu MakzoomJs family Banu Mu6iraNNN

(Mohammad Ibn Farir ra, Fami #l Bayan an 'a-0eel il =#r-an, 2:7, p: 88683)

op Eea5ers of Banu 9a4eef in!ol!e5 in 8iba' Masoo5 rt" 8abeJa rt" ?abib rt" Ab5 ya Eail rt

Accor5in6 to Ab5ulla Bin Abbas rt"@erse V' *,/ of 9ura Al2Ba4ara $as re!eale5 about tose

lea5ers of Banu 9a4eef.



8IBA=Interest>

Al2Ba4ara *,/2*,3 If you are in5ee5 belie!ers' Pro!e your claim $it your 5ee5s

an5 actions.L

reat in te stron6est $or5s' ;ot use5 for any oter crime.L

Principle amount soul5 be pai5 back.

Islam empasis on #ustice' Deal not un#ustly an5 you sall notbe 5ealt $it un#ustly.

After te re!elation of tis !erse" Propet =9A> in is lastsermon at ?a##at2ul2a5a" $ic is calle5 te carter 0 blueprint of Islam" 5eclare5' Interest claim in respect oftransactions 5urin6 te 5ays of i6norance are null an5 !oi5 an5$oul5 not be claime5. o be6in $it" $e fore6o te entireinterest amount 5ue to my uncle Abbas bin Ab5ul Muttalib =rt>



8iba

?in5 Bint Utba & $ife of Abu 9ufyan rt Eoan from Bait ul Maal'

9e ma5e a re4uest to Umer rt to len5 er )((( =Diram orDinnar> from Bait ul Maal for business Purpose. Calip Umer rtaccepte5 er re4uest an5 allo$e5 to len5 er tat amount.

('abri, 'areekh #l mmam 0al Malook (rd#), $ol: 3, P: 8)

Inci5ent of t$o sons of Umer rt =Ab5ulla & Ubai5ulla rt>' ey!isite5 Ira4 for ia5 an5 on te $ay back" Abu Musa Asari rt=Go!ernor of Basra> 6a!e tem some amount to 5eposit into te

Bait ul Maal of Ma5ina on teir $ay back. ey ma5e a Business$it it an5 ma5e some pro<t as $ell. Umer took all pro<t fromtem but upon te opinion of oter 9aaba" alf of te pro<t$ere 6i!en back to tem an5 te rest alf $as 5eposite5 in teBait ul Maal.

(Imam Malik, %l Matta, P: 8G<)



8iba=#r-an strickly &orbids all kinds o& IB%

:amples'

e$s of Ma5ina

AnsarJs 5ealin6s of interest $it e$s for a6riculturalpurposes

Mercants of Makka

74



8iba

Muslim ilafa

Eoans from Bait2ul2Maal

Business 5ealin6s of 9aabas amon6 temsel!es

75



Islamic ra5e & FinanceMa#or Principles of ra5e (Bai >'

Free $ill bet$een buyer & 9ellerCooperation & 9oli5arity bet$een bot parties

:4ual opportunities to 6ain pro<t for bot buyer an5 seller9er!ice to ?umanity

Ma#or Principles of 8iba (Interest):

Con<rme5 Pro<t for a len5er an5 cances of 8isk of Eoss forte borro$er only.Acceptance base5 on 9el<sness an5 takin6 a5!anta6e by

te len5er but acceptance is base5 on elplessness an56rief.

Eack of Cooperation bet$een parties.



8ibaEA9 B AEMIG? AEEA?'

urJanic Ea$s & Principles'

( Interest, lottery, gambling, #nla0&#l b#sinesses and

prod#cts)

Aa5it of Propet peace be upon im

("#nnah actions, dealings)

Moral 8esponsibilities for a Muslim("er$ices to E#manity 1 &oc#s to0ards the s#ccess in the0orld herea&ter)

77



I9EAMIC BA;I;G

?istory'

Hubair bin A$am rta

Usman bin Aan rta

Bait2ul2Maal

Cara!ans of Makka

Imam Abu ?anifa

78



Eoan & rust

Dierence bet$een'

Eoan =arz>

&

Amanat =rust>

Con5itions of A4a5 0 A6reement of arz

79



Bank Accounts

W Current Account 0 Ceckin6 Account

PE9 Account 0 9a!in6s Account

Fie5 Deposit Account 0 PE9 Fie5 Account 0 CDs

Forei6n Currency Account

Eockers

80



Islamic Bankin6

Islamic Point of @ie$ about 5epositin6 money into toseAccounts

81



:conomics

at is :conomicsO

Ko utilize te limite5 resources in a $ay tat maimumnee5s

an5 $ants are met to ensure te $ell bein6 of allmembers of

te uman society.L

82



:conomicsProblems Face5 by :conomy'

Determination of Priorities

Allocation of 8esources (land, abor, Capital, *ntreprene#r)

Distribution of ealt 0 Income

De!elopment

e $ill compare o$ Capitalism" 9ocialism an5 Islamic:conomic 9ystem a55resses to teseproblems.

83




(Problem A4) Capitalism

:!ery In5i!i5ual as anuncon5itional an5 absolute

ri6t to participate in anybusiness to maimizepro<ts.

Concept of sel<s interest.

9upply & Deman5 $ill5etermine te priorities.

9ocialism

;o in5i!i5ual as te ri6tto participate in any

business in5epen5ently.

9tate $ill 5etermine tepriorities as per te o!erall

plannin6.

Concept of collecti!einterest.

84



Allocation of 8esources

(Problem A8)

Capitalism

Market force $ill 5eci5e

$ere to in!est resources.

9ocialism

Go!t. $ill 5eci5e $ere to

allocate resources

85



De!elopment

(Problem A3)Capitalism

Market forces $ill 5eci5e

9ocialism

Go!t. $ill 5eci5e

86



Distribution of Income

(Problem A9)Capitalism

Ean5 2 8ent

Eabor 2 a6es Capital 2 Interest

:ntrepreneur 2Pro<t

9ocialism

Ean5 8ent <e5 by Go!t.

Eabor a6es <e5 byGo!t.

87



8i6t to ealtCapitalism

8i6t to $ealt is $it tefactors of pro5uction only

9ocialism

8i6t to $ealt $it teGo!t. $ic ten5istributes it amon6 tefactors of pro5uction

88



Fla$s of Capitalism;o bin5in6s 0 restrictions $ile maimizin6 pro<ts.

Blin5ly follo$s market forces tat creates eploitation oflabor an5 poor people.

;o moral !alues limitations

Monopolies are create5 tat eploit te society as a $ole.

Go!t. & In5ustrialists #oin an5s for mutual bene<ts an5make la$s tat eploit common people.

Imbalance in te 5istribution of Income 5ue to $icconcentration of $ealt takes place.

89



Fla$s of 9ocialisme oter etreme of not e!en 6i!in6 te natural

free5om.

Perfect plannin6 is assume5 to be te KCure of all illsL.

Go!ts. are assume5 to be te an6els $ic canJt commita 5eliberate mistake.

Can not $ork $itout a forceful 5ictatorsip.

Creates o!erall ineRciency in te society. ere is noincenti!e to $ork eRciently as tere is no in5i!i5ual

pro<t moti!e.

90



:conomicsCapitalism'

Free5om of business

Ea$ of supply & Deman5 elps

8esources =lan5" labor & capital> $ill be use5

Competition $ill force to impro!e" create an5 6ainmaimum.

Distribution of $ealt amon6 pro5ucers of $ealt only

=la$ of supply & 5eman5 $ill elp to 5eci5e teir sare>

91



:conomicsPro5ucer of ealt'

Ean5 $ill 6et 8ent

Eabor $ill 6et a6es

Capital $ill 6et Interest

7$ner $ill 6et Pro<t

92



:conomics9ocialism'

;o Free5om

;o Pri!ate 7$nersip

Go!t. $ill 5eci5e about

Allocation of 8esources


Distribution of Income

De!elopment

KIt is also calle5 Planne5 :conomyL

93



:conomicsPrinciples'

Collecti!e Property

Plannin6

Collecti!e Interest

:4uitable 5istribution of Income

94



:conomics Islam'

:!erytin6 belon6s to Alla

Pri!ate o$nersip is accepte5

9ome restrictions applie5 to run your economy

Ea$ of supply & 5eman5 is accepte5

95



:conomics 8estrictions'

?alal & ?araam =trou6 ai>

=Interest" 6amblin6" lottery>

9tate 8estrictions

=9mu66lin6" 5ealin6 in any restricte5 business etc>

Moral 8estrictions 0 8esponsibilities

96



:conomicsDirect Pro5ucer of ealt'

Ean5 8ent

Eabor a6es

Capital =;ot Interest> Pro<t & 8isk of Eossrou6 Musarika & Mu5airiba

7$ner Pro<t or Eoss

97



:conomics If e!erytin6 belon6s to Alla" ten ?e 5eci5es to sare your

$ealt $it oters =teir ri6t> trou6'

Hakaat

iraa#

Usr

9a5a4a

aara

9acri<ce 0 urbaani

irasaat

98



9ummary of te ComparisonCapitalism' 6i!es unbri5le5 an5 un con5itional ri6t

to pro<t moti!e an5 pri!ate o$nersip.

9ocialism' 6oes to oter etreme by assumin6 tat perfect

plannin6 by te Go!t. is te cure of all ills.

Islam' 6i!es a balance !ie$ amon6 te t$o etremesby reco6nizin6 te ri6t to pri!ate o$nersip" market forcesan5 pro<t moti!e but te restrictions of'

2?alal & ?aram 2Go!t. restrictions 2Moral !alues

Islam ensures e4uitable 5istribution of $ealt trou6 teconcept of primary o$nersip of Alla an5 secon5aryo$nersip of factors of pro5uction.

99



ermsDe<nitions'

Bai

MabeeJa

9aman

a5ar

Price

I#ab

100



erms arka

Dain

Ma5yun

DaiJin

Muzarib

8ab2ul2Maal

8aJsul Maal

101



Islamic Concepts Ee6al Person

9ares

Un5er ritin6

Eimite5 Company

ick Back

8oll 7!er

Eibor 0 ibor

102



ypes of Bai

(according to $alidity)De<nitions'

Bai 9ai

Bai Batil

Bai Fasi5

Bai Mau4oof

103



Islamic 9ales ContractBai 9ai =@ali5 9ale>'

A sale is !ali5 if all elements to6eter $it teircon5itions are present

:lements of a !ali5 sale are'

Contract =A45> 9ub#ect Matter =MabeeJa>

Price =9aman> Possession or 5eli!ery =abza>

104



Islamic 9ale Contract

Possession

(Qabza)

Price

(Saman)

Subject

Matter

(Mabeea)

!"#

($ontract)

%ai Sa&i&

('ai# Sae)

105



Islamic 9ales Contract:lements of Bai 9ai =@ali5 9ale>'

Contract =A45>' 7er & Acceptance =I#ab2o2abool>

7ral =auli> Implie5 =?ukmi>

Buyer an5 9eller must be' 9ane A5ult 0 Muture

ise

Con5itions of Contract' 9ale must be non contin6ent 9ale must be imme5iate

106




9ub#ect Matter =MabeeJa>

:istin6 @aluable Usable Capable of o$nersip 0 title Capable of 5eli!ery 0 possession

9peci<c & uanti<e5 9eller must a!e title & risk

107




Price =9aman>

uanti<e5 =Maloom>

9peci<e5 & Certain =MutaJiyan>

108




abza =Deli!ery 0 Possession>

Pysical =?a4i4i>

Constructi!e =?ukmi>

109



Basic 8ules of Bai

=buyin6 0 sellin6>;obo5y can sell suc Pro5uct 0 Commo5ity $ic'

Does not eist

;o o$nersip

;ot in te possession

;ote' :ceptions are' =1> Bai 9alam =*> Bai Istisna

110



9ale A6reement

2 Dierence bet$een Actual 9ale & Promise of 9ale

111



More 8ules of Bai

W Bai must be on uncon5itional basis & implemente5 ri6ta$ay. If te sale of any pro5uct is attace5 $it a con5itionof any future inci5ent or 5ate" it $ill not be !ali5.

Bai must be 5one of suc pro5uct $ic as a !alue0price inte market

Bai of a pro5uct is not permissible" $ic as no use oter

tan ?aram

112



More 8ules of Bai

Pro5uct must be i5enti<e5" clear $it all 5eman5in6 4ualities

9ellin6 pro5uct must be 6i!en in te possession of buyer. Itsoul5 not be base5 on any inci5ent" stru66le etc.

Price of te pro5uct must be clearly mentione5 an5 i5enti<e5

ere soul5 be no unusual con5ition in Bai oter$ise

it $ill not be !ali5

113



Mo5es of Financin6Musaraka

Mu5ariba

Murabaa

I#ara =Eease or ?ire>

I#ara a I4tina =?ire2Purcase>

Bai 9alam

Bai Istisna

114



Mo5es of Financin6

Musaraka'

It is te same <nancin6 contract as Mo5araba ecept tat

client also pro!i5es a part of capital in a55ition tomana6ement participation. 7n te oter an5" Islamic bankmay also contribute in te mana6ement in a55ition to itscapital. In tat case" mana6ement fees an5 5istributablepro<t form te enterprise are sare5 by te client an5Islamic Bank in accor5ance $it ratios <e5 un5er teMusaraka contract.

115



Mo5es of Financin6

Mo5ariba'

Mo5ariba is a contract bet$een an Islamic Bank an5 te

client $ereby te Islamic bank pro!i5es speci<c amount offun5s to te clients for an enterprise for 5e<ne5 purposesin ecan6e for a reasonable an5 i6ly pre5ictable pro<t.e client recei!es a sare in te pro<t as compensation orfee for is mana6ement.

116



Mo5es of Financin6Murabaa'

Un5er tis 5eal" Islamic Bank purcases 6oo5s" ra$material" e4uipment" macinery or any oter items of

economic si6ni<cance from a tir5 party at te re4uest of aclient an5 sells suc 6oo5s to te client on spot or 5eferre5payment basis at it s o$n sale price. e 5ierencebet$een te purcase cost of te Islamic bank an5 te saleprice to te clients forms te pro<t calle5 KMark UpL.

117



Mo5es of Financin6 I#ara =Eease or ?ire>'

e bank ac4uires macinery 0e4uipment" buil5in6 etc foris client an5 car6es a certain rental for teir use.

I#ara a I4tinaa =?ire2Purcase>'

e bank <nances te purcase of e4uipment an5 teclient uses tem un5er a contract. e contract pro!i5es

tat te client $ill pay te cost of te instrument an5 asare in te net rental !alue of te e4uipment $ic isproportional to te outstan5in6 sares in te totalin!estment.

118



Mo5es of Financin6

Bai 9alam'

9eller un5ertakes to supply speci<c 6oo5s to te buyer 0

bank at a future 5ate in ecan6e of an a5!ance5 price fullypai5 at te spot of a6reement.

W Purpose'

2o meet te nee5 of small farmers $o nee5 money to6ro$ teir

crops an5 to fee5 teir family up to te time of ar!est.

2o meet te nee5 of tra5ers for import an5 eport of 6oo5s.

119



Mo5es of Financin6W Bai IstisnaQ

e Bank enters into an a6reement $it te client forpurcase of any 6oo5s before it comes into eistence.

It is an or5er to pro5ucer to manufacture a speci<ccommo5ity for te purcaser.

120



Con5ition for a @ali5 DealCon5itions for Islamically @ali5 Dealin6'

All0bot parties must a!e te ability of 5ealin6

Deal must be 5one $it free $ill

;o intention of ceatin6 0 frau5

;o false statement

121



Con5itions for Musaraka Dealin6. All 6i!en ) con5itions must be applie5" Also

Pro<t ratio for eac party must be 5eci5e5 in te be6innin6of a6reement

Pro<t sarin6 ratio must be base5 on te percenta6e ofactual outcome of te business" not on te basis of actualin!estmentJs percenta6e

122



Pro<t 9arin6 8atio of

Musarika' Is it necessary to a!e te pro<t sarin6 ratio accor5in6to te actual in!estment ratioO

Ans' ree 7pinions'

Accor5in6 to Imam Malik rt" Imam 9a< rt" it soul5 beaccor5in6 te in!estment ratio.

Accor5in6 to Imam Ame5 rt" it coul5 !ary" if it is 5eci5e5$it a free $ill of all parties.

Accor5in6 to Imam Abu ?anifa rt" it coul5 !ary ecept tesleepin6 partner.

123



Eoss 9arin6 8atio

of Musarika

Accor5in6 to all Imams" loss sarin6 ratio of eacpartner

must be e4ual accor5in6

to te percenta6e of teir in!estment.

124



Dissol!in6 Musaraka

Any party can 5issol!e te Musaraka a6reement by 6i!e

notice to te oter party.

Upon te 5eat of any partner.

If a partner is not in sane anymore =for lon6 time>

125




Desireable Business'

Musarika'

Muzariba'




Con5itions of Musarika'Partners must 5o te I#ab2o2uboolMusarika must be 5one in eistin6 an5 acceptable

currencies. If it is in sapes of commo5ities06oo5s" ten teprice estimation =appraisal> of tose 6oo5s must be ma5e inte be6innin6 of te a6reement.

Accor5in6 to Imam 9a< rt" all kin5s of 6oo5s 0 commo5ities 0currencies must be mie5 up completely to a!oi5 confusion.In tat case" e!erybo5y $ill be careful in te business inspen5in6" an5 $ill not tink0$orry of is sare of in!estment.

Accor5in6 to Imam 9arkasee rt" it is a con5ition for anA6reement" tat it must be in $ritten form $it all an5 clear5etails to a!oi5 confusion an5 problems in te future.

?oly urJan'

7J Belie!ers" $en you make any 5eal of Eoan for somecertain time" $rite it 5o$n. (%l Baarah, 8: 8G8)




ypes of Musarika =Partnersip>'

9irkat2e2Mufa$aza 9irkat2e2Annan

9irkat2e29anaJi 9irkat2e2u#oo

9irkat2e2Mufa$aza'

It is tat type of Partnersip" $ere all te partners aree4ual in sarin6 in!estment" sarin6 businessresponsibilities" 9arin6 Pro<t & Eoss etc.

(In %rabic, M#&a0aah means e#ality)




9irkat2e2Annan' If any or all te partners are not e4ual in sarin6business in!estment" Business 8esponsibilities" Pro<t & Eoss 9arin6 ratio"ten tis type of partnersip is calle5 9irkat2e2Annan. In tis type ofpartnersip" e!ery partner is consi5ere5 te akeel of oter but notafeel.

:26' eac partner $ill take te business responsibilities an5 $ill 5o is #ob

but $ate!er 5ecisions ?e09e makes $ile runnin6 tis business liketakin6 loans" makin6 5eals =buyin6 0 sellin6>" etc. ?e $ill be all aloneresponsible for it unless a6ree5 by oters or base5 on unanimous5ecisions.

9irkat2e29annai' =Company>" tat type of partnersip $ere t$o or fe$businessmen of similar business run teir businesses $it collaboration 0 #ointly on te basis of partnersip an5 sare teir ratio of Pro<t & Eoss.

It is also calle5 9irkat2e2a4abbul. It means t$o same businessprofessionals ma5e partnersip on a con5ition tat bot of tem $ill 5ote same #ob an5 $ate!er pro<t 6aine5 $ill be sare5. It is also calle59irkat2ul2Ab5aan.




9irkat2ul2u#oo'

A partnersip base5 on te 6oo5$ill 0 trust of in5i!i5uals"not base5 on any sare of in!estment. ey 5o businessonly on cre5it basis base5 on teir 6oo5$ill in te market.All partners must be e4ual in sarin6 Pro<t & Eoss.Dierent ratio of Pro<t is not allo$e5.

It is also calle5 9irkat2uz2Haman an5 9irkat2ul2Mufalees




Muzariba' Muzaribat is a type of business $ere one partypro!i5es te full in!estment an5 te oter pro!i5es itJsprofessional business ser!ices an5 te pro<t sare is 5i!i5e5$it mutual un5erstan5in6.

is $or5 KMuzaribatL came out from $or5 KHarbunL. Itmeans stepin6 on 6roun5" $alkin6 etc. In tis business"Muzarib $alks on te 6roun5 for oter" tatJs $y e is calle5Muzarib an5 tis business is calle5 Muzariba. 9ome Imamscall it KarraazL.

?oly urJan'

An5 tere are some people" $o $alks on te 6roun5 =eart>an5 seek te pro!ision =8iz4> of Alla.

("#rah M#ammil, Chp: 8>: 2: 8A)




Purpose'

Muzariba is allo$e5 to re5uce te 6ap bet$een poor an5ric. An in5i!i5ual" $o is <nancially stron6 but canJt run tebusiness eiter because of a!in6 no time" or no eperience

or no a$areness of te market. 7n te oter si5e" tere arein5i!i5uals" $o are <nancially not stron6 but !ery skille5an5 eperience5 in some certain business. 9o tey can takete in!estment from ric an5 run te business.

Islam as allo$e5 tis type of business for te bene<t ofpoor & ric" skille5 & non skille5.

Anoter $is5om bein5 it is" Money $ill al$ays becirculate5 in te market. Public $ill take more economicalbene<ts in sape of a!in6 more #obs opportunities"i6er competition an5 lo$er prices of te pro5ucts etc.




Muzariba by Propet pbu'

Propet pbu 5i5 tat form of business $it a5i#a rt

Goo5s $ere taken to te market of Busra =9yria>

A6ree5 pro<t sarin6 ratio $ere -(T for eac.

9la!e Maysera $ere #oine5 as an Au5itor

9aaba rt 5i5 tat kin5 business in teir time as $ell.

All Imams an5 scolars consi5er it one of te mostfa!orable business of Islam.




Con5itions of Muzariba'

8ab2ul2Maal must make all te in!estment in cas forme!en 6oo5s are pro!i5e5.

In!estment must be pro!i5e5 by 8ab2ul2Maal only.7ter$ise it $ill be counte5 partnersip =Musarika>.




Autorities & 8esponsibilities of Muzarib' In!estment of 8ab2ul2Maal is like an Amanat =rust> $it

Muzarib. erefore" if loss occurs in te business" 8ab2ul2Maal canJt 5eman5 for te reco!ery of is in!estment fromMuzarib.

In Muzariba" te position of Muzairb is like te custo5ian of

te in!estment of 8ab2ul2Maal. erefore" e is al$aysboun5 to take te su66estions" a5!ice" permission of 8ab2ul2Maal in makin6 5ecisions.

Muzarib is not allo$e5 to take any salary from te business.If e is tra!elin6 outsi5e" e is allo$e5 to take te 5ailytra!elin6 $a6es 0 allo$ance an5 oter cost etc. Accor5in6to Imam Abu ?anifa" e is also allo$e5 to take me5ical

car6es from te business in case of sickness.Muzarib $ill 6et is pro<t sare only. If e crosses is limits

of te a6ree5 a6reement of Muzariba" e $ill beresponsible0liable for all loss0liabilities.

Muzarib $ill al$ays 5i!i5e te sare of te pro<t in tepresence of 8ab2ul2Maal. It is te opinion of all Imams.




Cancellation of Muzariba'

Accor5in6 to Imam Abu ?anifa rt an5 Imam 9aif rt.'

Muzariba can be cancele5 any time #ust by 6i!in6 anotice to te oter party.

It can be cancelle5 at te 5eat of any partner. if teineritors $ant to rene$ or continue tis a6reement" it

is allo$e5 in Islam.



MUHA8IBA?

Features of Muzariba'

In!estment from =one party> 8ab2ul2Maal only.

;o participation in business or mana6ement

All loss must be suere5 by 8ab2ul2Maal only.

8ab2ul2Maal must carry all liabilities of Business

All assets $ill be te property of 8ab2ul2Maal

137



MUHA8IBA?

MUHA8IBA? AE MUAIDA?' 2In!estment for a speci<e5 business only

MUHA8IBA? AE MUAEEAA?'

2Free option to 5o any business

138



MUHA8IBA?

;7:'

All four Imams a6ree tat no salary $ill be 6i!en to Muzaribon is0er ser!ices.

Accor5in6 to Imam Ame5 rt" compensation for 5aily foo5allo$ance can be 6i!en.

Accor5in6 to Anaf" compensation for 5aily foo5 can be6i!en only"

if te Muzarib tra!els out of to$n.

139



Murabia

Features'

Basically" itJs not a mo5e of <nancin6 but a source to a!oi5interest 5ealin6. It soul5 be use5 only $ere Musaraika

an5 Muzariba not $orkable.

ust usin6 te name of KMark UpL or pro<t instea5 ofinterest 5oes not make it permissible until all te termsan5 con5itions set by Islamic urispru5ence are ful<lle5.

140



Murabia

ItJs not a type of loan but a 5eal =Bia0A6reement>.

Murabia can be use5 as a source of <nancin6 only$en te client nee5s fun5s to purcase anypro5uct0macinery0e4uipments etc.

e pro5uct $ic is 6i!en on Murabia basis must bein te possession of o$ner.

141



Murabia

9arin6 of risk of loss 5ierentiate Murabia from teinterest cate6ory.

It is important for a Murabaa 5ealin6 tat te pro5uctmust be bou6t from a tir5 party. 7n buy back basis"Murabia 5eal $ill not be !ali5.

8oll 7!er is not !ali5 in Murabia.

If te actual cost can not be i5enti<e5" ten Murabia5eal is not possible. In tat case" $e must use BaiMusa$ama.

142

Murabia(%greement)



(%greement)

$ient %an*

(!+reement)

Pro#uct Pocession

%, %an*

%an* $ient

(-ea) .iabiit, o/ $ient

%an* a*ee (!+reement)

a*ee Seer (-ea)

143

Murabia(%greement)



(%greement)

$ient

%an*

%an*

a*ee

a*ee

%an*

a*ee

Seer

%an*

$ient

144



ypes of Bai

Bai 9alam'

It is also calle5 Bai 9alaf. In tat Bai" MabeeJa ispromise5 to be pro!i5e5 on future 5ate an5 $olepayment $ill be taken in a5!ance.

Deman5in6 ualities must be mentione5 clearly to a!oi5confusion05isputes.

@erse of ?oly urJan

?a5it of ?oly Propet pbu



ypes of Bai

Bai 9alam =Cont> Con5itions'

Con5ition of A45'

8i6t of iyar is not allo$e5. If somebo5y uses it" it$ill makes K9alamL Batil.

Con5itions of :$az'

$o Cate6ories

Con5itions of 8aJs2ul2Maal (7 conditions) Con5itions of Musallam Fee (4A conditions)



Akaam2ul2Buyu

Con5itions of 8aJs2ul2Maal (7 conditions):

ins =nature> of 8aJs2ul2Maal must be kno$n. :26' $eter it$ill be in cas" or Maal an5 ten te 4uantity also etc.

Biyan2e2asam e26' mo5e of Payment like in U9 S" 8s." 8iyalsetc

Biyan2e29ifat' e26' uality of Me5ium of :can6e like ;e$ 0Fres coins of 6ol5 or sil!er. is con5ition use to eist inearly a6es" $ere bot kin5s of coins $ere useable in temarket.

uantity of Commo5ity must be kno$n.

e26' 1(( ba6s of eat or -(( 5ozens oran6es or bananasetc.

otal Price09aman of eac commo5ity

Eump 9um payment in A5!ance at te time of A6reement.



Akaam2ul2Buyu

Con5itions of Musallam Fee =commo5ity>' (4Aconditions)

ins of Musallam Fee must be kno$n. :26' eat"Cotton" Dates" 7il etc.

ype of Pro5uct must be i5enti<e5. :26' :6yptian cotton"Australian $eat" Pakistani $eat" 9au5i Dates or PakistaniDates etc.

uality must be i5enti<e5' e26' A cate6ory or B"uantity must be i5enti<e5. :26' in $ei6t" in 5ozens" in

sacks etc.Date of Deli!ery =minimum 5eli!ery time" is one mont>

(e&: %lM#heeth)



Akaam2ul2Buyu

e commo5ity for $ic te Bai 9alam is 5one" musteist in te market or ouses bet$een te 5ate ofA6reement an5 te Deli!ery.

Musallam Fee must be te pro5uct" $ic can bepro5uce5.

=e26> $eat" cotton" etc

Musallam Fee must be te pro5uct $ic can or nee5to be measure5" $ei6te5" counte5 etc.

If tere is any in!ol!ement of transferrin6 cost inMusallam Fee" te Eoa5in6 or stora6e place must be

kno$n.;o illat of a5ar an5 ins soul5 eist in ecan6e of

commo5ities. 7ter tan te ecan6e of currency 0cas" it is acceptable.



Akaam2ul2Buyu

Musallam Fee =cont>'

;ote' If te 9alam commo5ity is presente5 on time an5

$it all 5eman5in6 4ualities" ten te purcaser as nori6t to refuse it.



Akaam2ul2Buyu

Can6es in MabeeJa before Possession'

' If a purcaser $ants to resell a commo5ity0pro5uctbefore 6ettin6 itJs possession" is it permissibleO

Ans' ere are t$o in5s of MabeeJa'

Mo!eable =e26> Fruit" eat" Garments etc

;on Mo!eable =e26> ?ouse" Ean5" Property etc



Akaam2ul2Buyu

Mo!eable Goo5s'

=1>. If MabeeJa consists of tose items $ic aretransferable

from one place to anoter ten te =resale> Bai of tesekin5 of

Pro5ucts is not allo$e5.

?a5it'

It is narrate5 by Ab5ulla Bin Umar rt tat Propet pbuas forbi55en of resellin6 6oo5s on te spot $ere it $aspurcase5. (%b# Da0ood, /itab6#l6Biyo#)



Akaam2ul2Buyu

=*> Anoter lo6ic of itJs proibition is' In case of loss or

5ama6e to MabeeJa" tere is a cance of cancellationor re#ection of Bai. :26' if te 6oo5s are lost or5ama6e5 in te possession of <rst purcaser before6i!in6 possession to te secon5 purcaser" ten teBai $ill be consi5ere5 !oi5. atJs $y it is proibite5to resell it before 6ettin6 te full possession.

(re&: %l Eidaya, Chp. /itab6#l6B#yo#)



Akaam2ul2Buyu If te 6oo5s are in $ei6t or in sacks etc" an5 te purcaser 6ets itJs

possession" ten te resale is allo$e5 after $ei6tin6 it properly.is la$ speci<cally $orks in te 5ealin6 of eat & oter crops etc.

?a5it'

Accor5in6 to te ?a5it of Propet pbu" ?e as proibite5 teresellin6 of crop $itout re measurin6. =$ei6t a6e of seller & ten$ei6t a6e of purcaser for resellin6>

("#nnan Ibn Maa@a, /itab6#l6B#yo#)

If te 6oo5s are purcase5 $it proper 6uesture" ten teconsumption is allo$e5 before itJs measurin6 in $t. because in tat

case" te ecess $ill be te ri6t of purcaser. :26' if Mr. A.purcases a eap of eat for 8s. 1((( $it an estimate5 $eat of1(( 6. ten before re measurin6 it" consumption in it is allo$e5.Because any increase or 5ecrease of 4uantity $ill be te property ofpurcaser. ?e as purcase5 te eap of $eat" not eactly 1(( 6of $eat.



Akam2ul2Buyu

If MabeeJs is suc a commo5ity $ic nee5s to be counte5 inunits =e26> :66s" Fruits" clotes etc" in tat case consumption isallo$e5 accor5in6 to Imam Abu ousef an5 Imam Moamma5 rt.But Imam Abu ?anifa $ants it to counte5 a6ain for consumption.

;on Mo!eable Goo5s'

;on mo!eable 6oo5s like ?ouse" Property" Ean5 can be resol5

before 6ettin6 itJs possession an5 can be rente5 out as $ell.=is is accor5in6 to Imam Abu ?anifa an5 Imam Abu ousefrt>.

Imam Moamma5 rt is an opinion of takin6 possession <rst.



I#ara

Features'

Eessor stays as o$ner an5 te lessee as te ri6t to usete item06oo5.

Eeasin6 is not permissible for consumable 6oo5s.

Eessor $ill be responsible for all liabilities relate5 to tatproperty06oo5 etc like taes. Eessee $ill be responsible fortose liabilities only" $ic can be use50bene<te5 $ile

usin6 tat 6oo50item etc. like Bills" etc.

156



I#ara

8isk of loss of tat property06oo5 $ill stay $it lessor. IfEessee is responsible for any Eoss05ama6e" e0se as toaor5 it.

Eeasin6 ime" Duration" 8ent etc must be 5eci5e5 in tebe6innin6 of te contract.

Eessor canJt increase te percenta6e0sare of rent by

imself.

157

9alam



9alam

Con5itions'

It is necessary to pay te lump sum amount in tebe6innin6 of Bai 9alam contract.

9alam is permissible only on tose items $ic can be4uanti<e5 or measure5.

9alam is not !ali5 for a speci<c farm0lan506ar5en etc.

e pro5uct must be i5enti<e5" 4uanti<e5 clearly $it all4ualities.

e 5ate of 5eli!ery" time" an5 te place must bementione5 clearly.

158

Istisna



Istisna

Features'

;ot necessary to pay te amount in A5!ance like Bai 9alam

Price must be 5eci5e5 in te be6innin6 of te contract

ualities" features of tat pro5uct must be clearlyi5enti<e5

159



Istisna

Cancelin6 Istisna'

one party can cancel te Istisna 5eal by 6i!in6 notice to teoter before startin6 pro5uction0purcasin6 etc

if te pro5uction0$ork as alrea5y starte5" ten it canJt becancelle5 from one si5e.

160

Dierence bet$een



Dierence bet$eenIstisna & 9alam

Istisna

Istisna is permissible for anyitem 0 commo5ity $ic nee5to be pro5uce5 0 manufacture5.

In Istisna" a5!ance payment isnot necessary.

W In Istisna" it coul5 be cancelle5"if te pro5uction is not starte5yet.

Date" ime of 5eli!ery 5oes nota!e to be <e5.

9alam

W But in 9alam" it coul5 orcoul5 not be. 7r 9ub#ectcan be anytin6.

W In 9alam" it is necessary tomake full payment ina5!ance.

W In Bai 9alam" it can not becancelle5 one si5e5.

W In 9alam" it is te basicpart of te 5eal.

161



Pro#ect Financin6

Propose5 Meto5s'

Musarika Mu5ariba

Basic Principles'

Financin6 trou6 Musarika an5 Mu5ariba 5oes notmean te a5!ancin6 of money. It means participation in tebusiness in te case of Musarika" sarin6 in te assets ofte business to te etent of te ratio of <nancin6.

An In!estor must sare te loss incurre5 by te business tote etent of is <nancin6.

e partners can 5etermine $it mutual consent any ratio ofpro<t $ic may 5ier from te ratio of in!estment. ?o$e!erte partner $o as eclu5e5 imself from te responsibilityof $ork for te business cannot claim more tan te ratio ofis in!estment.

162



Pro#ect Financin6

Pro#ect Financin6'

If te <nancier $ants to <nance te $ole pro#ect" teform of Mu5ariba can come into operation.

If in!estment comes from bot si5es" te form ofMusarika can be a5opte5. In tis case'

If te mana6ement is te sole responsibility of oneparty" $ile te in!estment comes from bot" a

combination of musarika an5 Mu5ariba can bebrou6t into play accor5in6 to te rules.

9ince it $oul5 be a ne$ pro#ect" no problem $it re6ar5to te !aluation of capital soul5 arise.

163



Pro#ect Financin6

e 5istribution of pro<ts accor5in6 to te normal accountin6stan5ar5s is not 5iRcult.

If te <nancier $ants to $it5ra$ from te Musarika" $ilete oter party $ants to continue te business" te later canpurcase te sares of te former at an a6ree5 price. In tiscase" te <nancier may 6et back te amount e as in!este5alon6 $it a pro<t" if te business as earne5 a pro<t.

e price of is sare $oul5 be 5etermine5 trou6 !aluationof te assets calle5 as constructi!e li4ui5ation $it mutual

consent of te parties.

In te case of loss" o$e!er any 5ecrease in te total !alue ofte assets $oul5 be 5i!i5e5 bet$een tem in te ratio ofteir in!estment.

164



Pro#ect Financin6

9ince <nancial institutions 5o not normally $ant to remainpartner of a speci<c pro#ect for 6oo5" tey can sell teirsare to oter partners of te pro#ect.

If te sale of te sare on one time basis is not feasible forte lack of li4ui5ity in te pro#ect" te sare of te <nanciercan be 5i!i5e5 into smaller units an5 eac unit can be sol5after a suitable inter!al.

ene!er a unit is sol5" te sare of te <nancier in te

pro#ect is re5uce5 to tat etent" an5 $en all te units aresol5" te <nancier totally comes out of te pro#ect.

165



Import Financin6

Import Financin6'

Con!entional Banks car6e t$o types of fee for teser!ice of letter of cre5it $ic te bank pro!i5e5 to te

importer. ey are'

9er!ice Car6es for te openin6 an EC

Interest car6e5 on te ECs not opene5 on full mar6in.

166



Import Financin6

Collectin6 ser!ice car6es for tis purpose is allo$e5" butas interest cannot be car6e5 in any case" scolars a!epropose5 t$o meto5s for <nancin6 ECs.

ese meto5s are'

Musarika

Morabia

167



Import Financin6

Musarika'e appropriate substitute for EC is Musarika. Bank an5importer can make an a6reement of Mu5arba or Musarika$ile openin6 EC. If EC is bein6 opene5 at zero mar6in ten ana6reement of Mu5arba can be ma5e" in $ic bank $illbecome 8abb2ul2maal an5 importer $ill be re6ar5e5 as Mu5arib.

Bank $ill o$n te 6oo5s tat are bein6 importe5 an5 pro<t $illbe 5istribute5 accor5in6 to te a6reement.

If EC is bein6 opene5 at some mar6in ten Musarikaa6reement can be ma5e. Bank $ill pay te remainin6 amountan5 te 6oo5s tat are bein6 importe5 $ill be o$ne5 by bot of

tem accor5in6 to teir sare of in!estment. Bank an5 importer"$it teir mutual consent can also inclu5e a con5ition in tea6reement" $ereby" Musarika or Mu5ariba $ill en5 after acertain time perio5 e!en if te 6oo5s are not sol5. In tis case"importer $ill purcase te bankJs sare at te market price.

168



Import Financin6

Murabia'

At present Islamic banks are usin6 Murabia to <nanceEC. ese banks temsel!es import te re4uire5 6oo5s

an5 ten sell tese 6oo5s to te importer on Murabiaa6reement. Murabia <nancin6 re4uires bank an5importer to si6n t$o a6reements separately. 7ne for tepurcase of 6oo5s an5 oter for appointin6 te importeras te a6ent of te bank =tat is a6ency a6reement>.7nce tese t$o a6reements are si6ne5" importer canne6otiate an5 <nalize all te terms an5 con5itions $it

te eporter on bealf of te bank.

169

Murabia(%greement)



$ient

%an*

%an*

a*ee

a*ee

%an*

a*ee

Seer

%an*

$ient

170



:port Financin6

$o important roles of bank in :ports'

ey act as a ne6otiatin6 bank an5 car6e a fee for tispurpose $ic is allo$e5 in 9aria.

ey pro!i5e eport <nancin6 facility to te eportersan5 car6e interest on tis ser!ice.

ese ser!ices are of t$o types'

Pre 9ipment Financin6Post 9ipment Financin6

171



:port Financin6

Pre 9ipment Financin6'

Pre 9ipment Financin6 can be ful<lle5 by t$o meto5s'

Musarika

Murabia

Musarika'

Bank & :porter can make an a6reement of Musarikaor Mu5ariba" if eporter is not in!estin6" oter$iseMusarika a6reement can be ma5e. A6reement in tiscase $ill be easy" as cost an5 epecte5 pro<t is kno$n.

:porter $ill manufacture or purcase 6oo5s an5 pro<ttat $ill be obtaine5 by eportin6" $ill be 5istributebet$een tem accor5in6 to te pre 5etermine5 ratio.

172



:port Financin6

Problem'

If te eporter is not able to 5eli!er te 6oo5s accor5in6 tote terms an5 te con5itions of te importer ten importercan refuse to accept te 6oo5s an5 in tis case eporterJsbank $ill ultimately suer.

9olution'it can be recti<e5 by inclu5in6 a con5ition in Mu5ariba orMusarika a6reement tat if eporter !iolates te terms an5con5itions of import a6reement ten te bank $ill not beresponsible for any loss $ic arises 5ue to tis ne6li6ence.

'his condition is allo0ed in "hariah as the abb#l Maal is not responsible &or any loss that arises d#e to the negligenceo& M#dharibJ.

173



:port Financin6

Murabia'Murabia is bein6 use5 in many Islamic Banks for eport

<nancin6. Banks purcase 6oo5s tat are to be eporte5 at5iscounte5 =less> price tan te a6ree5 price bet$een teeporter an5 te importer. Bank eports 6oo5s at teori6inal price an5 tus can earn pro<t.

Murabia Financin6 re4uires bank an5 eporter to si6n atleast t$o a6reements separately.

7ne for te purcase of 6oo5s 9econ5 one for appointin6 te eporter as te a6ent of

te bank

7nce tese t$o a6reements are si6ne5" te eporter canne6otiate an5 <nalize all te terms an5 con5itions $it teimporter on bealf of te bank.

174



:port Financin6

Post 9ipment Financin6'

It is similar to te 5iscountin6 of Bill of :can6e. Itsalternate 9aria compliant proce5ure is as follo$s.

:porter $it Bill of :can6e can appoint bank as isa6ent to collect recei!able on is bealf. Bank car6esa fee for tis ser!ice.

Bank can pro!i5e interest free loan to te eportere4ual to te amount of bill an5 eporter $ill 6i!e isconsent to te bank tat it can keep te amountrecei!e5 from te bill as a payment of loan.

175



:port Financin6

?ere t$o proce5ures an5

t$o 5ierent a6reements $ill be ma5e.

7ne $ill autorize te bank to collect te loan on isbealf as an a6ent" for $ic e $ill car6e a fee.

9econ5 $ill be for pro!i5in6 interest free loan to teeporter an5 autorizin6 bank for keepin6 te amountrecei!e5 trou6 bill as a payment for loan.

is meto5 is !ali5 in 9aria because'

collectin6 fee for ser!ice an5 6i!in6 interest free loan ispermissible in Islam.

176



Eoan 0 Cre5it

Eoan 0 Cre5it'

Business is al$ays in nee5 of 6i!e an5 take of loan or cre5it5ealin6s. Accor5in6 to Islam" tere is no room for car6in6interest on Eoans. Because poor & $eek $ill al$ays be in

nee5 of some fa!ors from eac oter an5 it is not allo$e5to take te a5!anta6e of some oneJs nee5

Islam as set fe$ instructions for bot Een5er & Borro$er'

Instructions 0 eacin6s for Een5ers

Instructions 0 eacin6s for Borro$ers



Eoan 0 Cre5it

eacin6s0Instructions for Een5ers' Islam empasis" $en you len5 to your broter an5 if e is

in crisis" you soul5 6i!e im more time to pay your 5ebts.An5 if e is not capable to pay you back neiter any ope inte future ten you are 5eman5e5 to for6i!e im =an5epect re$ar5 from Almi6ty Alla>.

?oly urJan'

An5 if te borro$er =5ebtor> is in ar5 time =as no money>"ten 6rant im time till it is easy for im to repay" but if youremit it by $ay of carity" tat is better for you if you 5i5but kno$.

(%l Baarah, Chp:3: 2: 8GA)



Eoan 0 Cre5it

?a5it'

If someone amon6 you as a ri6t =loan> on oter" an5 epro!i5e im more time" tere is sa5a4a re$ar5 for im

on eac 5ay.(By Imran bin E#ssain rt, M#snad6e6%hmad)

e one $o $ants tat Alla sa!e im from tear5sips of te 5ay of u56ment" e soul5 6i!e more

time to is borro$er or for6i!e is ri6ts =loan>.(M#slim, /itaab6#l6B#y#)



Eoan 0 Cre5it

?a5it'

It is narrate5 by Abi aseer rt tat I ear5 Propet pbusayin6" $osoe!er 6i!e Xeibility (more time) to aperson in crisis (abo#t his loan) or for6i!e is 5ebts"Alla $ill pro!i5e im ?is o$n sa5e on te 5ay of u56ment. (M#slim, /itab6#l6B#y#)



Eoan 0 Cre5it

It is also state5 in many Aa5it tat Propet pbu5eman5e5 te len5er to talk to te borro$ers an5 oters$ile 5ealin6 for loan in a !ery soft an5 polite manner. :26'

May Alla so$ is mercy on tat person" e $ene!er

sells" buys or 5eman5s for is loan" 5eals in a polite an5

kin50nice manners. (B#khari, /itaab6#l6B#y#)

5i



Eoan 0 Cre5it

Instructions 0 eacin6s for Borro$ers' Islam also forces borro$er to pay is loan05ebts full an5 on

time unless tere is any 6enuine ecuse. 7ter$ise e $illbe responsible in te si6t of Alla.

Borro$in6 an5 Een5in6 is actually an a6reement bet$een

te parties an5 te con5itions must be ful<lle5 by botsi5es. If te Een5er 5eman5s for is loan aea5 of time orborro$ers 5oesnJt pay on time" ten accor5in6 to te ?olyurJan" tey are breakin6 te comman5ment of Almi6tyAlla.

?oly urJan'

Certainly about te A6reement" it $ill be 4uestione5.

E 0 C 5i



Eoan 0 Cre5it

If te borro$er 5oes not pay is 5ebts $itout any reason 0ecuse" It is consi5ere5 an 7ense =Hulm> by Propet pbu.

Propet pbu 5i5 not use to lea5 te funeral prayer of aperson" $o intentionally i6nore to pay is 5ebts.

?a5it'

Ke lefto!er 5ebt of a ric is HulmL.

(%greed pon)

E 0 C 5it



Eoan 0 Cre5it

?a5it'

It is narrate5 by 9alma bin Ak$aJa rt" once $e $ere sittin6 $itPropet pbu. A funeral $ere brou6t. ?e $as aske5 to lea5 teprayer. Propet pbu aske5" is tere any 5ebt 5ue on im. It $as sai5";o. ten e lea5 te prayer. en anoter funeral $as brou6t. ?easke5" is tere any 5ebt 5ue on im. It $as replie5. es. ?e aske5"5oes e lea!e anytin6. It $as replie5" yes" tree Dinaars. en te5ebt is pai5 trou6 tese Dinaars an5 e le5 te prayer. en a tir5

funeral is brou6t. ?e aske5" is tere any 5ebt 5ue on im. It $asreplie5" es. ?e aske5. Di5 e lea!e anytin6. 9aaba rt sai5" ;o. ?eten sai5" Eea5 an5 oer te prayer of your broter. Abu ata5a rtsai5"K7J Propet of Alla" lea5 te prayer" I $ill pay is 5ebtsL.

(B#khari)

E & C 5it



Eoan & Cre5it

After concorin6 Makka" Propet pbu use to pay te 5ebtsof poor by imself an5 ten use to lea5 te funeral prayers.In tis re6ar5" e a5 announce5'

en Alla opene5 te 5oors of !ictories for im" eannounce5' I am 5earer to Muslims more tan teir souls.

osoe!er 5ies amon6 tem" an5 lea!e te 5ebts bein5.I am responsible0liable for it. An5 tose $o lea!es bein5any $ealt" it belon6s to is ineritors. (B#khari)

7n anoter accasion" e sai5" $osoe!er 5ies an5 5ebt is5ue on im an5 e lea!es notin6 bein5. I amliable0responsible for is 5ebts05ues. (B#khari)

E & C 5it



Eoan & Cre5it

ese Aa5it pro!es tat if te 5ebtor 5ies $itout payin6is 5ues an5 e lea!e notin6 bein5 ten it becomes te5uty of te Muslim 9tate to pay is 5ues. It $ill satisfy tesoul of tat poor Muslim as $ell as te len5er $ill 6et isri6t.

Conclusion'

is Islamic Financial 9ystem" pro!i5es'

Bene<ts to Poor

9er!ice & Fleibility to 8ic Eoanin6 Facility to e!ery In5i!i5ual Financial 9ecurity to te Een5ers 9ecurity Guarantee by 9tate 9moot runnin6 of te Financial & :conomic 9ystem

E 0 C 5it



Eoan 0 Cre5it

Propet pbu calle5 te 5ebt of a person an unfor6i!ablecrime as it is mentione5 in many Aa5it. ?e e!en sai5 aboutte martyrs" tat tey $ill be 4uestione5 too.

KAll sins of a Martyr $ill be for6i!en but 5ebtL.

(M#slim, /itaab6#l6B#y#)

It is narrate5 by 9aree5 rt tat Propet pbu sai5" teecuses of te one" $o is capable of payin6 is 5ues

make is onor an5 punisment permissible.(%b# Da0ood 1 Nasai-I, /itaab6#l6B#y#) Accor5in6 to Ibn MubarakNNNN..Muslim azi 0 u56e is allo$e50permitte5 to sell out te

property of te 5ebtor in te market to 6et is loans pai5.

E 0 C 5it



Eoan 0 Cre5it

Islam empasis borro$er05ebtor to pay not only on timebut pay more tan teir actual 5ues.

It soul5 be on uncon5itional basis neiter $itout anyepectation of bene<t oter$ise it $ill turn into 8iba.

Eoan 0 Cre5it



Eoan 0 Cre5it

?a5it'

It is narrate5 by Abu ?uraira rt" tat one person 5eman5e5Propet pbu for is loan an5 e talke5 arsly $it im. ecompanions of Propet pbu trie5 to teac im some manners.

Propet pbu sai5" lea!e im alone. ?e as te ri6t to talk.Buy a camel for im. Companions rt sai5" 7J Propet of Alla"$e are capable to 6et a better camel in a6e tan tis. ?ereplie5. 7k. Get a better one an5 6i!e it to im. e bestamon6 you is e" $o pays back 6oo5. (M#slim,/itaab6#l6B#y#)

Eoan 0 Cre5it



Eoan 0 Cre5it

?a5it'

It is narrate5 by Abu 8afee rt" tat Propet pbu took ayoun6 camel from a person as a loan. en e recei!e5 fe$

camels of 9a5a4a. Abu 8afee rt says" Propet pbu or5ere5me tat I soul5 6i!e one youn6 camel to tat person. I sai5"I see all tese camels better & $it four teet tan tis one=oun6>. ?e replie5" 7" 6i!e tat one to im. Best amon6uman bein6s is one" $o pays back is 5ues in 6oo50bettersape. (Mishkaat)

Eoan 0 Cre5it



Eoan 0 Cre5it

?a5it'

It is narrate5 by abir rt tat Propet pbu o$e5 me someloan. ?e pai5 it back in full as $ell as some more.

(Mishkaat)

Eoan 0 Cre5it



Eoan 0 Cre5it

?a5it'

It is narrate5 by Ab5ulla Bin 8abeeJa rt tat Propet pbu tookloan from me of forty tousan5. en e recei!e5 te6oo5s0Maal =9a5a4a or Ganeemat>" e returne5 it to me an5sai5 as $ell. May Alla bless your family an5 your $ealt.Certainly te return of te loan is tanks an5 ten return ofloan. (Mishkaat)

is ?a5it so$s tat te least le!el of payin6 your 5ebt istankin6 te len5er for is fa!or $ile returnin6 your loan.

Eoan 0 Cre5it



Eoan 0 Cre5it

8aan =9ecurity>' Islam allo$s te len5er to 5eman5 for a 8aan =security> from

te borro$er before 6i!in6 any loan.

erms & Con5itions' Ma#or con5itions of 8aan are as follo$s'

e Pro<t & Eoss of te Marona =Ple56e5> tin6 is teresponsibility of te o$ner. emporary bene<ts $ill fall in tefa!ors of Murtain =Ple56er> as a fee for is ser!ices to tatple56e5 item. Eon6 term or permanent bene<ts $ill be te ri6tof te o$ner.

:26' Mr. Umer ple56e is co$ to Mr. Ali as a security a6ainst is loanfrom Mr Ali. ;o$ tis co$ $ill be consi5ere5 as an Amanat =rust>. ;o$if te co$" 5ies or stolen. It is te loss of Mr. Umer. if se be6ets ababy222222222222" it also $ill belon6s to Mr. Umer. But Mr. Ali can use temilk of tat co$ as a fee for is ser!ices of keepin6 an5 fee5in6 teco$.

Eoan 0 Cre5it



Eoan 0 Cre5it

?a5it'

It is narrate5 by Abu ?uraira rt tat Propet pbu sai5" on ri5in6animals" it is allo$e5 to ri5e as a fee for spen5in6 on it $en it is

ple56e5 as a security. ust like tat" te milk of a milkin6 animal canbe use as a fee of spen5in6 on it" $en it is kept as a security. e one$o ri5es" $o 5rinks te milk. ey are responsible for teirepenses =foo5" ser!ice etc> =B#khari)

It is narrate5 by 9aee5 bin Musayib ra tat Propet pbu sai5"Ple56e509ecure5 tin6 can not stop itJs o$ner. For im" tere arebene<ts an5 tere are losses as $ell. (Mishkat, by Imam"haH ra> 'his Eadith sho0s, that the taes or i& there is right o& other in this pledged

thing 0ill be paid by the o0ner.

Eoan 0 Cre5it



Eoan 0 Cre5it

akin6 bene<ts from tose ple56e5 animals are allo$e5$eter use5 for ri5in6s or milkin6 (as a &ee o& ser$ices

pro$ided &or them). akin6 bene<ts from oter ple56e5items like ouse" sop" #e$ellery are not allo$e5. If teyare rente5 out =$it te permission of o$ner>" ten tis

rent $ill be 6i!en to te o$ner.

9ame Ea$ applies to te a6ricultural lan5. If te Murtainculti!ates it" e $ill 6et is sare accor5in6 to te sare ofte culti!ator. If e transfer it to someone else forculti!ation on Bataii. en tis Bataii $ill be pai5 to te

o$ner.

Eoan 0 Cre5it



Eoan 0 Cre5it

Bankruptcy' If a person <les te bankruptcy 5ue to is se!er<nancial crisis. 9colars a!e mentione5 fe$ la$s for tatBankrupt. ic are summarize5 belo$'

Bankrupt can be set free from is 5ebts05ues 5ue to <lin6 tebankruptcy. Court $ill reco!er te 5ues for te len5er e!en bysellin6 is property.

?a5it' it is narrate5 by Ab5ur 8eman bin aab bin Malik rt tat Muaaz

rt $as a !ery caritable youn6 person. ?e 5i5 not keep sa!in6s. ?e useto take loans for carities until is $ole $ealt0property $as ple56e5.?e came to Propet pbu an5 re4ueste5 im to talk to te len5ers. If telen5ers $oul5 be able to for6i!e Muaaz rt but tey 5i5 not 5o so. enPropet pub starte5 sellin6 out is stu06oo5s for te len5ers untilMuaaz rt stoo5 up empty an5e5. (Mishkaat)

Eoan 0& Cre5it



Eoan 0& Cre5it If te len5er sees is o$n maal06oo50item $it 5ebtor" e must take

it back. :26'

It is narrate5 by Abu ?uraira rt tat Propet pbu sai5" $osoe!erbecomes bankrupt an5 te len5er sees is real 6oo5 $it im. ?eas te most ri6t to 6et it back. (%greed pon)

If te len5ers are more tan one" ten te court can take te assetsof 5ebtor an5 $ill 5istribute amon6 te len5ers accor5in6 to teirpercenta6e. :26'

It is narrate5 by Abu 9aee5 u5ri rt tat at te time of Propetpbu" one person bou6t fruits an5 ma5e loss in it. ?e became

bankrupt. Propet pbu a55resse5 te people to pay im sa5a4a.People pai5 sa5a4a to im. But it $as not suRcient to pay is5ebts in full. en Propet pbu sai5 to te len5ers" take $at you6et an5 notin6 you $ill 6et more tan tis. (M#slim)

Eoan 0 Cre5it



Eoan 0 Cre5it

If te person 6ets bankrupt" ten all te assets" e keeps inis possession are no lon6er belon6 to im. ?e 5oesnJta!e te ri6t to use tem. Court can 5o inibitation 0 stopim of usin6 tose assets.

?a5it'

aab bin Malik rt narrates from is fater tat Propetpbu as stoppe5 Muaaz bin abal rt of usin6 is

assets06oo5s an5 ten sol5 it out to pay for is 5ues.(%b# Da0ood, Dar /#tni)



Islamic ays of Insurance




y K;7L to con!entional InsuranceO

Is sometin6 $ron6 $it te conceptO 8isk A!ersion

Assurin6 oters 8isk sarin6

' at is $ron6 $it te practiceO

Ans' e contract bet$een te insurer an5 te

insure5 is tecnically $ron6 from te 9ariaperspecti!e because of'

Garar & 8iba

200





Garar'

Eeically it means uncertainty an5 tecnically it means teuncertainty of te counteract or te sub#ect matter or teperio5in a commutati!e contract.

e element of Garar in te commercial insurancecontract e insurer 5oes not kno$ o$ muc e $oul5 o$e to an

in5i!i5ual.

9ome times an insure5 5oes not kno$ eiter o$ muce $oul5 pay ultimately to te insurer

In case of no claim from te insure5 in 6eneralinsurance" ten imar emer6es.

201





8iba in Commercial Insurance'

Direct 8iba

:cess on one si5e in case of ecan6e bet$een teamount of premium an5 te sum insure5

In5irect 8iba

e interest earne5 on interest base5 in!estments

202





e concept of akaful'

Features'

aburro =contributions> from te participants =Policy?ol5ers> to create a fun5 $ic $ill pro!i5e <nancialelp at te occurrence of certain losses

Partnersip amon6 te participants

;ee5 of an operator

e mana6ement contract bet$een te participantsan5 te operator

In!estments in 9aria compliant mo5es

203





Dierent Mo5els'

Pure Mu5araba Mo5el' e participants an5 te operator enter into an Mu5araba contract

from te be6innin6 of te relation" for in5emni<cation an5 sare ofte un5er$ritin6 results

akala Mo5el =ybri5 of $akala & Mu5araba>' An a6ency a6reement is ma5e bet$een an in5i!i5ual $illin6 to

participate in te fun5 an5 te operator $orkin6 as te mana6er ofte fun5. e operator earns an upfront 5e5uctible fee an5 sareste pro<t of in!estments" it 5oes not sare te results ofun5er$ritin6.

akala base5 on a4f' e sare ol5ers create a $a4f fun5 to eten5 te elp to tose $o

$ant to co!er a6ainst <nancial loss. e participants contribute tote fun5 an5 te operator mana6es te fun5. All un5er $ritin6results belon6 to te fun5 $ic itself as a le6al entity.

204

Pricin6



Pricin6 Price settin6 =asJeer> is proibite5 accor5in6 to all Imams0scolars. Accor5in6 to ?anabala" famous scolars like 9amsu55in abul <raa# Ab5ul

8eman bin Abu Bakr $rites' e ruler as no ri6t to 5eci5e te prices for te pro5ucts of

basic nee5s. Eea!e It on te public" o$e!er tey are $illin6 tosell it.

Imam "haH rt has the same opinion.

Accor5in6 to te scolars of Anaaf" teir opinion is mentione5 byMar6enai rt in is book KAl ?i5ayaL $it tose $or5in6'

It is not appropriate for te ruler to boun5 te public on controlle5 pricesbecause Propet pbu sai5" K5o not 5eci5e prices because Alla 5eci5es it"?e creates ease an5 5iRculties an5 ?e sustains. An5 also tat" informationof price is te ri6t of te seller terefore" only e can 5eci5e it an5 state

soul5 not interfere in teir ri6ts. But if for te purpose of public bene<t"it is re4uire5" ten is acceptable. If te mercants start car6in6 i6erprice of basic nee5s items an5 te #u56e can not 5efen5 te bene<ts ofpublic but by <in6 te state controlle5 prices of tose items ten $it teopinions of oter skille5 an5 eperts" it is allo$e5. (%l Eidaya,Baab %l /arahiya)

MasaJil of Pro<t



Masa il of Pro<t

Gaban2e2Fais'

It means in!ali5 pro<t. Islam 5oes not restrict te limitof pro<t but 5oes not accept te Gaban2e2Fais eiter.

;ormally te seller takes te a5!anta6e of buyerbecause of is nee5 for te MabeeJa. Islam asforbi55en of takin6 tis kin5 a5!anta6e of te nee5 ofte buyer.

MasaJil of Pro<t



Masa il of Pro<t

' Can a limit be assi6ne5 for a Gaban2e2FaisO' at is te or5er about te Bai of a Gaban2e2Fais.

Ans' 9colars a!e 5ierent opinion in assi6nin6 te limitfor Gaban2e2Fais.

Accor5in6 to te scolars of Anaaf" Gaban2e2Fais issuc price $ic is beyon5 or abo!e te epecte5 marketprice of te public.

:26' If a pro5uct is purcase5 on 8s 1((. an5 te similarpro5uct trou6 kno$n in5i!i5uals" oere5 to te buyer of aless price tan 8s. 1(( like ( or /( or ,( etc. ;obo5y ma5e a6uess of 8s 1((. en tis alrea5y car6e5 price 8s. 1(( for tesame pro5uct $ill be consi5ere5 Gaban2e2Fais. is 5eal canbe cancelle5 an5 te pro5uct can be returne5.

MasaJil of Pro<t



Masa il of Pro<t

9aJ< scool of tou6t as te same opinion.

Accor5in6 to Maliki scool of tou6t" Gaban2e2Fais$ill be consi5ere5 $en te pro5uct is sol5 on at least10+r5 less or i6 price tan te total of market price. =it

means 5iscounte5 price or pro<t mar6in soul5 notecee5 tan te 10+r5 of te total price of te market>.

Maliki scool of tou6t put t$o con5itions as $ell'

;o consumption soul5 be ma5e in te MabeeJa

Deal =9ale 0 Purcase must be less tan one year ol5

(/itab6#l6;ih aala Maahib #l %rbaa, $ol 8, /itab6#l6B#y#)

MasaJil of Pro<t



asa o o

9ummary of Gaban2e2Fais'

Pro<t must be limite5 $itin te normal buyin6 an5aor5able capacity of public.

Accor5in6 to Maliki scolars" it soul5 not be i6ertan te 10+r5 of te total market price of te pro5uct.

Go!t. can impose restrictions on seller for car6in6i6er pro<t an5 can set a punisment rules for tem .




International ra5e'

Concept Free ra5e

=;o restriction by 9tate 0 Go!t.>

9afe0Protecte5 ra5e

=More focus on Eocal pro5ucts to protect economy &

Domestic ra5e>




Islamic ra5e 9ystem'

Islam is in fa!or of Free ra5e because'

e $ole $orl5 belon6s to Almi6ty Alla e $ole $orl5 belon6s to Muslim All Muslims are e4ual & one e economy belon6s to Almi6ty Alla e :conomy is controlle5 by Almi6ty Alla ere is no country & Boun5ary in te $orl5 Pro!ision $ill be pro!i5e5 by Almi6ty Alla

=Indi$id#alsnations) All Muslims are te broters of eac oter Islam or5ers to support" cooperate & ser!e eac oter

$eter Muslims or ;on Muslims




Unite50Uniform ra5e by Muslims'

Muslims are one;o Geo6rapical boun5aries Concept of Free ra5e bet$een Muslims

9upport :ac oter like one family

?oly urJan'

An5 !erily tis your reli6ion =of Islamic Monoteism> isone reli6ion" an5 I am your Eor5" so fear =keep your 5utyto> Me. ("#rat #l Mominoon, Chp: 4G, 2: <8)




e belie!ers are notin6 else tan broters (in Islam). 9o make reconciliation bet$een your broters" an5 fearAlla" tat you may recei!e mercy. ("#rat #lE#@#raat, Chp: 9>, 2: 4A)




?a5it'

Muslim is te broter of oter Muslim" ?e 5oes not oen5 imnor lea!e im alone to oensers an5 te one" $o ful<ll tenee5 of oter broter" Almi6ty Alla $ill ful<ll is nee5s onte 5ay of u56ment. (%greed pon)

A belie!er for one anoter is like te bricks of $all" in $icone part support te oter. (%greed pon)




?a5it'

ou $ill see belie!ers amon6 temsel!es merciful" lo!in6

an5 carin6 #ust like one bo5y. en one part urts" te$ole bo5y suers in pain an5 a$akenin6 is alike.

= %greed pon)




All Muslims are like one bo5y an5 e!erytin6 belon6s toAlla" tatJs $y Islam $ants Muslims to support eacoter in ra5e. All te Pro5ucts" sources & factors of

Pro5uction must mo!e freely in te $orl5. 9o teeconomical nee5s of all can be ful<lle5 easily.

Muslim must support oters trou6 teir economicalstron6 resources. Eike 7il" Eabor" ecnolo6y" Militarye4uipments etc.




ra5e $it ;on Muslims'

Islam Allo$s free ra5e e!en $it ;on Muslims Islamic Ea$s are re!eale5 e!en for te bene<t of ;on Muslims.All uman bein6s are e4ual in teir economical nee5sAll Muslims are or5ere5 to support oters e!en non Muslims at

te time of teir nee5.

?oly urJan'

("#rat #n Nisa, Chp: 9, 2: 4)




?oly urJan'

Do not oen5 any one neiter you $ill be oen5e5.

In te li6t of tis !erse of ?oly urJan" 9aib2e2?i5ayamentione5'

If tey 5o not car6e =aes05uties> anytin6" ou $ill notcar6e =taes05uties> eiter.

(Eidaya, /itab6#65akaat)




Co5e of :tics of Islamic ra5e' Islamic countries $ill be boun5 to 5o tra5e on te basis of

follo$in6 co5es.;o ?aram pro5ucts can be importe5 from ;on Muslim

countries =$ine" alcool" immoral literature" i5ols etc>. Propetpeace be upon im forba5e te business of ?aram pro5ucts.

Certainly" Alla s$t an5 ?is Apostle as forbi55en te tra5e of$ine" 5ea5 animals" pi6 an5 i5ols =statues>.

(%greed #pon, kitab6#l6B#y#) e pro5ucts $ic eects & $eakens te Muslim 9tateJs

economy or becomes te source of problem0#eopar5y forMuslims in te future are not allo$e5 to eport. =$eapons"military e4uipmentsJ ra$ material an5 oter tecnolo6y>

All tra5e a6reements (0hich are not ob@ectionable) $ill mustbe ful<lle5 & complete5 by Muslim 9tate 0 Go!t.



Hakat



urJanic 8eferences'@erse'

7 Belie!ersY 9pen5 from tose pure NN..("#rat #l Baara, Chp: 8, 2: 87

Imam abri rt mentione5 $it te reference of ImamMu#ai5 rt tat In tis Ayat" Clean an5 pure Maal $ic you

earn trou6 ar5$orkin6 means te earnin6s trou6business. ?asan Basri rt" Imam 8azi rt a!e te same

opinion in tis re6ar5.

('a&seer 'abri, "#rat #l Baara, 2: 87)

Hakat



?a5it'

9amra bin un5ab rt narrates" tat Propet peace be uponim use to or5er us tat $e must take te zakat out from ourcommercial 6oo5s. (Dar #l =#tni, 2:8, P: 37)

It is narrate5 by Abu Har Gaari rt. I ear5 Propet peace beupon im sayin6" tere is zakat in camels" tere is zakat in6oats an5 seeps an5 tere is zakat in clotes.

;ote' ?ere clotes means tose peaces of clotes" $ic arepurcase5 for te business purpose. It clearly so$s tattere is zakat 5ue on commercial 6oo5s.

(Ibn Eaam, 2: <, P: 3963<)

Hakat



Abu Amr bin ?amas rt narrates trou6 is fater rt tatonce Umer rt passe5 by me an5 sai5" 7 ?amas rt" pay zakatof your maal. I sai5" I a!e notin6 but co!ers of arro$s an5skins. ?e replie5" Do itJs appraisal an5 ten pay te zakat.

(Ibn Eaam, 2: <, P: 83<)

Note: Eamas rt #sed to do the trade o& the co$ers o& arro0s andskins

Hakat



Abu Ubai5 rt 4uotes trou6 Ab5ulla Bin Umer rt tat esai5" tere is no zakat on 6oo5s ecept $ic is purcase5for commercial purposes.

(%b# baid =asim bin "alam rt, /itab #l %m0aal,

Cairo, P:98>)

Hakat



Important MasaiJl of Hakat' Hakat is 5ue on commercial 6oo5s only. If te 6oo5s are purcase5 for personal use an5 ten planne5

to sell tem out. It $ill be counte5 as commercial 6oo5s tenbut te calculation time $ill start from te 5ay" it $ill bepractice5.

;o zakat is 5ue on macinery" buil5in6" ouses" e4uipments"furniture etc

Hakat $ill be 5ue on te rent recei!e5 after a $ole lunarcalen5ar is passe5.

Hakat $ill not be 5ue on te macinery of factories or millsbut on te manufacture5 6oo5s as $ell as on ra$ material.

Hakat $ill be 5ue on sares after te $ole lunar calen5ar ispasse5.

If some one as cas" 6ol5" sil!er an5 commercial 6oo5s allto6eter. ?e $ill make te appraisal of all of tem an5 $illpay te zakat at te en5 of te year. is is te opinion ofImam Abu ?anifa rt" Imam 9a< rt" Imam Ame5 bin ?anbalrt an5 Imam AuzaiJI rt.

Business :tics In Islam



De<nition of Business In Islam'


Aa5it of Propet Peace be Upon ?im

228

9ources



Ma#or 9ources'

?oly urJan

?a5it

I#ma

Fi4

229

:!i5ences



Permission of Business In Islam'

rou6 ?oly urJan

rou6 Aa5it of Propet pbu

Companions of ?oly Propet

Four Calip of Muslims

Asara Mubasarra

Mua#reen of Makka

230

?alal & ?aram



:atin6 ?alal'

@erses of ?oly urJan'

231

?alal & ?aram



Aa5it of Propet pbu'

:amples'

Habia an5 ;on Habia

Muslim An5 ;on Muslim

232

Duties of Muslims



Duties of Muslims in Business orl5 @erses of ?oly urJan

Aa5it of Propet pbu

e26'

7ilGol5

Man Po$er

Ean5

233

Forbi55en :arnin6s



De<nition of ?aram :arnin6


234

Forbi55en :arnin6s



Aa5it of ?oly Propet pbu'

235

Forbi55en :arnin6s



Details of Forbi55en :arnin6s'

9tealin6 8obbery

9$earin6 7ense

Eies Ceatin6

Un#ustly ?aram Business

Deal itout Permission & Autority

236

Attributes of Business & Businessmen




237

Attributes of Business & Businessmen



Aa5it of ?oly Propet pbu

238

Ma#or Principles of Business in Islam



:!erytin6 belon6s to Almi6ty Alla

rust in Alla

Un5erstan5in6 of Business Issues A!oi5in6 Israaf

ell bea!e5

rust orty

?ar5 orkin6 & 9incerity

;o 6ree5iness

239

Ma#or Principles of Business in Islam



eep Purity

Carity & Hakaat

Clarifyin6 5efecti!e pro5ucts

Ful<llin6 Promises & A6reements

Acceptin6 returne5 6oo5s

240

Forbi55en Action in Business'



;o loss of Islamic Practices

;o 9$earin6

;o Ceatin6

;o Fake Praises

;o Buyin6 0 sellin6 of stolen 6oo5s

;o Buyin6 0 sellin6 of ?aram 6oo5s

;o miin6 =for ceatin6>" =B into A 4uality>

241

Forbi55en Action in Business



;o storin6 for i6er pro<t

;o sellin6 of 6oo5s $itout a!in6 possession =ecept Bai

9alam>

;o sellin6 of 6oo5s $itout o$nerJs permission

242

Forbi55en Business



ine

Pi6

Dea5 Animals & Bir5s

Interest Base5 Business

Eottery

9tolen Pro5ucts

Business in Mas#i5

243

Forbi55en Business



Deal Upon Deal

I5ols0Pictures of Ei!in6 Bein6s

Una!ailable Pro5ucts

9ellin6 Pro5ucts $itout permission

244

9ummary



Business :tics in Islam

@erse of ?oly urJan

("#rah %l =isas, $erse)

245

9ummary

F M # f A5 i



Four Ma#or peaces of A5!ice'

Acie!in6 9uccess in te $orl5 ereafter

ake your sare from tis $orl5

Do :saan =Fa!ors>

;o 7ense =Fasa5>

246

Islamic Bankin6 Course



e :n5

ank ou

247

uizz V 1



' rite te names of te Businessransactions 5urin6 te time of ailiya.

248

i V 1



uiz V 1'

De<ne te 5ierent types ofMusarika O

249

i V *



uiz V *'

' De<ne te 5ierent Islamic solutionsin te Process of Pre 9ipment an5 Post9ipment in :port Financin6.

islamic capital market ppt

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