...PROHIBITION OF RIBA FROM THE PERSPECTIVE OF FOUR MAIN SCHOOLS OF THOUGHT Introduction In the comprehensive and restrictive meaning, riba is defined as “any increment incurred upon specific ribawi (usurious) items originated either from debt or trading transactions”. Apart from its literal meaning of “increase”, classical Islamic scholars such as Ibn Arabi, Mujahid and Tabari interpreted riba as an ‘increase without wealth (mal) attached to it’, or as ‘compensation for waiting’ or ‘increase of amount owing to the lenders due to the deferment of payment resulted from extension of original loan tenure’. Such interpretation encompasses riba from debt transaction (i.e. riba ad-duyun) as well as riba from trading of the six ribawi items (i.e. riba al buyu’). The prohibition of riba appears in Al-Quran in four different revelations. The first of these is in Surah Ar-Rum ayyat 39 which emphasized on moral denunciation for those who gives riba and commendation for those who contribute tithe (zakat). The second revelation is in Surah An-Nisa ayyat 161 concerning riba and the Jews. It severely condemned the Jews who took riba despite they were forbidden to do so. The third revelation in Surah Ali Imran ayyat 130 enjoined the Muslims to keep away themselves from riba and the fourth revelation in Surah Al-Baqarah ayyat 275-278 delineate the strong verdict against riba especially the two excerpts from ayyat 275 which stated that “Those who devour riba will not stand except as one...
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...EDITION 2002 PRINTED AT ILMI GRAPHICS PUBLISHER DARUL - ISHAAT URDU BAZAR KARACHI-1 PAKISTAN. E-mail : ishaat@digicom.net.pk Ph: 021-2631861 AVAILABLE AT IDARATUL MA’ARIF, DARUL ULOOM, KORANGI, KARACHI DISTRIBUTOR IN U.K. AZHAR ACADEMY LTD., at continenta (London) Ltd.. Cooks Road, London E-15 2pw This copy cannot be sold in the U.K., unless sold by or authorised by the 3 Meezan Bank’s Guide to Islamic Banking TABLE OF CONTENTS Preface 7 SECTION I INTRODUCTION TO ISLAMIC ECONOMIC SYSTEM 1 2 3 Chapter 1: Chapter 2: Chapter 3: The Islamic Economic System Factors of production in Islam The objectives of the distribution of wealth in Islam 11 19 29 SECTION II RIBA, ITS PROHIBITION & CLASSIFICATIONS 4 5 6 7 8 Chapter 4: Chapter 5: Chapter 6: Chapter 7: Chapter 8: Riba in the Qur'an Riba in Hadith Riba and its types Commercial interest and usury Simple and compound interest 34 36 42 53 62 SECTION III ISLAMIC CONTRACT 9 10 11 12 Chapter 9: Chapter 10: Chapter 11: Chapter 12: Islamic contract Sale Valid Sale Five khiyars 66 68 70 77 SECTION IV ISLAMIC MODES OF FINANCING 13 Chapter 13: Musharakah 14 Chapter 14: Mudarabah 4 81 98 Meezan Bank’s Guide to Islamic Banking 15 16 17 18 19 20 21 Chapter 15: Chapter 16: Chapter 17: Chapter 18: Chapter 19: Chapter 20: Chapter 21: Diminishing Musharakah Murabaha Salam Istisna’ Istijrar...
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... 1.0 PENGENALAN 1 1.1 Pengertian dan Konsep Riba 2 1.2 Jenis- Jenis Riba 4 1.2.1 Riba albuyu’ 4 1.2.2 Riba alduyun 5 1.3 Pengharaman Riba 6 1.3.1 Larangan Riba di dalam Al-Quran 6 1.3.2 Larangan Riba di dalam Hadis 12 2.0 APLIKASI RIBA MASA KINI 14 3.0 KESAN RIBA KEPADA MASYARAKAT 16 4.0 KESIMPULAN 20 RUJUKAN 21 1. PENGENALAN Tugasan ini merupakan kerja kursus individu bagi kursus BPMS 2013 Fiqh Muamalat di mana setiap pelajar dikehendaki memilih salah satu tajuk tugasan yang telah disenaraikan oleh pensyarah. Bagi tugasan individu ini, tajuk yang dipilih adalah berkaitan isu riba iaitu kesan riba kepada masyrakat. Seperti yang kita sedia maklum, apabila memperkatakan tentang perniagaan secara Islam, salah satu isu yang perlu kita perhatikan ialah riba. Walaupun Allah mengharamkan riba sebagaimana arak atau judi diharamkan, ia masih kurang diberi perhatian oleh kebanyakan orang Islam dan tetap menjadi amalan dalam kalangan masyarakat masa kini. Suatu yang mendukacitakan apabila didapati majoriti umat Islam di Malaysia tidak memahami sebaiknya tatacara dan undang-undang Islam dalam hal ehwal kewangan, padahal majoriti individu tidak akan terlepas dari berurusan dengan urusan kewangan seperti kerjaya, perniagaan sampingan,membeli belah, berhutang dan sebagainya . Masih terdapat di antara mereka yang menganggap riba sebagai isu yang remeh dan tidak perlu diberi perhatian...
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...IQRA UNIVERSITY KARACHI CAMPUS Subject: Essentials of Islamic Finance Instructor Yousuf Ibnul Hasan Time Allowed: 60 Minutes Maximum Marks: 40. ------------------------------------------------- Department of Business Administration Quiz No: 2 fall 2013 Name of student:______________________________ ID No: _________ Class Day __________Timing _______________ ____Marks _________ No cutting, rubbing or scratching, no questions A | Name the financial products for the given transactions | | 1 | Venture financing is made under the financing product know as | Musharka | 2 | Capital not be in commodity or in metal currency for financing products known as | Modaraba | 3 | Inflation and holding the scarcity and price hike through financing mode known as | Morabaha | 4 | Financing is not given but assets are given on rents in financing mode known as | Ijarah | 5 | Rs.5 million finance for Capital Assets | Ijarah | 6 | Early you pay less you pay, delay you pay more you pay | Ijarah | 7 | Four partners are not eligible for management fee amount merge with Net Profit | Musharka | 8 | Selling Expense is the part of the cost of the product | Morabaha | 9 | SME concept is drive from the Financing Mode known as | Modaraba | 10 | Capital is structured by contribution sale of equity participation certification known as | Sukuk | 11 | Net Worth divided into equal amount of unit which are sale by owner to avail financing | Musharka...
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...FATWA ON BANKING AND THE USE OF INTEREST RECEIVED ON BANK DEPOSITS BY UMAR IBRAHIM VADILLO October 2006 FATWA Fatwa on Banking | The Use of Interest Received on Bank Deposits Table of Contents 1. Introduction ........................................................................3 2. The Issue .............................................................................7 3. Understanding Riba ...........................................................10 3.1 A world shaped by Riba.................................................... 10 3.2 What is Riba? ................................................................. 11 4. The Misunderstanding of Riba............................................20 4.1. Religious reformism and capitalism ................................... 20 4.2 The Islamic Reformers ..................................................... 23 4.3 The followers of Reda ...................................................... 27 4.4 The misunderstanding of Riba an-nasiah today.................... 28 4.5 Equating Riba to interest in a loan ..................................... 33 4.6 Islamic Banking .............................................................. 34 4.6.1 Islamic Banks are banks ............................................. 34 4.6.2 Murabaha: what it is and what it is not ......................... 38 4.6.3 How the Islamic Bank’s version of the contract of Murabaha came into being ..............................................................
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...Devices that Assist People with Disabilities Sheewane Davis Mercer University In the 2008 Census, over 10 million Americans reported a daily activity limitation and their activities of daily living (ADLs) usually required assistance from tools or caregivers. Moreover, about 0.3 million Americans have experienced a serious spinal cord injury (SCI), for whom essential tasks, such as dressing, preparing food, or taking medications, usually require the assistance from personal caregivers. However, the shortage and high cost of experienced caregivers fail rapidly growing needs for personal assistance. Technology which aids in these tasks is in great demand and it must allow the user to independently and safely control both mobility and manipulation in their home or the community. Robotics technology has been widely applied in rehabilitation technology and assistive devices to enhance the performance of assistance and quality of life of people with disabilities. By attaching a robotic manipulator to a mobile base, such as a wheelchair or a mobile robot, several robotic assistive devices have been developed to provide both mobility and manipulation assistance to people with severe physical impairments. However, most existing devices only provide a single-arm manipulation, which greatly reduce their efficiency of assistance and restricts their ability to perform complex manipulation tasks which require the involvements of both arms, for example, open the refrigerator with one arm...
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...Islamic Modes of Finance Theory and Key Shariah Principles Modes Of Finance • Two are ideal modes which provide an alternative to interest banking and if implemented on a national level will result in much fairer distribution of wealth in society 1. Mushaarakah – رآ (equity finance) 2. Mudhaarabah - ر (equity finance - sleeping partner) • Two are not ideal as they replicate the effects of conventional banking but nevertheless are tolerated in Shariah 3. Ijaarah - ( إ رةleasing) 4. Muraabahah - ( اcost plus pricing) We will also briefly analyse Salam - , Istisnaa‘ – ع Tawarruq – رق اand 1 Mushaarakah • “Mushaarakah” literally means sharing • “Mushaarakah” is derived from “shirkah” which means “being a partner”. • Mushaarakah is “a joint enterprises formed for conducting business in which all partners share the profit according to an agreed ratio while the loss is shared according to the ratio of investment” • It is an ideal alternative for interest based financing with far reaching effects on the economy. Types of Shirkah SHIRKAH SHIRKAT-UL-MILK joint ownership SHIRKAT-UL-‘AQD joint enterprise OPTIONAL via joint purchase NON OPTIONAL inheritance SHIRKATUL-AMWAAL SHIRKATUL-‘AMAL SHIRKATUL-WUJOOH mushaarakah Mushaarakah • The term Mushaarakah has been introduced recently by those who have written on the subject of Islamic modes of financing • It is normally restricted to a particular type of “Shirkah”, i.e. Shirkat-ul-amwaal...
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...FATWA ON BANKING AND THE USE OF INTEREST RECEIVED ON BANK DEPOSITS BY UMAR IBRAHIM VADILLO October 2006 FATWA Fatwa on Banking | The Use of Interest Received on Bank Deposits Table of Contents 1. Introduction ........................................................................3 2. The Issue .............................................................................7 3. Understanding Riba ...........................................................10 3.1 A world shaped by Riba.................................................... 10 3.2 What is Riba? ................................................................. 11 4. The Misunderstanding of Riba............................................20 4.1. Religious reformism and capitalism ................................... 20 4.2 The Islamic Reformers ..................................................... 23 4.3 The followers of Reda ...................................................... 27 4.4 The misunderstanding of Riba an-nasiah today.................... 28 4.5 Equating Riba to interest in a loan ..................................... 33 4.6 Islamic Banking .............................................................. 34 4.6.1 Islamic Banks are banks ............................................. 34 4.6.2 Murabaha: what it is and what it is not ......................... 38 4.6.3 How the Islamic Bank’s version of the contract of Murabaha came into being ..............................................................
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...Followers of Different religions in this city are: Muslim 81.16%, Hindu 17.80%, Christian 0.06%, Buddhist 0.02% and others 0.96%[6]. Remittance is the key element of the economic growth of Sylhet the money is sent by the people living abroad from the city. The commercial banks have deposits of 4,000 crore taka in Sylhet [7] .They distribute this deposits among the people seeking loans. In Sylhet city there have many Islamic banks and conventional banks running their activities. Literature Review: Islamic banking refers to a system of banking or banking activity that is consistent with Islamic law (sharia’h) principles and guided by Islamic economics. In Islam usury is prohibited, collection and payment of interest known as riba is also prohibited. It also prohibits trading...
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...Professor Hunt-Ahmed Done by: Manar Al-Qari Starting an RF Bank in the United States This one of the best articles I’ve ever read. It is quoted from The Art of Islamic Banking and Finance Book and shows us the hard and lengthy efforts that the author went into to start a Riba-Free bank in the United States which is a banking sector targeting people from all faith and not only Muslims. The author focus was not just to convey the Shariah’s letter but also to satisfy anyone who believes in Judeo-Christian-Islamic values. I agree with the author that Riba Free Banking system is fair since it is an ethical system that complies with Shariah as mentioned in Quraan and Sunna. From my reading of the article I can consider the author as the Father of Riba Free Banking in the United States. There are a lot of benefits for starting Riba Free Banking system in America such as providing people (Muslims and non-Muslims) with larger choices and enable products’ diversifications. It will also increase the competition between Riba Free Banking system and the traditional conventional system and this competition is of course in favor of the customers. The author mentioned a case study of the main differences between a Riba-Free Islamic Banking and the conventional one. I think the Islamic choice is of more value since it is based in Return on Capital which is in compliance with Shariah standards. The starting point was in 1987 when the LARIBA bank (Shariah Compliant) was established as a depositary...
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...The German University in Cairo Faculty of Management Technology Research Methodology “The Comparison between Islamic loans and Conventional loans in relation to Market Power” Submitted By Ahmed el-Farnawany 16-2641 Tutorial Number: T13 Professor: Raghda El-Ebrashi Teaching Assistant: Hadeer Shawky January, 6th, 2011 Table of contents 1. Introduction 1 2. Literature Review 2 2.1 Conventional loans 2 2.1.1 Interest and loan pricing 2 2.1.2 Types of conventional loans 3 2.1.2.1 General loan types 3 2.1.2.2 Business loans 4 2.1.2.3 Consumer loans 4 2.2 Islamic loans 5 2.2.1 Interest prohibition. 5 2.2.1.1 Riba (Usury) 5 2.2.1.2 Why is riba prohibited 6 2.2.2 Types of loans in Islamic banking 6 2.2.2.1 Qard al-hasan 7 2.2.2.2 Ijara 7 2.2.2.3 Murabaha 8 2.2.2.4 Musharaka 8 2.3 Effect of Islamic loans objective and economic incentives on its market power in relation to conventional loans 9 2.3.1 The effect of Islamic Loan Objective on its Market Power 9 2.3.2 The effect of Islamic Economic Incentives on its Market Power. 10 2.4 Research gap 11 3. Methodology 12 4. References 17 1. Introduction Islamic economics and Islamic banks have grabbed the attention of millions of people around the world. That is because Islamic banks have assets that can be estimated as 300 billion USD around 75 countries in the world with 15 % annual...
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...Islamic banking and finance Submitted to: Sir Abubakar Siddique Submitted by: Atia Farooq Roll no: 4918 MBA 21(A) A sharia,h perspective of minimum account balance Requirement in Islamic banking Summary: This article describe sharia’h point of view weather its allow to Islamic banking to charge fee, cut profit and reduce free services when depositor have amount less the minimum requirement of amount in saving account and in current account. Conventional banks fix the minimum amount of saving account. Banks fix this amount to recover it service expenses. Mean amount of the interest (return on investment) must sufficient to recover its services expense. When depositor amount less the minimum requirement and due to which banks service charges increase as compare to interest then bank charge fee, or stop giving profit on saving account and also reduce providing free services. Some banks also have the same conditions for current banks but mostly not have such restrictions on current account, because banks not give any profit o current account so easily provide those free services. When saving account have amount less then minimum requirement bank convert these account in to current account and pay no profit on it. Bank also reduces the free services to savings account holder so When balance turn into zero then bank close the account of depositor. All banks whether conventional or Islamic suffer loss due to balance less...
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...Anthropological and Accounting Knowledge in Islamic Banking and Finance: Rethinking Critical Accounts Author(s): Bill Maurer Reviewed work(s): Source: The Journal of the Royal Anthropological Institute, Vol. 8, No. 4 (Dec., 2002), pp. 645667 Published by: Royal Anthropological Institute of Great Britain and Ireland Stable URL: http://www.jstor.org/stable/3134937 . Accessed: 27/02/2012 02:27 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. Royal Anthropological Institute of Great Britain and Ireland is collaborating with JSTOR to digitize, preserve and extend access to The Journal of the Royal Anthropological Institute. http://www.jstor.org ANTHROPOLOGICAL AND ACCOUNTING KNOWLEDGE IN ISLAMIC BANKING AND FINANCE: RETHINKING CRITICAL ACCOUNTS BILL MAURER Universityof Californiaat Irvine Accounting for accounting demands renewed attention to the knowledge practices of the accounting profession and anthropological analysis. Using data and theory from Islamic accountancy in Indonesia and the global network...
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...4.1 Investment Process of FSIBL: Generally a bank takes several steps to deliver its proposed investment to the client. The process takes deep analysis because it invests deposit fund not its own fund. If the bank fails to meet the depositors demand, then it must collapse. So each bank specially Islamic bank should take strong concentration on investment proposal. However, First Security Islami Bank Limited (FSIBL) makes its investment decision through successfully passing the following crucial steps: 4.1.1 Induction of new client: * Only potential and genuine clients having Al-Wadiah Current Account with proper introduction and with satisfactory transaction for a reasonable period (generally six month) should be induced as a investment clients. * Past performance of the client with other Bank/ Branches of the Bank to be looked into. * Satisfy about reputation of the client in the business community. General eligibility criteria for selecting a client as follows: * Bangladeshi Nationality, physical capable and age limit from 18 to 60 years. * Proprietorship/ Partnership/ Private Limited Company. * Valid licenses like Trade Licenses, VAT registration, TIN etc. * Source and capacity of repayment backed by positive cash flow. * Definite market and prospect of future expansion. * Adequate infrastructure facility and manpower with required skill and experience. * Clean CIB report. * The client must have clear idea about the business and...
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...The 40 x 50m detached high rise office building of 60-storey high with 3-storey basement of 14m deep is to be built in a construction site of 90 x 100m in urban area. According to the RIBA plan of works, there are several stages including preparation, design, pre-construction, construction and use. The work progress will be shown as follows. Preparation First of all .In the preparation stage, the Appraisal and Design Brief are needed. It needs to gain a full understanding of the both ‘user clients’ and ‘pay client’s’ specific needs, objective and requirements. Moreover, the final statement of requirements inserts into the Design Brief by the client confirming key requirements and constraints, and identify the procurement, procedures, organizational...
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