Riba by Monzer Khaf

Top 20 FREQUENT WORDS

financing 47 contract 31 sale 31 islamic 29 idb 27 partnership 27 riba 24 profit 22 banks 21 funds 20 ownership 19 asset 17 equipment 17 mudharabah 17 price 17 investment 16 shari 16 definition 15 payment 15 agent 13 the 13

DOCUMENT KEY POINTS

• westminsterca u ca monzer kahf dot com email monzer kahf dot com email fax a ca c fax phone a ca c phone
• presentation in presentation any form in any illegal with form isis illegal wit permission of written permission written the author

• shari ah ruling on riba riba is prohibited by the texts of qur an and sunnah
• this is agreed up unanimously among all muslim schol

• its prohibition in islam came in a gradual manne at the beginning allah discouraged its practice i that which ye give for increase thro property of other people will have no increase with then allah condemned jews for practicing it i that they took usury that they were forbidd then its prohibition came along with the justificatio has a bad effect of multiplying many folds in vers o ye who believe devour not usury doubl multiplied
• evidence riba was commonly practiced in arabia and i countries in the era of ignorance jahiliyah

• allah deprives usury of all blessings but increase for deeds of charity and give up what re riba if ye are indeed believers if ye do it not take war from allah and his messenger but if ye turn shall have your principal deal not unjustly and not be dealt with unjustly
• also the pbuh said the wrath of god is on the taker of giver its writer and its two witnesses

• kinds of riba riba al fadl riba of debt riba it is a shari ahit is also called it is a described increase in riba nasi ah or con one of the two nasa
• it is also the creditor from fr defined as exchange of the debtor for borro rebawi a commodity delaying maturity time for another of same of an already for the kind or group with an due debt

• distinction between riba of governments and individuals distinction between riba and fixed ret investment in conventional banks
• arguments by some contemporary writers distinction between riba used to finance pro and riba used to finance consumption

• financing is provision of commodities a services or means of payments without immediate counterpart
• separation between owner and man e p t i o ns x c philanthropy self financi

• human rationale wider and comprehensive as it covers altruistic objectives objectives in the hereafter ex time horizon
• profit making financing an philanthropic financing economic rationale aimin maximization of utility

• earning a profit in shari ah can be by virtue of o property or providing labor the meaning of earning a property by guar ends up to owning a property or providing labor
• does it apply to money why not is it a fa production although it helps in reducing the aggregate cost of production from the poin view of macro analysis in comparison with

• pure financing modes know islamic jurisprudence muzara a provision of land to farm musaqa provision of trees to worker mudharabah provision of mo merchant
• all those modes are form production financing

• return on commercial financing is there any time value of money separated from an exchanged commodity riba
• is there a return on lending and why not lack of ownership of a growable asset

• murabaha sale murabaha for purchase sale for purchase orde ord a c definition it is a kind of sale on confidence to th who made a purchase order in which equals the known cost a known profit
• a c legitimacy permissibility of sale imam shafi a mentioned it

• aa power power of attorney or of attorney or delegation delegation from from th t thepurchase the purchase orderer orderer to to buy buy thethe comcom specified for specified the said for the said price price in the name in the name of o andon and itsbehalf
• the order the order must must define define the the commodity commodity by by i i description its description quantity its its quantity cost profit its cost profit gigi bank whereto bank where tobe boughtfrom bebought from etc

• a second sale contract after receipt of the g between the bank and its customer in whi goods are sold to the customer at cost given the price is deferred and the date or da payment is are determined
• execution of this second sale contract by deliv the commodity from the bank through its ag the purchaser and beginning of the insta payments

• the bank bears responsibility and liability reg commodity for the duration of ownership and to new purchaser including liability for unseen defe the transaction must have an order to purchase to buy and two sale contracts
• it is necessary that there ought to be real goods c from one hand to another

• rescheduling rescheduling of installments for of installments any increm for any increm permissible there permissible will be there will no accumulation be no accumulation o o debts
• the responsibility of the responsibility of the the bank bank makes more k makes itit more k truthfulnessof truthfulness thewhole ofthe wholetransaction

• a c suitability of murabaha to banking operations it begins with money and ends with mone it creates a debt on the customer similar t loan debt in conventional banks
• collateral guarantees and mortgages ca obtained to secure the debt

• mechanism and mechanism and steps steps application applicationfor financingby forfinancing partnershipwit bypartnership wit promiseto promise buythe tobuy thebank s bank sshare sharein ataalate inititat lat partnership contractto partnershipcontract fulfillthe tofulfill purchaseo thepurchase o goods
• purchase contractbetween purchasecontract betweenthe customerand thecustomer and sellerto seller buythe tobuy the goods goodsfor for and andon behalfof onbehalf of partnership

• characteristics a cit maintains the relationship between the customer and the provider of the goods w bringing the banks in the picture
• a c it reduces the procedures of delegating t purchase orderer to work on behalf of the

• it is a sale on description specification of the goo time of sale
• salam sale a c definition sale of deferred delivery goo presently paid price

• the commodity should be such that it usually e the market at the delivery date
• the two exchanged things must not be from am ribawi commodities to avoid riba al fadl

• a c characteristics it is a binding contract provided that necessary conditions are fulfilled permissibility of deferment of both and payment according to resoluti oic fiqh academy in its th sessio seller does not have to be the actual manufacturer
• istisna contract a c definition it is a sale of fully described specified co manufactured goods

• and a second istisna contract between the fina the contractor or manufacturer
• a cfinancing istisna an istisna contract between the financier purchaser

• a c practice of istisna in financing gover infrastructure and other projects experience of al rajhi with the government arabia in financing school constructions
• a c indebtedness in financing istisna money terms in contrast with salam a c sample of istisna contract

• qudsi saying in prophet reports allah s words third of the two partners as lo betrays his companion narra dawood
• mixing funds and labor and in a manner defined in shari

• time sha this can be looked at in shari ah and reformulated as buying the property equal to the proportion of the number of desired days o permissibility of selling a usufruct for another usufruct exchangi weeks in a property for two weeks or more or less in another prop
• sharing the use of a common property owners of common property make by agreement divide usufruct of the proper proportion of their ownership or by a court decision

• b object of pa is not the sam property mufawadah mudhara inan muzara a musaqah work or labor craftsmen or professionals faces financial credit worthiness
• aT definition mixing of funds for the purpose of making kinds object of partnership is the me

• financing partnership it is founded on inan partnership sharing in the capital sharing in board of directors sharing in profit as per agreement and in loss as pe hares
• partnership that ends with full ownership share to own buying out the share of financing partner in one pa partnership with decreasing shares

• partnership continue sale of parts of the share of the bank financing part other partner with an independent contract determination of price for each part at the time of its an advanced promise to sell at a given price is it bin sale of the shares of financing partner in the stock characteristics
• sharing the management and the right of check an

• permissibility for the bank to ho share of the other partner in the pro part of it for securing payment of th of the share of the bank sold to be s the partner
• forsaking any profit that is in exce given percentage of financing capital

• haracteristics a c the right of check and contro owner especially if it is made as in the contract and in cases of ne and ill intention
• a c the right to determine the kin its basic conditions do not go i do not buy live animals

• a c the right to put a ceiling to the profit of financier b agreement

• example a condition of fixed comp to the mudhareb in ddition to a share of the
• full uthority of mudhareb entre regarding daily decision making

• investment deposit with the con of prior notice for withdrawal

• all invested funds are monet of the same nature as deposits
• the element of confidence in banking system at large a c

• funds of entrepreneurs are usually a mix of di kinds not in monetary terms only usually not o same kind as the principal of mudharabah
• mudharabah in f utilization discussion important consider

• usufruct of things long living asset an asset t consumable during the contract period
• financing through ijara a c definition ijara is a sale of a usufruct for price

• characteristics of ijara far reachingflexibility far reaching flexibility dateand date andmodemodeof ofpayment payment before deliveryof beforedelivery o asset during asset duringthe lease or thelease afterititends
• maybe ititmay benot notexisting existing and theijara andthe may ijaramay described to described beconstructed to be constructed asset

• responsibility of a ca c responsibility of lessor lessor delivery andma deliveryand ma ofthe of leasedasset theleased inusable assetin usableconditions conditions thisresponsibility this usuallysubject responsibilityisisusually subjecttotoin in caseof case destructionof ofdestruction leasedasset ofleased asset caseof case essentialmaintenance ofessential maintenance minormaintenance minor maintenancemay maybebecharged chargedto lesseein tolessee in contract by contract mutualconsent
• operationalmaintenance operational maintenanceisisthe responsibilityof theresponsibility of lesseeanyway lessee anyway

• a c is ijara as described in shari ah fina operational what is the real difference between them it to taxation and accounting systems or to legality legally in both ownership is not transferred the lessor to the lessee
• financial lease may include a right to tr ownership at its end this is not acceptable in acc with resolution of the oic fiqh academy

• a c no evaluation of fixed asset is needed n depreciation a c deputation in management management is not in the hands of financier
• characteristics of outp sharing a c distribution of gross output or gros revenues

• are the output sharing bonds or public debt bonds with th assignment of part of the revenues of the bridge op as interest
• a c gross revenues are distributed at an agre percentage between the mudhareb and the bo owners

• development of contemporary i banks a c first islamic bank was established in the form fund in malaysia
• its basic concept mobilizing small savings hajj and investing them while accumulating

• a c islamization of banks in pakistan the first half of the a c islamization of banks in iran mid s

• financing operations j jfinancing from the operations from the pool pool of of investment funds investment funds murabaha agricultural fina musharakah industrial financ mudharabah real estate finan ijara commercial fina etc
• transportation fi services financi etc

• second in funds utilization amurabaha sale bmurabaha sale fo of equipment import financing description application to buy it is like murabaha s equipment in cash equipment with a po through an agent difference in profit who is the applicant itself
• and a promise to de sale of the equipment to the if the purchase agent for deferred on time

• power powerof attorneyto ofattorney tobuy buy receive receiveand exec and execu nameand name onbehalf andon behalfof thebank ofthe bank thebank the paysthe bankpays priceof theprice ofpurchased purchased equipequip commitment commitmentof theapplicant ofthe theagent agent to applicant the tobb equipmentfrom equipment thebank fromthe bank and andof thebank ofthe bankto sell tosell agentby agent meansof bymeans subsequentindependent ofaasubsequent independent guarantee fromaacommercial guaranteefrom commercialbank bankin supp in suppo purchaser
• new newcontract contractfor forbuying buyingthe equipmentwith theequipment with bythe by bankand thebank andanan acceptanceby acceptance theapplicant agent bythe whichtrans applicant agentwhich tran ownership

• invisible defects are the responsibility of the seller transfer of all guarantees offered by the original se equipment which were negotiated and accepted by the applicant
• the sale contract is made in islamic dinar and pay be in anyconvertible currency at the rate of the day of p

• second in funds utilization cleasing ijara description an applicant to buy equipment and lease it to the applicant agent
• lease agreement with the applicant agent

• elements of the contract power powerof attorneyto ofattorney buyand tobuy andreceive receivethe theequipment equipmen the agent ensures the agent ensures the equipment on the equipment behalf of on behalf of t idb
• another commercial bank s another commercial guarantee for bank s guarantee poss for possi confiscationor confiscation deprivation of ordeprivation of ownership

• a new contract for lease between applicant agent a installment rentals are paid by any convertible cu considered in islamic dinar at the rate of the day for each

• idb pays the idb pays price in the price in one one lump lump sumsum oror ii paymentsin payments accordancewith inaccordance with the manufacturingpro themanufacturing pr acceptance acceptance of of the the equipment equipment by the purcha by the purcha shallbe shall finalas befinal as delivery by delivery by idb idb and and itit will will also be considered also be considere bythe by seller idb theseller idb fromfromcontractor
• applicationto application financemanufacturing tofinance manufacturingof ofequipm equip power powerof attorneyto ofattorney theapplicant applicant purchaser tothe purchaser t t an an agreement agreement with the contractor with the contractor on behalf of on behalf of idb and idb and to supervise the to supervise manufacturi the manufacturin equipment and equipment andto receivethem

• a bank guarantee in support of the debt of the purch the sale price by idb is calculated on the basis profit margin and denominated by islamic dinar
• payment it may be on installments is considered dinar at the rate of the day of payment

• the awqaf authority remains the owner of the p the waqf and idb share the ownership of the us accordance with their capital contribution
• it is a partnership between the awqaf that pro land evaluated in monetary term and idb that construction cost usually on several cash payments

• idb throughou partnership takes a high and constant percentage of the remaining net revenue and the waqf takes a small pe the rest thereof

• problems sale of a portion of idb property by a new cont at the market price of the day of sale
• the managing partner s share of profit should not its share in capital

• it is calculated in accordance with fatwa of the oic fiqh aca actual cost of administering the loan and if this is not available a of administrative expenses of idb equals the proportion of loa amount of total operations
• the payment of the loan and its repayment are in convertible c considered at the rate of the day of money transfer

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DOCUMENT WORD ANALYSIS

Main Category

AlHuda Material\riba

KeyWords

islam financ bankand asset fund mfi inflated financi mfis profit contract invest risk return increase price credit usuria waqf costly

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DOCUMENT REFERENCES

Number of Pages

100

Published Date

2004-01-06 08:30:44

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